EXHIBIT 10.50(a)
ADVANCED MICRO DEVICES, INC.
SECRETARY'S CERTIFICATE
The undersigned, Thomas M. McCoy, certifies that he is the Secretary of
Advanced Micro Devices, Inc., a Delaware Corporation ("the Company"), and that,
as such, he is authorized to execute this Certificate on behalf of the Company,
and further certifies that the attached is a fair and accurate translation of
the Syndicated Loan Agreement dated March 11, 1997 among AMD Saxony
Manufacturing GmbH and Dresdner Bank AG and Dresdner Bank Luxembourg SA and
other financial institutions named therein as lenders.
WITNESS the signature of the undersigned this 13th day of May 1997.
/s/ Thomas M. McCoy
------------------------------------
Thomas M. McCoy
Secretary
[SEAL APPEARS HERE]
ENGLISH TRANSLATION OF THE LEGALLY
BINDING GERMAN LOAN AGREEMENT.
TRANSLATION PREPARED FOR CONVENIENCE ONLY.
SYNDICATED LOAN AGREEMENT
11 MARCH 1997
BETWEEN
AMD SAXONY MANUFACTURING GMBH
-AS BORROWER-
AND
DRESDNER BANK AG
(AGENT AND SECURITY AGENT)
AND
THE OTHER BANKS AND FINANCIAL INSTITUTIONS
NAMED HEREIN
-AS LENDERS-
AND
DRESDNER BANK LUXEMBOURG S.A.
- AS PAYING AGENT -
DOSER AMERELLER NOACK/BAKER & MCKENZIE
FRANKFURT
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INDEX
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Page
Preamble 5
(S)1 Definitions and Interpretation 6
(S)2 Facilities 12
(S)3 Purpose 12
(S)4 Utilisation of the Facilities 13
(S)5 Conditions to Drawing 15
(S)6 Interest, Commitment Fee, Payments 21
(S)7 Term and Repayment 24
(S)8 Security 25
(S)9 Illegality 28
(S)10 Market Disruption; Alternative Method of Calculation 28
(S)11 Increased Costs 29
(S)12 Indemnity 30
(S)13 No Deductions or Withholdings 31
(S)14 Continuity Clause 32
(S)15 Representations and Warranties 32
(S)16 Reporting and Information Requirements 35
(S)17 Covenants 37
(S)18 Project Budget; Project Schedule 42
(S)19 Project Accounts 43
(S)20 Consent of the Banks 44
(S)21 Termination of the Facilities by the Banks 44
(S)22 Agency Provisions 48
(S)23 Administration of Security 51
(S)24 Paying Agent 53
(S)25 Costs 54
(S)26 Assignment; Sub-participations 55
(S)27 Miscellaneous 55
(S)28 Governing Law 59
(S)29 Jurisdiction 59
3
SCHEDULES
Schedule 1 Commitments of the Banks
Schedule 2 Drawdown Schedule
Schedule 3 Drawdown Notice
Schedule 4 Interest Rate Notice
Schedule 5 Notice of Prepayment
Schedule 6 Project Budget
Schedule 7 Project Schedule / Project Phases
Schedule 8 Construction Status Report
Schedule 9 [Scheduled Project Phase] Technical Completion Certificate
(Obligors)
Schedule 10 [Scheduled Project Phase] Technical Completion Certificate
(Technical Advisor)
Schedule 11 Financial Completion Certificate (Obligors)
Schedule 12 Financial Completion Certificate (Banks' Auditor)
Schedule 13 Financial Completion Certificate (Technical Advisor)
Schedule 14 Management Plan
Schedule 15 Disclosure Schedule
Schedule 16 Statement of Use and Source of Funds
Schedule 17 Financial Covenants and Excess Cash
Schedule 18 Certificate of Compliance (Financial Covenants)
Schedule 19 Statement to Report of the Technical Advisor
Schedule 20 Governmental Approvals, Permits and Measures
Schedule 21 Confirmations of Project Manager/Banks'Auditor
Schedule 22 Insurance Provisions
Schedule 23 Cash Equivalent Investments
Schedule 24 Guaranty Decision
Schedule 25 AMD/Dresdner Subsidy Agreement
Schedule 26 SAB/Dresdner Subsidy Agreement
Schedule 27 AMD Inc. Guaranty
Schedule 28 Sponsors' Support Agreement
Schedule 29 Sponsors' Loan Agreement
Schedule 30 Sponsors' Subordination Agreement
Schedule 31 Sponsors' Consent and Agreement
Schedule 32 Sponsors' Guaranty
Schedule 33 AMD Holding Wafer Purchase Agreement
Schedule 34 AMD Holding Research, Design and Development Agreement
Schedule 35 AMD Saxonia Wafer Purchase Agreement
Schedule 36 AMD Saxonia Research, Design and Development Agreement
Schedule 37 Management Service Agreement
Schedule 38 License Agreement
Schedule 39 Design/Build Agreement; Contractors' Consent and Agreement
Schedule 40 Material Equipment Supply/Service Contracts; Consent and Agreement
Schedule 41 AMD Inc. Share Pledge Agreement
Schedule 42 AMD Inc. Subordination Agreement
Schedule 43 AMD Saxonia Land Charge
Schedule 44 AMD Saxonia Security Assignment of Current Assets
Schedule 45 AMD Saxonia Security Assignment of Fixed Assets
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Schedule 46 AMD Saxonia Assignment of Insurances
Schedule 47 AMD Saxonia Global Assignment
Schedule 48 AMD Saxonia Charge of Project Accounts
Schedule 49 AMD Saxonia Assignment of Contractual Rights
Schedule 50 AMD Saxonia Assignment (U.S.A.)
Schedule 50a AMD Saxonia Hedging Agreement
Schedule 51 AMD Holding Share Pledge Agreement
Schedule 52 AMD Holding Security Assignment of Current Assets
Schedule 53 AMD Holding Global Assignment
Schedule 54 AMD Holding Charge of Bank Accounts
Schedule 55 AMD Holding Assignment of Contractual Rights
Schedule 56 AMD Holding Assignment (U.S.A.)
Schedule 57 Legal Opinion of Bronson, Bronson & McKinnon LLP (Indenture, Credit
Agreement)
Schedule 58 Legal Opinion of O'Melveny & Myers LLP
Schedule 59 Legal Opinion of Norr Stiefenhofer & Lutz
Schedule 60 Legal Opinion of Doser Amereller Noack/Baker & McKenzie
Schedule 61 Legal Opinion of Feddersen Laule Scherzberg & Ohle Hansen Ewerwahn
Schedule 62 General Terms and Conditions
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SYNDICATED LOAN AGREEMENT
-------------------------
between
1. AMD SAXONY MANUFACTURING GMBH, Dresden, registered in the Commercial
Register of the Dresden County Court HRB 13186,
- hereinafter referred to as "AMD Saxonia" -
- AS BORROWER -
2. DRESDNER BANK AG in Dresden,
- hereinafter also referred to as
"Agent" and "Security Agent", as the case may be -
3. The Banks and financial institutions listed in Schedule 1
- the parties referred to at 2 and 3
hereinafter each referred to as a "Bank" or together as the
"Banks", as the case may be -
- AS LENDERS -.
and
4. DRESDNER BANK LUXEMBOURG S.A.
- hereinafter referred to as "Paying Agent" -
PREAMBLE
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1. AMD Saxonia proposes to construct, own and operate a fabrication facility
in Dresden for the manufacture of microchip silicon wafers (the
"Fabrication Facility") together with an integrated research and
development center (the "Design Center") (which together are referred to as
the "Project"). AMD Saxonia is a wholly owned subsidiary of AMD Saxony
Holding GmbH domiciled in Dresden, registered in the Commercial Register of
the Dresden County Court under HRB 13931 ("AMD Holding") whose sole
shareholder is Advanced Micro Devices, Inc., a Delaware corporation of One
AMD Place, Sunnyvale, California 94088 - 3453 ("AMD Inc.").
2. The projected total investment cost required for implementation of the
Project, estimated by AMD Saxonia, AMD Holding and AMD Inc. (together the
"AMD Companies") at DM 2,430,000,000, is to be partially financed in an
amount of up to DM 1,500,000,000 through the credit facilities made
available to AMD Saxonia on and subject to the terms and conditions of this
syndicated loan agreement (the "Agreement"). In addition, the Banks have
agreed to make available to AMD Saxonia a standby facility in an amount of
up to DM 150,000,000 on and subject to the terms and conditions of this
Agreement to partially finance potential cost overruns over the projected
Capital Expenditure.
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3. AMD Inc. will make available to AMD Saxonia, via AMD Holding, equity in the
form of ordinary share capital in an aggregate amount of DM 217,500,000 and
AMD Inc. and/or AMD Holding will make subordinated loans to or, in the case
of AMD Holding, additional equity contributions in cash to the reserves of
AMD Saxonia in an aggregate amount of DM 290,000,000. The Free State of
Saxony has agreed to provide regional aid for the Project comprising (i) a
dedicated purpose investment grant in an aggregate amount of DM 476,687,000
(which together with investment subsidies in an aggregate amount of DM
23,813,000 totals an aggregate amount of DM 500,500,000), and (ii) a
dedicated purpose interest subsidy in an amount of DM 300,000,000 which in
each case will be paid to AMD Saxonia by Dresdner Bank AG in Dresden, in
its capacity as house bank.
4. The Banks have agreed to make available to AMD Saxonia the facilities
referred to above on and subject to the following terms and conditions.
IT IS AGREED AS FOLLOWS:
(S)1
DEFINITIONS AND INTERPRETATION
1.1 Definitions of terms not defined above are as follows:
AMD/DRESDNER SUBSIDY AGREEMENT (AMD/DRESDNER ZUSCHUSSVERTRAG):
the agreement between AMD Saxonia and Dresdner Bank AG in its capacity as
house bank to AMD Saxonia, in the form set out in Schedule 25.
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AMD HOLDING WAFER PURCHASE AGREEMENT:
the agreement between AMD Holding and AMD Inc., in the form set out in
Schedule 33.
-----------
AMD K6 MICROPROCESSOR:
the Microsoft Windows compatible general purpose microprocessor under
development by AMD Inc. to compete with Intel Corporation's Pentium Pro
microprocessor.
AMD SAXONIA WAFER PURCHASE AGREEMENT:
the agreement between AMD Saxonia and AMD Holding, in the form set out in
Schedule 35.
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AUDITOR (WIRTSCHAFTSPRUFER):
Ernst & Young Wirtschaftsprhfungsgesellschaft mbH or such 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 withheld.
BANKS' AUDITOR (WIRTSCHAFTSPRUFER DER BANKEN):
BDO Deutsche Warentreuhand AG Wirtschaftsprhfungsgesellschaft 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 withheld.
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BANKING DAY (BANKARBEITSTAG):
any day on which banks are generally open for business in London,
Frankfurt am Main and Dresden and, to the extent that the same concerns
the duties of the Paying Agent under this Agreement, Luxembourg.
CAPITAL EXPENDITURE (INVESTITIONSKOSTEN):
acquisition and manufacturing costs in respect of fixed and movable
assets in accordance with (S)266 2 A II of the Commercial Code and
acquisition costs for intangible assets in accordance with (S)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).
COMPLETION (FERTIGSTELLUNG):
the date on which the initial satisfaction of all 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 is confirmed to the Agent by
------------------------------
the submission of properly executed originals of such Certificates.
COST OVERRUN (PLANKOSTENUBERSCHREITUNG):
at any time, the difference at such time between Capital Expenditure
estimated in the initial Project Budget pursuant to Schedule 6 and, if
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more, the actual Capital Expenditure incurred, in each case calculated
on a cumulative basis.
COSTS to Complete (FERTIGSTELLUNGSKOSTEN):
as defined in (S)21.2 (xxii).
DISCLOSURE SCHEDULE:
the list of matters disclosed by AMD Saxonia set out in Schedule 15.
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DRAWDOWN NOTICE (AUSZAHLUNGSVERLANGEN):
a Drawdown Notice in the form of the specimen set out in Schedule 3.
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DRAWDOWN SCHEDULE (AUSZAHLUNGSPLAN):
the drawdown schedule set out in Schedule 2, as the same may be revised
----------
in accordance with the Project Budget.
EQUIPMENT SUPPLY CONTRACT (LIEFERVERTRAG):
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.
EVENT OF DEFAULT (KUNDIGUNGSGRUND):
any event which would entitle a party to an Operative Document, possibly
after the giving or expiry of notice and/or lapse of time, to terminate
the relevant Operative Document.
EXCESS CASH (UBERSCHUSSLIQUIDITAT):
as defined in (S)2 of Schedule 17.
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FACILITIES (KREDITE):
as defined in (S)2.1.
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GUARANTORS (BURGEN):
the Federal Republic of Germany and the Free State of Saxony in their
respective capacities as guarantors pursuant to the 65/35 Guaranty.
GUARANTY DECISION (BURGSCHAFTSENTSCHEIDUNG):
the decision dated 2 July 1996 set out in Schedule 24 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.
65/35 GUARANTY (65/35 BURGSCHAFT):
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 65 % of the Facilities (in aggregate DM 1,072,500,000), together with
the shortfall of interest and costs, vested with a first right of
satisfaction in favour of the Banks over all security granted by the AMD
Companies as security for the Banks' risk of recovery.
INSURANCE ADVISOR (VERSICHERUNGSBERATER):
Fenchurch Insurance Brokers Ltd., London or such other insurance advisor
as may from time to time be appointed by the Agent with the consent of
AMD Saxonia, which consent shall not be unreasonably withheld.
INTEREST PERIOD (ZINSPERIODE):
the interest periods to be designated for individual advances, in each
case in accordance with (S) 6.1 to 6.4.
LENDING OFFICE (KREDITAUSREICHENDE GESCHAFTSSTELLE):
the lending office of each Bank referred to in Schedule 1 to this
----------
Agreement.
LIBOR-RATE (LIBOR-SATZ):
the LIBOR-rate so defined in (S)6.1.1.
MANAGEMENT PLAN:
the management plan in the form set out in Schedule 14.
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MATERIAL SERVICE CONTRACT (WESENTLICHER LEISTUNGSVERTRAG):
each Service Contract
(i) pursuant to which AMD Saxonia incurs obligations in aggregate in
excess of DM 2,500,000 during the term of the contract, or
9
(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.
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MATERIAL EQUIPMENT SUPPLY CONTRACT (WESENTLICHER LIEFERVERTRAG):
is 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.
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OPERATIVE DOCUMENTS (TRANSAKTIONSDOKUMENTE):
each of the following:
(i) the Project Agreements;
(ii) this Agreement, the Sponsors' Support Agreement, the Sponsors' Loan
Agreement in the form set out in Schedule 29, the Security
-----------
Documents, the Sponsors' Consent and Agreement in the form set out
in Schedule 31, the AMD Saxonia Hedging Agreement in the form set
-----------
out in Schedule 50a, the AMD/Dresdner Subsidy Agreement, the
SAB/Dresdner Subsidy Agreement and the Sale and Settlement
Agreement between AMD Saxonia and the City of Dresden dated 11 June
1996, together with amendments dated 25 October 1996 and 28
February 1997;
(iii) the Credit Agreement dated as of 19 July 1996 between, inter alia,
AMD Inc. and the Bank of America National Trust and Savings
Association, the AMD Inc. Senior Secured Note Indenture dated as of
1 August 1996 between AMD Inc. and United States Trust Company of
New York, as trustee, the Management Plan, the Project Budget, the
Project Schedule, the Plans and Specifications, the Information
Memorandum of AMD Saxonia of September 1996, the [Scheduled Project
Phase] Technical Completion Certificates (Obligors), the [Scheduled
Project Phase] Technical Completion Certificates (Technical
Advisor), the Financial Completion Certificate (Obligors), the
Financial Completion Certificate (Banks' Auditor), and the
Financial Completion Certificate (Technical Advisor) in the form
set out in Schedules 9, 10, 11, 12 and 13, the Statement of the Use
------------------------------
and Source of Funds, in the form set out in the Schedule 16, the
agreements entered into with the Project Manager relating to its
appointment as Project Manager and each Consent and Agreement
required pursuant to the agreements referred to in this definition
in the form set out in Part II of Schedule 40, Annex 3 to Schedule
----------- --------
49, Annex 3 to Schedule 55 or in such other form to which the Agent
-- -----------
has consented and
(iv) all other Operative Documents within the meaning of the Sponsors'
Support Agreement and each other instrument or document designated
by the Agent (with the consent of AMD Saxonia) as an Operative
Document under this
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Agreement or the Sponsors' Support Agreement.
PLANS AND SPECIFICATIONS (PLANE UND SPEZIFIKATIONEN):
the plans and specifications to be prepared by AMD Saxonia and to be
approved by the Technical Advisor, the Agent and each Sponsor for the
fitting out of the Plant and the Design Center, as the same may be
amended from time to time with the consent of each of the AMD Companies
and the Agent. Amendments which do not reduce or affect the value of the
Plant and the Design Center or the capacity and purpose of the Plant as
set out in the Plans and Specifications originally approved, shall not
require the consent of the Agent.
PROJECT ACCOUNTS (PROJEKTKONTEN):
as defined in (S)19.1.
PROJECT AGREEMENTS (PROJEKTVERTRAGE):
the AMD Saxonia Wafer Purchase Agreement, the AMD Holding Wafer Purchase
Agreement, the AMD Saxonia Research, Design and Development Agreement,
in the form set out in Schedule 36, the AMD Holding Research, Design and
-----------
Development Agreement, in the form set out in Schedule 34, the
-----------
Management Service Agreement, in the form set out in Schedule 37, the
-----------
License Agreement, in the form set out in Schedule 38, the Design/Build
-----------
Agreement, in the form set out in Schedule 39, the Equipment Supply
-----------
Contracts, the Service Contracts, the AMD Inc. Guaranty, in the form set
out in Schedule 27 and each other instrument or document designated by
-----------
the Agent (with the consent of AMD Saxonia) as a Project Agreement for
the purposes of this Agreement.
PROJECT BUDGET (PROJEKTBUDGET):
the budget set out in Schedule 6, including such amendments thereto made
----------
with the consent of the Agent in accordance with (S)18.2 of this
Agreement.
PROJECT COSTS (PROJEKTKOSTEN):
all Capital Expenditure and other costs of the kind referred to in the
Project Budget which are incurred by AMD Saxonia in connection with the
Project up to Completion.
PROJECT MANAGER (PROJEKTMANAGER):
Hanscomb GmbH, or such other project manager as may be appointed by AMD
Saxonia on terms approved by the Agent, which approval shall not be
unreasonably withheld.
PROJECT PHASE (PROJEKTABSCHNITT):
each project phase set out in the Project Schedule contemplated for the
implementation of the Project.
PROJECT SCHEDULE (PROJEKTZEITPLAN):
the timetable in the form set out in Schedule 7, including amendments
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thereto made with the consent of the Agent in accordance with (S)18.2 of
this Agreement.
REFERENCE RATE (BASISSATZ):
the reference rate so defined in (S)6.1.1.
REFERENCE BANKS (REFERENZBANKEN):
the Agent together with Commerzbank AG and ABN AMRO Bank (Deutschland)
AG or such other Banks designated by the Agent in their stead, subject
to the approval of AMD Saxonia, such approval not to be unreasonably
withheld.
11
SAB/DRESDNER SUBSIDY AGREEMENT (SAB/DRESDNER ZUWENDUNGSVERTRAG):
the agreement between the Sachsische Aufbaubank GmbH, Dresden and
Dresdner Bank AG, Dresden in its capacity as house bank to AMD Saxonia,
in the form set out in Schedule 26.
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SECURITY DOCUMENTS (SICHERHEITENVERTRAGE):
the agreements and other documents referred to in (S)8.1.
SERVICE CONTRACT (LEISTUNGSVERTRAG):
each contract in respect of services to be performed in favour of AMD
Saxonia (with the exception of the AMD Saxonia Wafer Purchase Agreement,
the Management Service Agreement as set out in Schedule 37 and
employment contracts) which is not an Equipment Supply Contract.
SPONSORS (SPONSOREN):
together, AMD Inc. and AMD Holding.
SPONSORS' SUPPORT AGREEMENT:
the agreement entered into between AMD Inc., AMD Holding, the Agent and
the Security Agent entitled "Sponsors' Support Agreement", in the form
set out in Schedule 28.
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SUBSIDY AGREEMENT (ZUSCHUSSVERTRAG/ZUWENDUNGSVERTRAG):
together, the AMD/Dresdner Subsidy Agreement and the SAB/Dresdner
Subsidy Agreement.
TECHNICAL ADVISOR (TECHNISCHER BERATER):
Fraunhofer Institut fhr Siliziumtechnologie, Itzehoe, or such other
technical advisor as may be appointed by the Agent with the consent of
AMD Saxonia, which consent shall not be unreasonably withheld.
US GAAP:
the generally accepted accounting principles as set forth from time to
time in the opinions and pronouncements of the United States 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.
1.2 The terms referred to in the introduction to this Agreement, in the
Preamble and in (S)1.1 above shall, except where the context otherwise
requires, have the same meanings when used in this Agreement. Unless the
context requires otherwise, such terms shall also have such meanings
when used in agreements, written notifications, confirmations and other
documents which are issued pursuant to the terms of this Agreement.
Unless the context requires otherwise, any reference to an Operative
Document or a Project Agreement shall be a reference to such Document or
Agreement as it shall have been, or from time to time be, amended,
varied, re-issued, replaced, novated or supplemented, in each case, in
accordance with its terms and this Agreement.
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(S)2
FACILITIES
2.1 The Banks hereby agree to make available to AMD Saxonia the following
facilities:
2.1.1 FACILITY A
A long term investment loan in an amount of up to DM 1,500,000,000 (in
words: one billion five hundred million Deutsche Marks). The loan will
be made available by each of the Banks in an amount corresponding to its
commitment as set out in Schedule 1.
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2.1.2 FACILITY B
A long term standby loan in an amount of up to DM 150,000,000 (in words:
one hundred and fifty million Deutsche Marks). The loan will be made
available by each of the Banks in an amount corresponding to its
commitment as set out in Schedule 1.
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Facility A and facility B are also referred to together as the
"Facilities".
2.2 Each Bank shall make available its respective commitment under the
Facilities pursuant to (S)2.1 and Schedule 1, separately and
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independently from each other Bank, through its Lending Office. AMD
Saxonia may draw the Facilities from all the Banks only in the
proportion of their respective commitments in accordance with (S)2.1 and
Schedule 1. No Bank shall be liable to provide or make available any
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advance in respect of amounts to be provided or made available by the
other Banks; any joint and several liability of the Banks is hereby
excluded. The Paying Agent shall be obliged to distribute to AMD Saxonia
the advances to be made by the other Banks only to the extent that the
Paying Agent has in fact received payment of such advances. Each Bank
shall have a claim against AMD Saxonia in the amount of advances made by
such Bank, secured pro rata by the security to be granted in accordance
with the terms and conditions of this Agreement.
2.3 The failure by any Bank to comply with its obligations under this
Agreement shall not affect either the enforceability of this Agreement
as a whole or the obligations of any other party. In such case, AMD
Saxonia shall have a claim solely against the defaulting Bank.
(S)3
PURPOSE
3.1 Facility A shall be used only for the purpose of the partial financing
of the Project Costs in accordance with the Project Budget approved by
the Banks prior to execution of this Agreement and thereafter in
accordance with any revised Project Budget prepared in accordance with
(S)18. Utilisation of Facility A to finance Project Costs which are not
Capital Expenditure is permitted only up to a maximum amount of DM
100,000,000 and only in respect of costs incurred before 1 January 1999.
Subject to the conditions referred to in (S)4.1.3., Facility A may also
be utilised for the repayment of Facility B.
3.2 The use and source of funds in respect of each Project Phase shall be
evidenced by furnishing to the Agent a statement of the use and source
of funds, in the form set out in Schedule 16, certified by the Auditor
-----------
and the Project Manager, such statement to be delivered simultaneously
with the Scheduled Project Phase Technical Completion
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Certificates pursuant to Schedules 9 and 10 for the relevant Project
------------------
Phase and in any event promptly after the expiry of each calendar
quarter, save as may, in individual cases, be otherwise agreed with the
Agent.
3.3 Facility B shall be used on and subject to the terms set out in (S)4.1.2
only for the purpose of the partial financing of Cost Overruns which do
not exceed in aggregate an amount of DM 225,000,000. Cost Overruns up to
the aforesaid amount may be financed in an amount of up to two thirds
thereof from drawings under Facility B on the terms and conditions
referred to below.
(S)4
UTILISATION OF THE FACILITIES
4.1 To the extent that all the conditions precedent set out in (S)5 are
satisfied, the Facilities may be drawn on and subject to the following
terms and conditions by the delivery to the Paying Agent, with a copy to
the Agent, of a written Drawdown Notice to be received by the Paying
Agent, in the case of the first Drawdown Notice at least ten (10)
Banking Days before the drawdown date and, in the case of any other
Drawdown Notice five (5) Banking Days before the drawdown date, set out
in such notice:
4.1.1 FACILITY A
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Advances shall be made up to the cumulative limit in each Project Phase
set out in the Drawdown Schedule in accordance with the Project
Schedule. Advances shall be in minimum amounts of DM 15,000,000 and in
integral multiples of DM 5,000,000 or in an equal amount to the undrawn
portion of Facility A available for the relevant Project Phase. No more
than one advance may be made in any calendar month,
Drawdowns are permitted only in the amount of Project Costs which have
been incurred during a Project Phase, as the same are documented by
invoices and other supporting evidence to be furnished together with the
Drawdown Notice, as required below.
Drawdown Notices, and the confirmation contained therein from AMD
Saxonia in the form set out in Schedule 3, shall be furnished to the
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Agent and the Paying Agent at the same time. The following documents
shall be furnished to the Agent together with relevant Drawdown Notice:
(i) written confirmation of the Managing Directors (Geschaftsfuhrung)
of AMD Saxonia and an authorised representative of AMD Inc. that
the conditions precedent referred to in (S)5.2.2 to 5.2.4 with
respect to it have been satisfied at the time of the Drawdown
Notice;
(ii) unless the Agent has waived the same, copies of invoices and a
description in reasonable detail of the deliveries and services
performed in respect of amounts which are at least equal to the
amount proposed to be drawn. Project Costs which are not Capital
Expenditure may be supported by evidence other than invoices, in
such form as is reasonably satisfactory to the Agent;
(iii) written confirmation of (a) the Project Manager that the deliveries
and services referred to in the evidence furnished pursuant to (ii)
are in accordance with the Project Budget, have been performed in
all material respects in accordance with the contractual
obligations to which they relate and (b) written
14
confirmation of the Auditor that the amounts invoiced are, or were,
to the extent already paid, due and any contractually agreed
retentions and other deductions, such as discounts, have been
deducted in each case, in the form set out in Schedule 21.
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Amounts drawn and subsequently repaid may not be reborrowed.
4.1.2 FACILITY B
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Utilisations of Facility B are permitted only to the extent that
Facility A has been fully drawn for the relevant Project Phase in
accordance with (S)4.1.1 and the Sponsors have complied in full with
their then obligations with respect to such Cost Overruns in accordance
with Section 4.1 of the Sponsors' Support Agreement. Advances may be
made up to the relevant cumulative maximum amount for the relevant
Project Phase in accordance with the Drawdown Schedule. Advances shall
be in minimum amounts of DM 2,500,000 and in integral multiples of DM
500,000 or in an amount equal to the undrawn portion of the amount of
Facility B available for the relevant Project Phase.
Drawdowns are permitted only in the amount of Capital Expenditure which
has been incurred during a Project Phase, as the same is documented by
invoices and the other supporting evidence set out below to be furnished
together with the Drawdown Notice.
Drawdown Notices and the confirmation contained therein from AMD Saxonia
in the form set out in Schedule 3 shall be furnished to the Paying Agent
----------
and the Agent at the same time. The following documents shall be
furnished to the Agent together with the relevant Drawdown Notice:
(i) written confirmation of the Managing Directors (Geschaftsfhhrung)
of AMD Saxonia and an authorised representative of AMD Inc. that
the conditions precedent referred to in (S)5.2.2 to 5.2.4 with
respect to it and the first paragraph of this (S) 4.1.2 have been
satisfied at the time of the Drawdown Notice;
(ii) unless the Agent has waived the same, copies of invoices and a
description in reasonable detail of the deliveries and services
performed in respect of amounts which are at least equal to the
amount proposed to be drawn;
(iii) written confirmation of (a) the Project Manager that the deliveries
and services referred to in the evidence furnished pursuant to (ii)
have been performed in all material respects in accordance with the
contractual obligations to which they relate and (b) the Auditor
that the amounts invoiced are, or were, to the extent already paid,
due and any contractually agreed retentions and other deductions,
such as discounts, have been deducted and that all amounts relate
to Cost Overruns for the amount in question, in each case, in the
form set out in Schedule 21;
-----------
Amounts drawn may be reborrowed only to the extent that such amounts
have been repaid in accordance with (S)4.1.3.
4.1.3 To the extent that at the end of any Project Phase the maximum amount
available under Facility A for such Project Phase has not been fully
drawn, AMD Saxonia shall be obliged to utilise the entire amount of the
difference for repayment of Facility B. In such case, AMD Saxonia shall
deliver to the Paying Agent, with a copy to the Agent, at the
15
latest on the tenth Banking Day after the end of the relevant Project
Phase, a Drawdown Notice for the relevant amount of Facility A pursuant
to (S)4.1.1, and in conjunction with (S)6.2 (but without the documents
referred to in (S)4.1.1 (i) to (iii)).
A drawing under Facility A and a repayment of Facility B shall be
effected by netting with value at the latest on the fifth Banking Day
after receipt of the Drawdown Notice by the Paying Agent and the Agent.
Amounts so repaid may be reborrowed under Facility B. If a written
Drawdown Notice is not received by the Paying Agent before the tenth
Banking Day referred to above, the Agent shall be authorised to effect
such repayment on the conditions applicable to the advance under
Facility A last drawn.
4.2 Drawings of the Facilities are not permitted after whichever is the
earlier of Completion and 29 June 2001.
4.3 Drawings under the Facilities shall be permitted only to the extent that
the making of an advance would not result in the total amount advanced
by the Banks exceeding by more than three times the total amount paid up
on the ordinary share capital of AMD Saxonia and the total amount of
subordinated loans advanced and/or cash contributions made to the
reserves and not repaid in accordance with Section 4.4 or Section 6.3
second sentence of the Sponsors' Support Agreement and used for Project
Costs.
4.4 Advances under the Facilities will be made available to AMD Saxonia by
the Paying Agent crediting AMD Saxonia's [*] with the Agent.
4.5 The Banks shall be entitled to reject Drawdown Notices from AMD Saxonia
if and to the extent that AMD Saxonia has assigned or charged its claims
under this Agreement to any third party or if such claims have been
subject to an attachment order without the consent of the Banks or if
AMD Saxonia is in default in the payment of any amount due or is in
breach of a material obligation, under this Agreement.
(S)5
CONDITIONS TO DRAWING
5.1 Initial utilisation of the Facilities is subject to the satisfaction of
the conditions set out in (S)4 and all the following conditions
(including those set out in (S)5.2) at the date of the Drawdown Notice
and written confirmation from the Agent and/or the Paying Agent that it
has received a duly completed Drawdown Notice and confirmation from the
Agent that it has received the documents referred to in (S)5.1.1 to
5.1.16.
5.1.1 Written confirmation of the Chief Financial Officer of AMD Inc. that
[*].
5.1.2 Written confirmation from AMD Saxonia and AMD Inc. that as at the date
of the initial Drawdown Notice all governmental approvals, consents and
measures which are necessary for the implementation and ongoing
operation of the Project in accordance with the Plans and Specifications
and the Operative Documents are available, or have been taken, as the
case may be, which, according to the progress of the Project are
* CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
16
appropriate and there is no reason to believe that the same will be
revoked, restricted or made subject to conditions or that governmental
approvals, consents and measures necessary at a later stage of the
Project will not be obtained or taken in a timely fashion. Schedule 20
-----------
contains a list of all material approvals, consents and measures within
the meaning referred to above. To the extent applicable as aforesaid and
if any Bank should so require, AMD Saxonia shall furnish the Agent with
certified copies of all relevant documents required for the performance
of the Operative Documents, and of the governmental approvals, consents
and measures necessary for the operation of the Fabrication Facility and
the Design Center.
5.1.3 Confirmation from AMD Inc. that as at the date of the initial Drawdown
Notice all consents or approvals necessary from third party creditors in
relation to the indebtedness or contingent liabilities of AMD Inc. and
in relation to the execution, delivery and performance by each of the
AMD Companies of their existing obligations and the subject matter of
the Operative Documents have been obtained.
5.1.4 Receipt of an extract from the Land Register confirming that AMD Saxonia
has been registered in the Register as the owner of parcels referred to
as nos. Folio 764 parcels nos. 121/2, 154/2, 122, 123, 124, 126, 125/2,
127, 128/2, 129, 129/1, 129/2, 129/3, 130, 131, 132, 133/1, 134, 135,
136, 137, 138, 139, 140, 141, 142, 143, 143a, 144, 145, 146, 147, 148,
149, 151/2, 152, 153, 154/2, 155, 156, 157, 158, 159, 160/1, 160/2, 161,
162, 522/1, 547, 558/2, 558/3, 639, 694, 694/1, 695/2 und Folio 851
parcels no. 150/2 in the County Court of Dresden von Wilschdorf and that
the land charge to be granted in accordance with (S)8.1.6 has been
registered and that there are no prior registered charges.
5.1.5 All fees to be borne by AMD Saxonia pursuant to this Agreement and the
other Operative Documents, to which the Agent, the Security Agent, the
Paying Agent or the Banks are party, and other payments relating to
costs incurred pursuant to (S)25.1 which are due have been paid.
5.1.6 The Agent has received the following duly executed legally binding
documents whose effectiveness is not conditional (save solely in respect
of any condition relating to this Agreement):
(i) all Security Documents pursuant to (S)8 with the exception of such
Consents and Agreements required in accordance with this Agreement
and the Security Documents set out in Schedules 49 and 55 which are
------------ --
to be furnished together with the relevant contracts when the same
are entered into
(ii) Sponsors' Support Agreement, in the form set out in Schedule 28
-----------
(iii) AMD Saxonia Wafer Purchase Agreement, in the form set out in
Schedule 35.
-----------
(iv) AMD Holding Wafer Purchase Agreement, in the form set out in
Schedule 33.
-----------
(v) AMD Saxonia Research, Design and Development Agreement, in the form
set out in Schedule 36.
-----------
(vi) AMD Holding Research, Design and Development Agreement, in the form
set out in Schedule 34.
-----------
(vii) Management Service Agreement, in the form set out in Schedule 37.
-----------
17
(viii) License Agreement in the form set out in Schedule 38.
-----------
(ix) Sponsors' Loan Agreement, in the form set out in Schedule 29.
-----------
(x) Sponsors' Consent and Agreement, in the form set out in
Schedule 31.
-----------
(xi) Design/Build Agreement including Contractor's Consent and
Agreement, in the form set out in Schedule 39.
-----------
(xii) Material Equipment Supply Contracts and Material Service Contracts
(to the extent executed as at the date of the initial Drawdown
Notice), including relevant Consents and Agreements in the form set
out in Schedule 40, Annex 3 of Schedule 49 or in such other form to
----------- -----------
the Agent has consented to, as well as all other Consents and
Agreements required in accordance with the Security Documents in
the form set out in Schedules 49 and 55.
------------ --
(xiii) AMD/Dresdner Subsidy Agreement (Zuschussvertrag).
(xiv) SAB/Dresdner Subsidy Agreement (Zuwendungsvertrag).
(xv) AMD Saxonia Hedging Agreement in the form set out in Schedule 50a.
------------
(xvi) Letter from the European Commission confirming its non-objection to
the interest subsidies to be paid under the Subsidy Agreements.
(xvii) Sale and Settlement Agreement between AMD Saxonia and the City of
Dresden dated 11 June 1996, together with amendments dated 25
October 1996 and 28 February 1997.
5.1.7 The Agent has received from AMD Saxonia, AMD Holding and AMD Inc.
respectively, confirmation that, as at the date of relevant Drawdown
Notice, subject to any disclosure to the contrary in the Disclosure
Schedule set out in Schedule 15, (i) its representations and warranties
-----------
in the Operative Documents are true and accurate in all material
respects as at such date; (ii) none of the events referred to in (S)21
has occurred and is continuing, (iii) each of the Operative Documents to
which it is a party is legally binding on it and in full force and
effect and (iv) there has been no breach by AMD Saxonia of such
Operative Documents.
5.1.8 The Agent has been furnished with the following documents:
(i) Documents relating to AMD INC.
-----------------------------
(a) a certificate of incorporation of AMD Inc. together with any
amendments thereto duly certified by the Secretary of State of the
State of Delaware, USA;
(b) a certificate of the Secretary of State of the State Delaware, USA,
referring to the certificate of incorporation of AMD Inc. and any
amendments and confirming that the same are the only charter
documents furnished to the Secretary of State concerning AMD Inc.,
that AMD Inc. is incorporated in the State of Delaware, USA, and is
in good standing and at the date of the certificate all franchise
taxes due up to that date have been paid;
(c) a certificate signed by the Secretary of State of the State of
California, USA,
18
in customary form, confirming that under Californian law, AMD Inc.
satisfies all the conditions for intra-state business and as at the
date of the confirmation is entitled to engage in intra-state
business, subject to any required permits of the State of
California otherwise required;
(d) a duly signed confirmation of the Recorder of Deeds of New Castle
County, Delaware, USA, in customary form, confirming that a
certified copy of the certificate of incorporation of AMD Inc.
together with all amendments referred to in the certificate
delivered pursuant to (S)5.1.8 (b), has been furnished to his
office;
(e) a duly signed confirmation of the Secretary of the Franchise Tax
Board of the State of California, USA, in customary form,
confirming that AMD Inc. is in good standing, has no unpaid tax
obligations known to the Franchise Tax Board and is entitled to
carry on business in the State of California; the provision of such
confirmation shall not, however, be necessary to the extent that
such confirmation cannot be provided for the reasons disclosed in
the Disclosure Schedule, provided the decisions concerning the tax
assessments have been challenged bona fide in appropriate
proceedings and provision has been made therefor in accordance with
US GAAP.
The date of the documents referred to above shall not be more than one
month prior to the date of the initial Drawdown Notice.
(ii) Documents relating to AMD HOLDING
---------------------------------
(a) certified copy of the Commercial Registry extract and the articles
of incorporation of AMD Holding in the form certified by the County
Court. The date of the Commercial Registry extract shall not be
more than one month prior to the date of the Drawdown Notice;
(b) confirmation of the Managing Directors (Geschaftsfhhrung) of AMD
Holding that the matters set out in the documents referred to in
(a) are true and accurate in all respects as they relate to the
actual facts;
(c) audited financial statements of AMD Holding, including notes to the
statements and a management report, together with an unqualified
report by the Auditors for the year ended 31 December 1996.
(iii) Documents relating to AMD SAXONIA
---------------------------------
(a) certified copy of the Commercial Registry extract and the articles
of incorporation of AMD Saxonia in the form certified by the County
Court; the date of the Commercial Registry extract shall not be
more than one month prior to the date of the initial Drawdown
Notice;
(b) written confirmation of the Managing Directors (Geschaftsfhhrung)
of AMD Saxonia that the documents referred to in (a) are true and
accurate in all respects as they relate to the actual facts.
(c) audited financial statements of AMD Saxonia including notes to the
statements and a management report, together with an unqualified
report by the Auditors for the year ended 31 December 1996.
19
5.1.9 The Agent has received from AMD Inc. confirmation in the form of
Schedule 3, dated as of the date of the initial Drawdown Notice, stating
----------
that there is attached (i) a written resolution of its Board of
Directors authorising execution of the Operative Documents and (ii) a
copy of its by-laws in effect at the date of the initial Drawdown Notice
and (iii) a list of its agents and officers who have signed the
Operative Documents and the documents relating thereto as authorised
signatories.
5.1.10 The Agent has received an opinion acceptable to it from a recognised
reputable first class US financial advisory firm confirming that the
Operative Documents to which AMD Inc. is a party are fair to AMD Inc.
from a financial point of view.
5.1.11 The Agent has received the following legal opinions:
(i) legal opinion (including an Exhibit A thereto in a form
satisfactory to the Agent) of Bronson, Bronson & McKinnon LLP,
counsel to AMD Inc., in the form set out in Schedule 57, relating
-----------
to the Senior Secured Note Indenture dated 1 August 1996 and the
Credit Agreement dated 19 July 1996 each as referred to in
(S)15.1.13, dated not more than 21 calendar after the date hereof;
(ii) legal opinion of O'Melveny & Myers LLP, counsel to the AMD
Companies, of even date herewith, in the form set out in
Schedule 58, together with confirmation in accordance with
-----------
Schedule 58 from O'Melveny & Myers LLP that the statements referred
-----------
to in the legal opinion continue to be true and accurate as at a
date not more than ten calendar days prior to the date of the
initial Drawdown Notice;
(iii) legal opinion of Norr, Stiefenhofer & Lutz, counsel to the AMD
Companies including an opinion relating to the completeness of the
schedule of required governmental approvals, permits and measures
(Schedule 20) as well as relating to the status of such required
-----------
approvals, permits and measures in accordance with the progress of
the Project, in a form updated from that set out in Schedule 59
-----------
satisfactory to the Banks dated not more than ten calendar days
prior to the date of the initial Drawdown Notice; and
(iv) legal opinion of Doser Amereller Noack / Baker & McKenzie, counsel
to the Agent and the Banks of even date herewith, in the form set
out in Schedule 60, together with confirmation from Doser Amereller
-----------
Noack/Baker & McKenzie that the statements referred to in the legal
opinion continue to be true and accurate as at a date not more than
ten calendar days prior to the date of the initial Drawdown Notice;
(v) legal opinions of Feddersen Laule Scherzberg & Ohle Hansen
Ewerwahn, counsel to the Agent and the Banks of even date herewith
in the form set out in Schedule 61, together with confirmation from
-----------
Feddersen Laule Scherzberg & Ohle Hansen Ewerwahn that the
statements referred to in the legal opinion continue to be true and
accurate as at a date not more than ten calendar days prior to the
date of the initial Drawdown Notice.
5.1.12 The Agent has received a technical report (Technical Report) from the
Technical Advisor, in form and substance satisfactory to the Agent
together with an updated confirmation from the Technical Advisor that
the Technical Report continues to be true and accurate in all material
respects together with the confirmation in writing from
20
AMD Saxonia in the form set out in Schedule 19;
-----------
5.1.13 The Agent has received confirmations from AMD Saxonia's Insurance
Brokers in the form of Annexes I and II of Schedule 22 as well as
-----------
confirmation from the Insurance Advisor in form and substance
satisfactory to the Agent evidencing, in particular, that AMD Saxonia
has taken out insurances in the scope required pursuant to (S)17.8 and
Schedule 22.
-----------
5.1.14 AMD Saxonia has registered its stated capital of at least DM 217,500,00
in the Commercial Register of which an amount of at least DM 108,750,000
has been paid up, at the latest on the date of the initial Drawdown
Notice and that a sum in this amount has been credited to a Project
Account in accordance with (S)19.
5.1.15 The Agent has received the Plans and Specifications in substance
satisfactory to the Technical Advisor.
5.1.16 The conditions to initial drawing referred to in the AMD/Dresdner
Subsidy Agreement and the SAB/Dresdner Subsidy Agreement relating to the
payment of grants and subsidies have been satisfied.
5.2 Each of the following conditions must be satisfied on each drawing
(including the first) of the Facilities:
5.2.1 the Agent and the Paying Agent have received a Drawdown Notice and the
Agent has received the documents to be submitted simultaneously with
such notice pursuant to (S)4.1. Each Drawdown Notice shall in particular
contain confirmation that the conditions referred to in (S)5.2.2 to
(S)5.2.4 below are true and accurate;
5.2.2 the representations and warranties given by each of the AMD Companies in
each of the Operative Documents are true and accurate in all material
respects as at the date of the Drawdown Notice and will be true and
accurate as at the date of drawing, save to the extent that their
content relates solely to an earlier date;
5.2.3 as at the date of the Drawdown Notice and as at the date of drawing,
none of the events referred to in (S)21 which would entitle the Banks to
terminate this Agreement has occurred;
5.2.4 as at the date of the Drawdown Notice and as at the date of drawing no
event which has a "Material Adverse Effect" within the meaning of the
Sponsors' Support Agreement has occurred;
5.2.5 the Agent has received a certified copy of each Material Equipment
Supply Contract and each Material Service Contract entered into by such
date, together with the written Consent and Agreements of the other
contracting party relating to the transfer of the relevant contracts in
the form set out in Part II of Schedule 40 or in such other form to
-----------
which the Agent shall have consented together with all Consents and
Agreements required pursuant to the Security Documents set out in
Schedule 49 and 55 which have not already been obtained;
----------- --
5.2.6 the Agent has received evidence reasonably requested by it that all the
governmental approvals, permits and measures necessary according to the
progress of the Project have been granted and, or taken, in accordance
with Part B of Schedule 20 as well as, at the beginning of each Project
-----------
Phase, a legal opinion acceptable to it from Norr, Stiefenhofer
21
& Lutz relating to the completeness and the legal validity of such
approvals, permits and measures;
5.2.7 the Agent has received at the beginning of each then current Project
Phase confirmation in the form of the Scheduled Project Phase Technical
Completion Certificates in accordance with Schedules 9 and 10 stating
----------- --
that the relevant preceding Project Phase has been completed;
5.2.8 the Agent has received at the end of each calendar year confirmations
from AMD Saxonia's Insurance Brokers in the form of Annexes I and II of
Schedule 22 as well as confirmation of the Insurance Advisor pursuant to
-----------
(S)5.1.13;
5.2.9 the Agent has received all evidence reasonably requested by it relating
to compliance with or the enforceability of AMD Saxonia's obligations
under this Agreement and the Security Documents.
(S)6
INTEREST, COMMITMENT FEE, PAYMENTS
6.1 AMD Saxonia may elect, by a notification in a Drawdown Notice and/or an
interest rate notice, whether a variable rate, a fixed rate or a
combination of variable and fixed rates should apply to drawings under
Facility A. Subject to the provisions of (S)10.1, Facility B may only be
drawn on the basis of a variable rate.
The rate of interest applicable to each advance drawn and the Interest
Period applicable thereto as determined in accordance with (S)6.2 shall
be, at AMD Saxonia's option:
(i) in respect of a fixed rate, the sum of the Reference Rate and the
margin,
(ii) in respect of a variable rate, the sum of the LIBOR-Rate and the
margin.
6.1.1 The Reference Rate is the arithmetic mean (rounded up to the fourth
--------------
decimal place) of the fixed rates per annum for DM interest rate swaps
(fixed rate as against 6 months LIBOR) in an amount equal to the
relevant advance for the Interest Period requested by AMD Saxonia, as
corresponds to the rate quoted by the Reference Banks at 11.00 a.m.
(London time) as the offered rate on the second Banking Day prior to the
relevant Interest Period, as determined by the Paying Agent.
The LIBOR-Rate is the DM interest rate per annum in the London Interbank
----------
Market which in accordance with "Telerate Screen" page 3750 (or such
other page as may be substituted for page 3750 on that system for the
purpose of displaying offered rates for DM deposits) is quoted as the
offered rate at 11.00 a.m (London time) on the second Banking Day prior
to the relevant Interest Period for such Interest Period.
To the extent that no interest rate is displayed on the relevant
"Telerate Screen" page at the relevant time on any day for the
determination of the interest rate, the rate determined by the Paying
Agent shall be the arithmetic mean (rounded to the fourth decimal place)
quoted to the Paying Agent by the Reference Banks as the DM interest
rate per annum at which the Reference Banks offer to prime banks in the
London Interbank Market on the relevant date at 11.00 a.m. London time
for deposits for the relevant period and in an amount comparable to the
relevant advance.
22
If any Reference Bank does not notify such a rate to the Paying Agent
for any relevant period, the LIBOR-Rate and/or the Reference Rate as
applicable shall be determined on the basis of the rates notified by the
other Reference Banks.
6.1.2 The margin applicable to Facility A and Facility B prior to Completion
shall be one percent (1.00%) per annum. After Completion, the margin
shall be calculated by reference to:
(a) the rating of the public long-term senior unsecured debt securities
of AMD Inc. by Moody's Investor Services, Inc. (or any successor or
other undertaking which has assumed the relevant functions of
Moody's Investor Service, Inc. which is a rating agency of
international repute) in effect at the relevant time; and
(b) the ratio (expressed as a percentage of utilization) of outstanding
advances under Facility A to DM 1,500,000,000,-,
in each case, corresponding to the interest rate set out in the right
hand column of the following table:
RATING UTILISATION PERCENTAGE MARGIN
- ------------------------------------------------------------------------------------------------
less than "investment grade 70% or more 1.00% per annum;
(Baa3)" or no rating
less than "investment grade at least 50% but less than 70% 0.90% per annum;
(Baa3)" or no rating
less than "investment grade less than 50% 0.75% per annum;
(Baa3)" or no rating
"investment grade (Baa3)" 70% or more 0.75% per annum;
or better
"investment grade (Baa3)" at least 50% but less than 70% 0.70% per annum; and
or better
"investment grade (Baa3)" less than 50% 0.55% per annum.
or better
Adjustments to the margin in respect of each advance shall be made at
the beginning of the next Interest Period and/or at the next interest
payment date as set out in (S)6.6, as the case may be.
AMD Saxonia shall ensure that the Interest Periods elected by it always
correspond with the repayment schedule in (S)7.2 of this Agreement. To
the extent that any advance must be prepaid prior to the Interest Period
agreed therefor in order to comply with such repayment schedule, the
provisions of (S)7.5 shall apply accordingly.
6.2 In respect of a variable interest rate, the Interest Periods shall be 1,
3, 6 or 12 months (to the extent available). The Interest Periods in
respect of fixed interest rates shall not exceed 5 and shall not be less
than 2 years and must always be in integral multiples of one year.
23
Upon the Agent's request, AMD Saxonia will consolidate individual
outstanding advances so that not more than ten separate advances are
outstanding at any one time.
6.3 AMD Saxonia will notify the Agent, with a copy to the Paying Agent, in
an irrevocable Drawdown Notice and/or an interest rate notice to be
received at the latest by the fifth Banking Day prior to an Interest
Period of the relevant interest rate (variable or fixed rate), the
amount for which the specified interest rate shall apply and the
duration of the relevant Interest Period. If the Agent has not received
an interest rate notice in the form set out in Schedule 4 for the next
----------
Interest Period, the relevant advance shall be for an Interest Period of
the same duration as the previous Interest Period and bear interest on
the same interest rate basis applicable to such Period.
6.4 The first Interest Period for each advance will commence on the date of
drawing. Each succeeding Interest Period will commence on the expiration
of the immediately preceding Interest Period. If the last day of an
Interest Period does not fall on a Banking Day, the Interest Period
shall be deemed to end on the next following Banking Day or if the
Interest Period relates to an advance bearing interest at a variable
rate and the next following Banking Day would otherwise fall in the next
calendar month, such Interest Period shall be deemed to end on the
immediately preceding Banking Day. If an Interest Period for any advance
would otherwise extend beyond a due date for payment pursuant to (S)7.2
of this Agreement, the relevant Interest Period shall be deemed to end
on the relevant due date.
6.5 Interest in respect of the variable interest rate shall be calculated on
the basis of the actual number of days elapsed and a 360 day year.
Interest in respect of the fixed interest rate shall be calculated on
the basis of a 30 day month and a 360 day year.
6.6 Interest shall be paid on the last day of an interest period. In the
case of an Interest Period for a variable rate advance of more than 3
months interest shall be due and payable at the end of every 3 months.
In the case of a fixed rate advance, interest shall be paid on the last
day of each calendar quarter or, if such day is not a Banking Day, on
the next succeeding Banking Day.
6.7 AMD Saxonia shall be in default (Verzug), without any requirement for
notice, if it has failed to make payments which are due hereunder on the
relevant due date or if it does not make such payments in full. AMD
Saxonia shall pay default interest on the outstanding amount of the
overdue payment at the rate equal to 4 percentage points per annum above
the applicable discount rate of the German Bundesbank, or the equivalent
rate following introduction of the single currency under European
Monetary Union, from the due date until receipt by the Paying Agent of
the outstanding amounts. Should there be no such rate following
introduction of the single currency, the Banks shall determine the
applicable rate in accordance with (S)315 BGB. If AMD Saxonia is in
default of payment of interest, AMD Saxonia shall pay to the Banks
liquidated damages. The amount of such liquidated damages shall
correspond to a rate of interest of 4 percentage points above the
applicable discount rate of the German Bundesbank (or the equivalent
rate following introduction of the single currency under European
Monetary Union) from the due date until receipt by the Paying Agent of
the overdue interest amounts. Should there be no such rate following
introduction of the single currency, the Banks shall determine the
applicable rate in accordance with (S)315 BGB.
6.8 AMD Saxonia agrees to pay to the Paying Agent for the account of each
Bank as from the date of execution of this Agreement until the end of
the availability period pursuant to (S)4.2 a commitment fee at the rate
of 0,2 % per annum on such Bank's commitment of
24
the unused portion of the Facilities calculated on the basis of the
actual days elapsed and on the basis of a 360 day year. The commitment
fee shall be calculated on a quarterly basis and shall be payable at the
end of each calendar quarter for that quarter.
6.9 All payments by AMD Saxonia pursuant to this Agreement shall be made to
the Paying Agent's Account No. 0809580200 with the Agent or such other
account as the Paying Agent shall designate. Payments made otherwise
than in accordance with this provision shall not constitute good
discharge in favour of AMD Saxonia.
6.10 AMD Saxonia shall not be entitled to assert any rights of set off or
retention against the claims of the Banks for payment hereunder.
(S)7
TERM AND REPAYMENT
7.1 The Facilities shall be for a term expiring on 31 December 2006.
7.2 The Facilities shall be amortized, commencing on whichever date is the
earlier of:
(i) the last Banking Day of the sixth full calendar month after
Completion; and
(ii) 30 June 2001,
in semi-annual repayments in the percentages set out below on the last
Banking Day of the relevant six month period:
PERCENTAGE OF THE AGGREGATE PRINCIPAL
AMOUNT OF THE FACILITIES OUTSTANDING AT
THE END OF THE AVAILABILITY PERIOD
INSTALLMENTS PURSUANT TO (S)4.2
- -------------------------------------------------------------------------------
first and second installment 6.50% each
third and fourth installment 12.25% each
fifth and sixth installment 13.25% each
seventh and eighth installment 9.75% each
ninth and tenth installment 4.75% each
eleventh and twelfth installment 3.50% each
Each scheduled repayment of the Facilities shall be made, together with
all interest accrued at the due date for repayment and with all other
amounts due under this Agreement at such date.
7.3 AMD Saxonia is entitled to prepay the outstanding amount of the
Facilities, in whole or in part, but not in an amount of less than DM
10,000,000 or, if higher, an integral multiple of DM 5,000,000 or the
total amount outstanding provided that it shall have notified the Paying
Agent (with a copy to the Agent) at least five Banking Days in advance
by notice in writing, substantially in the form of Schedule 5. Each
----------
repayment shall include accrued interest up to the date of repayment and
shall be made (prior to any
25
consolidation pursuant to (S)6.3) pro rata as between Facility A and
Facility B and as between advances drawn.
7.4 AMD Saxonia shall, commencing in the financial year ending in 2001 or,
if earlier, the financial year in which Completion occurs, in each case
within thirty days after finalisation of the report and accounts and, at
the latest, by 31 March (or, if not a Banking Day, by the immediately
succeeding Banking Day) of each year, make a mandatory prepayment of the
outstanding amount of the Facilities up to an amount of DM 50,000,000
for each financial year from the aggregate Excess Cash in respect of
such financial year. To the extent that, in respect of a LIBOR-Rate
advance, an Interest Period does not expire on 31 March, the amounts in
question will be credited to an account pursuant to (S)19 and will be
used to repay the relevant advance at the end of the shortest existing
Interest Period or at the next interest payment date. Until repayment
amounts so standing to the credit of the Project Accounts shall bear
interest at such rate of interest as is available, as determined by AMD
Saxonia, or be invested pursuant to (S)19.3.
7.5 Prepayments shall be applied to payments pursuant to (S)7.2 in inverse
order of maturity. In the event that the Banks incur a loss arising from
a repayment (save for a repayment at the end of an Interest Period) by
virtue of the fact that the reinvestment of any advances repaid by AMD
Saxonia is only possible at interest rates lower than those agreed with
AMD Saxonia, AMD Saxonia shall indemnify the Banks in respect of
reinvestment losses so incurred as a result of prepayment. In such
circumstances, the Banks shall be entitled to make a claim for the
reinvestment loss which is equal to the difference between the rate of
interest which would have been payable by AMD Saxonia for the relevant
remaining term of the Interest Period on the basis of the applicable
rates and the rate available to the Banks for such period as the
reinvestment rate. For this purpose, the reinvestment rate for the
remaining term and/or the remaining term of the Interest Period is
capital market rate corresponding to the offered rate for German
Pfandbriefe/Kommunalobligationen (Inhaberschuldverschreibungen) of an
equivalent maturity in the interbank market, determined in accordance
with (S)6.1. The difference in interest rates shall be discounted to net
present value at a discount rate equivalent to the reinvestment rate.
The Banks shall be entitled to make a claim for any loss incurred by
them which is higher. AMD Saxonia shall have the right to prove that
damages have not been incurred or not in the amount claimed. All notices
in relation to a prepayment shall be irrevocable.
(S)8
SECURITY
8.1 The Facilities are secured by the 65/35 Guaranty in the form known to
the Banks and AMD Saxonia, as set out in Schedule 24 including in
-----------
particular deeds of guaranty in the form set out in the specimen annexed
thereto. A copy of the Guaranty Decision is also set out in Schedule 24
-----------
and the terms of such Decision constitute a material term of this
Agreement. All terms and conditions of the Guaranty Decision to be
incorporated herein are hereby agreed by the parties notwithstanding
that the same are not expressly set out in this Agreement; this shall
apply in particular to the obligation to agree to amendments to this
Agreement only with the consent of the Guarantors. AMD Saxonia
undertakes to observe and comply with all relevant conditions of the
Guaranty Decision directly applicable to it and to do all things to
enable AMD Inc. to observe and comply with all obligations encumbent on
it in connection with the Guaranty Decision. The Guarantors
26
are entitled to appoint authorised representatives for the purpose of
administering the 65/35 Guaranty. In addition, AMD Saxonia shall grant,
or procure that there is granted, in favour of the Banks and the
Security Agent the following security as security for all claims of the
Banks as well as any potential claims of the Guarantors arising under or
in connection with this Agreement:
8.1.1 a joint and several guaranty by the Sponsors (until Completion) in an
amount of up to DM 217.500.000, in the form set out in Schedule 32;
-----------
8.1.2 a subordination agreement between AMD Saxonia, the Sponsors, the Agent
and the Security Agent, in the form set out in Schedule 30;
-----------
8.1.3 a guaranty by AMD Inc. of obligations of AMD Holding under certain
Operative Documents, in the form set out in Schedule 27;
-----------
8.1.4 a pledge of all shares in AMD Holding held by AMD Inc. in the form set
as out in Schedule 41;
-----------
8.1.5 a subordination agreement between AMD Holding, AMD Inc., the Agent and
the Security Agent, in the form set out in Schedule 42.
-----------
8.1.6 a first priority land charge over real property registered in the Land
Registry of the Dresden County Court, Dresden von Wilschdorf parcels
numbers Folio 764 parcels nos. 121/2, 154/2, 122, 123, 124, 126, 125/2,
127, 128/2, 129, 129/1, 129/2, 129/3, 130, 131, 132, 133/1, 134, 135,
136, 137, 138, 139, 140, 141, 142, 143, 143a, 144, 145, 146, 147, 148,
149, 151/2, 152, 153, 154/2, 155, 156, 157, 158, 159, 160/1, 160/2, 161,
162, 522/1, 547, 558/2, 558/3, 639, 694, 694/1, 695/2 und Folio 851
parcel no. 150/2 of AMD Saxonia in respect of an amount of DM
1,650,000,000 together with interest in an amount of 15 % per annum
together with a lump sum payment in an amount of 5 % of the total charge
amount as an immediately enforceable charge without prior charges in
Section III of the Register in favour of the Security Agent together
with a personal acknowledgment of enforceability by AMD Saxonia to be
granted in the form set out in Schedule 43;
-----------
8.1.7 a security assignment of the current assets of AMD Saxonia (raw
materials, supplemental and operational materials, finished and
unfinished products as well as trading products), in the form set out in
Schedule 44;
-----------
8.1.8 a security assignment of fixed assets of AMD Saxonia, in the form set
out in Schedule 45;
-----------
8.1.9 a security assignment of insurance claims of AMD Saxonia, in the form
set out in Schedule 46;
-----------
8.1.10 a global assignment of all receivables of AMD Saxonia not otherwise
assigned from the supply of equipment and other services and from other
claims against debtors other than the Sponsors, in the form set out in
Schedule 47;
-----------
8.1.11 a pledge of all amounts standing to the credit of AMD Saxonia in the
Project Accounts in the form set out in Schedule 48;
-----------
8.1.12 an assignment of AMD Saxonia's rights under the Design/Build Agreement
in the form set out in Schedule 39, the Equipment Supply Contracts, the
Service Contracts and other contracts not governed by the laws of the
United States of America or any state thereof together with an offer to
transfer such contracts as required by Schedule 49 and with
-----------
27
Consents and Agreements in the form of Annex 3 to Schedule 49 as therein
-----------
required. AMD Saxonia is hereby authorised by the Security Agent to
enforce on its behalf rights in its name under the agreements referred
to above as against the relevant obligor for as long as no circumstances
exist which entitle the Banks to terminate this Agreement; AMD Saxonia
hereby accepts such authorisation.
8.1.13 an assignment of claims and contractual rights of AMD Saxonia under the
AMD Saxonia Wafer Purchase Agreement , the Equipment Supply Contracts,
the Service Contracts and rights under other contracts governed by the
laws of the United States of America or any state thereof, in the form
set out in Schedule 50.
-----------
8.1.14 a pledge of all shares in AMD Saxonia held by AMD Holding, in the form
set out in Schedule 51;
-----------
8.1.15 a security assignment of current assets of AMD Holding (raw materials,
supplemental and operational materials, finished and unfinished products
as well as trading products), in the form set out in Schedule 52.
-----------
8.1.16 a global assignment of all receivables of AMD Holding not otherwise
assigned from the supply of equipment and other services and of other
claims against all debtors, with the exception of AMD Inc., in the form
set out in Schedule 53;
-----------
8.1.17 a pledge of all amounts standing to the credit of AMD Holding in bank
accounts, in the form set out in Schedule 54;
-----------
8.1.18 an assignment of AMD Holding's rights under contracts not governed by
laws of the United States of America or any state thereof and an offer
to transfer such contracts, pursuant to the form set out in Schedule 55
-----------
together with Consents and Agreements in the form set out in Annex 3 to
Schedule 55 as therein required; AMD Holding will be authorised by the
-----------
Security Agent to enforce on its behalf rights in its name under the
agreements referred to above as against the relevant obligor for so long
as no circumstances exist which entitle the Banks to terminate this
Agreement.
8.1.19 an assignment of claims and contractual rights of AMD Holding under the
AMD Holding Wafer Purchase Agreement and other contracts governed by the
laws of the United States of America or any state thereof, in the form
set out in Schedule 56, including to the extent required by this
-----------
Agreement Consents and Agreements in the form set out in Schedule 40 or
-----------
in such other form as the Agent has consented to.
8.2. AMD Saxonia undertakes that, in the event of any material deterioration
of the security as a whole, in particular as a result of reduction in
value and/or loss, it will on the request of the Agent grant additional
security or repay the Facilities accordingly. AMD Saxonia undertakes to
charge real property which is not presently charged or which is acquired
in the future if the same is or intended to be used for operational
purposes.
8.3 If AMD Saxonia is of the opinion that the realisable value of the
security as a whole (with the exception of the 65/35 Guaranty) exceeds
at any time by a material amount the total outstanding claims of the
Banks under this Agreement, otherwise than temporarily, AMD Saxonia may
by notice to the Security Agent, including supporting material, require
the release of security. The Security Agent will pass a copy of such
notice to the Guarantors for their comment.
Following receipt of the Guarantors' comments, the Security Agent and
the Banks will
28
release security to the extent a material over-collateralisation has
been adequately demonstrated.
The Security Agent shall be obliged to agree to a release if and to the
extent that the realisable value as determined in accordance with the
individual Security Documents of all Security provided by AMD Saxonia
exceeds 120% of the secured claims of the Banks other than temporarily.
The choice of the securities released shall be at the discretion of the
Security Agent and of the Banks, as the case may be.
8.4 In the event that the Banks are entitled to terminate the Facilities
pursuant to (S)21 of this Agreement, AMD Saxonia hereby authorises the
Agent, on behalf of the Banks, to satisfy on its behalf all obligations
of, and to discharge all claims against it (including those arising
under extended retention of title clauses), at the expense of AMD
Saxonia. AMD Saxonia waives its rights pursuant to (S)267 II BGB and
undertakes to reimburse the Agent promptly after request by the Agent
all reasonable costs and expenses which the Agent may have incurred in
connection with the exercise of its rights to satisfy obligations and
discharge claims as aforesaid.
(S)9
ILLEGALITY
If it becomes illegal or unlawful pursuant to domestic or foreign legislation or
it becomes contrary to any requirement of any domestic or foreign authority or
public body for any Bank to comply with its outstanding obligations - in whole
or in part - under this Agreement such Bank may immediately after it has become
aware thereof inform AMD Saxonia through the Agent. After receipt of such
notification, the Facilities made available by the relevant Bank affected by the
illegality or unlawfulness shall be cancelled without notice or on such
reasonable notice as may be determined by the relevant Bank and specified in the
notification referred to, as the case may be. In such case, AMD Saxonia shall
repay to the Paying Agent for distribution to the relevant Bank all outstanding
amounts under the affected Facilities at the date such notice becomes effective,
together with accrued interest and all other amounts due at the date of such
notice.
(S)10
MARKET DISRUPTION; ALTERNATIVE METHOD OF CALCULATION
10.1 The Paying Agent shall immediately notify AMD Saxonia and the Banks if
any of the following events occur in relation to any interest period:
(i) the Paying Agent, after consultation with the Reference Banks,
determines that due to circumstances affecting the London interbank
market, the LIBOR rate or the reference rate cannot be adequately
and reasonably determined; or
(ii) in the case of a LIBOR rate, no interest rate for the relevant
interest period appears on the Telerate Monitor and less than two
(2) Reference Banks provide the Paying Agent with a LIBOR rate or
in the case of the reference rate, less than two Reference Banks
provide the Paying Agent with a reference rate; or
(iii) a majority of Banks, as determined pursuant to (S)22.5, inform the
Paying Agent (with a copy to the Agent) that in respect of the
relevant interest period no DM funds in the required amount are
available in the London interbank market or that the average of the
LIBOR-rates appearing on the Telerate Monitor do not
29
adequately reflect the cost to such Banks of making or maintaining
their respective participations in the relevant advance for such
interest period.
Following receipt of such notification no further advances may be made
until an alternative method of calculation pursuant to (S)10.2 is agreed
upon or such notice is revoked by further notification from the Paying
Agent to AMD Saxonia and the Banks.
10.2 As soon as notification pursuant to (S)10.1 has been made, AMD Saxonia
and the Paying Agent, in coordination with the Banks, will negotiate in
good faith for a maximum period of thirty days with a view to setting an
alternative method of refinancing the affected advances as well as the
applicable interest rate, the interest period and the payment dates. To
the extent that instead of a LIBOR rate, a reference rate can be
determined or instead of a reference rate, a LIBOR rate can be
determined, AMD Saxonia shall be entitled to require that the rate which
is available shall apply to the relevant advance. If agreement as to the
alternative interest rate is reached between the Banks and AMD, the
alternative calculation method agreed shall apply for all relevant
advances. If no agreement in respect of an alternative method of
calculation is achieved within thirty days and agreed upon in writing or
if AMD Saxonia does not require an alternative available Reference Rate
or LIBOR-Rate, the following shall apply:
(i) to the extent that the Facilities have not been drawn, no drawing
will be permitted. AMD Saxonia shall then be obliged to pay
immediately all amounts due to the Paying Agent for distribution to
the Banks pursuant to the terms of this Agreement;
(ii) to the extent that the Facilities have already been drawn, AMD
Saxonia and the Agent (in consultation with the Paying Agent) may
determine a repayment date for the entire outstanding amount of the
Facilities affected of not less than thirty days. Repayment shall
be effected on such day together with interest in an amount
equivalent to the costs of the Banks of making or maintaining their
respective participations in the relevant advance for such interest
period together with the margin to the Paying Agent for
distribution to the Banks. In the event that such costs of the
Banks cannot be determined, the applicable rate shall be determined
in accordance with (S)315 BGB.
(S)11
INCREASED COSTS
11.1 If a Bank or its Lending Office determines that the introduction of or a
change of any law applicable to it or change in interpretation of any
such law or the application or compliance with any regulation of any
public body results or will result:
(i) in the affected Bank being obliged to pay any tax or other payment
relating to any advance made by it or to any payment to be made by
AMD Saxonia to it, or
(ii) the affected Bank being subject to any other measure which leads to
an increase in the costs of that Bank in funding advances or that
the amount or the effective return in relation to any payment which
the affected Bank receives pursuant to this Agreement is reduced,
or
(iii) the affected Bank being subject to additional costs which arise
from its commitment under the Facility,
30
such Bank shall be entitled to inform AMD Saxonia through the Agent. AMD
Saxonia shall then be obliged on request and irrespective of whether
advances made are repaid to the affected Bank to pay such amount to the
Paying Agent for the account of the affected Bank as is demonstrated to
be necessary to compensate the affected Bank for the relevant increase
in costs or reduction of payment. The foregoing shall apply only to the
extent that the affected Bank has informed AMD Saxonia, via the Agent,
of the relevant circumstance in respect of paragraphs (i) to (iii).
11.2 An increase in costs or reduction of payment referred to in (S)11.1 does
not include:
(i) any tax on overall net income of any Bank or a branch thereof;
(ii) any tax required to be deducted or withheld from any amount payable
by AMD Saxonia which AMD Saxonia has paid in accordance with (S)13;
(iii) any amount relating to any reserve amount, special deposits,
equity, cost ratio, liquidity or capital adequacy requirement or
any other form of banking or monetary control resulting from any
law or regulation in effect at the date of this Agreement.
11.3 For as long as the circumstances referred to in 11.1 above continue, AMD
Saxonia shall be entitled by written notice to the Paying Agent, with a
copy to the Agent, to repay all outstanding advances made by the
affected Bank on thirty days notice expiring at the end of an interest
period and to cancel the Facilities only as they relate to the affected
Bank.
(S)12
INDEMNITY
12.1 Without prejudice in particular to the provisions of (S)6.7, (S)7.5,
(S)10 and (S)11, AMD Saxonia shall be obliged to hold harmless from and
to indemnify each Bank and the Paying Agent on demand in respect of all
losses, obligations, damage, costs and expenses (including loss of
profit) under or arising out of this Agreement which are suffered by a
Bank or the Paying Agent as result of:
(i) the occurrence of circumstances which entitle the Banks to
terminate this Agreement or breach by AMD Saxonia of its
obligations under this Agreement;
(ii) the failure to draw down funds under the Facilities following a
Drawdown Notice;
(iii) any amounts prepaid otherwise than in accordance with the terms of
this Agreement (in particular also pursuant to (S)10 and (S)11).
12.2 The obligation to hold harmless and indemnify includes also all costs
and expenses which a Bank incurs as result of the redeployment of funds
which are obtained for the purposes of refinancing its commitment under
the Facilities as well as all interest, fees and costs which arise as a
result of the funding of the amounts not drawn.
12.3 The Paying Agent will maintain books of account in accordance with
customary banking practice which will at all relevant times record the
amounts owed by AMD Saxonia pursuant to this Agreement. In the event of
disputes or other questions in connection with this Agreement, the
contents of the Paying Agent's books of account as they relate to the
obligations of AMD Saxonia pursuant to this Agreement and the amount
thereof
31
shall be conclusive, save in the case of manifest error. AMD Saxonia's
ability to prove any error in the contents of such books of account
shall remain unaffected.
(S)13
NO DEDUCTIONS OR WITHHOLDINGS
13.1 All sums payable by AMD Saxonia under this Agreement shall be paid in
full without set off or withholding in respect of tax or other
deductions. The right to set off or the enforcement of any rights of
retention or other claims is hereby excluded. To the extent that AMD
Saxonia or a third party is obliged by law to make deductions or
withholdings or to retain money for tax or other reasons, AMD Saxonia
shall be obliged to make a payment of the difference together with the
relevant amount in such additional amount as will ensure that the
relevant Bank or the Paying Agent (as applicable) receives the full
amount which would otherwise have been received by it if the relevant
deduction or withholding had not been made. AMD Saxonia shall be obliged
to furnish the Paying Agent, with a copy to the Agent, immediately with
copies of all the relevant documents confirming that the amount deducted
or withheld has been paid to the relevant tax or other authority in the
full amount.
13.2 If AMD Saxonia becomes aware that deductions or withholdings within the
meaning of 13.1 are required, AMD Saxonia shall notify the Paying Agent,
with a copy to the Agent, immediately giving details and information
relating to the relevant regulations.
13.3 If any Bank receives the benefit of a tax credit or a relief or
remission of tax resulting from the receipt of any additional amount
under (S)13.1 such Bank shall promptly reimburse to AMD Saxonia such
part of that benefit as will leave such Bank after such payment in no
more and no less favourable a position than would have applied if no
such benefit or relief had been received. The relevant Bank shall be
obliged to take all reasonable steps to claim such credit, relief or
remission from or against its tax liabilities even if this results in an
obligation to make a reimbursement to AMD Saxonia. The Banks shall not,
however, be obliged to permit AMD Saxonia to inspect its books in
connection with the obligation referred to above nor to take any
particular steps in relation to their tax affairs.
13.4 No additional amount will be payable to a Bank under (S)13.1 to the
extent that such additional amount becomes payable as a result only of a
change in the Lending Office of the relevant Bank, unless (i) such
change is requested by AMD Saxonia, or (ii) under the relevant laws,
regulations, treaties or rules in effect at the time of the change in
Lending Office, such additional amount would not have been payable.
13.5 If AMD Saxonia is obliged to pay an additional amount under (S)13.1, AMD
Saxonia may prepay in whole (but not in part) (without prejudice to
(S)12.1) the amount made available to it under this Agreement by the
affected Bank, on AMD Saxonia giving not less than five Banking Days'
prior written notice to the Paying Agent (with a copy to the Agent) and
the affected Bank, provided that such notice is given within thirty (30)
days of AMD Saxonia becoming aware that it would be obliged to pay such
amount; prepayments under this (S)13.5 shall not be permitted after the
expiry of such period. The liability of such Bank to make any further
advances available to AMD Saxonia shall be cancelled on the giving of
such notice.
32
(S)14
CONTINUITY CLAUSE
European Economic and Monetary Union anticipates the introduction of a single
currency and the substitution of the national currencies of Member States
participating in such 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 such 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 such Monetary Union shall give rise to any right to terminate
prematurely, contest, cancel, rescind, modify, or renegotiate this Agreement or
any of its provisions or to raise any other objections and/or exceptions or to
assert any claims for compensation. This Agreement shall continue in full force
and effect in accordance with its terms; in particular, interest rates which
have been set for an interest period shall remain unchanged for such interest
period, subject to any mandatory provisions.
(S)15
REPRESENTATIONS AND WARRANTIES
15.1 AMD Saxonia represents and warrants to the Banks as follows:
15.1.1 each of AMD Saxonia and AMD Holding is a duly organised and existing
company under the laws of the Federal Republic of Germany;
15.1.2 each of AMD Saxonia and AMD Holding have taken all necessary steps and
obtained all necessary consents to enter into legally binding
obligations pursuant to the Operative Documents and the Security
Documents and to exercise its respective rights thereunder;
15.1.3 the certified Commercial Registry extracts furnished to the Agent and
the notarially certified articles of association of AMD Saxonia and AMD
Holding and the other documents to be furnished pursuant to (S)16.5
reflect in all respects the actual position existing on the date
furnished to the Agent;
15.1.4 the execution of the Operative Documents by AMD Saxonia, AMD Holding and
AMD Inc. and the compliance by each of them of their obligations
thereunder and the exercise by each of them of their rights thereunder:
(i) do not violate any provision of applicable law, any judgment or any
requirements or any approvals of any authority or the like or
contractual obligations applicable to them or any other
obligations;
(ii) will not result in the termination or acceleration of any of their
other respective obligations;
(iii) will not result in an obligation of any of them to create or grant
any security in favour of any third party, save as contemplated in
the Security Documents or in this Agreement.
15.1.5 All Operative Documents entered into by the AMD Companies constitute the
legally valid and binding obligations of AMD Saxonia, AMD Holding and/or
AMD Inc., respectively,
33
enforceable in accordance with their terms, subject, however, to the
Opinion Reservations. For this purpose, "Opinion Reservations" means
limitations on the enforceability of legal documents dictated by German
law or the law of the United States of America or one of its states and
used as qualifications in legal opinions delivered to and accepted by
the Agent pursuant to (S)5.1.11. The granting of the security pursuant
to (S)8.1.1 to (S)8.1.19 (inclusive) will be effective to grant to the
Security Agent and / or the Banks a first priority security interest in
each case, subject to retentions of title permitted in accordance with
this Agreement. At the date of entering into this Agreement, AMD Saxonia
does not own any real property, save for the real property referred to
in (S)8.1.6.
15.1.6 The audited consolidated financial statements of AMD Holding and the
audited financial statements of AMD Saxonia each as at 31 December 1996
which have been furnished to the Agent, together with the relevant cash
flow statements as at such date were, and the financial statements to be
delivered pursuant to (S)16.2.1 will be, prepared in accordance with
generally accepted accounting principles consistently applied; in
accordance with these principles they fairly represent, and, in the case
of the financial statements to be delivered pursuant to (S)16.2.1, will
fairly represent, the consolidated financial position of AMD Holding and
AMD Saxonia respectively without qualification and make provision for
all material indebtedness and other liabilities, actual or contingent,
of AMD Holding and AMD Saxonia save to the extent set out in Schedule
--------
15. Since their respective dates of incorporation, there has been no
--
material adverse change in the business or financial position of AMD
Saxonia and AMD Holding.
15.1.7 The audited financial statements of AMD Saxonia to be delivered in
accordance with (S)5.1.8 (iii) and (S)16.2.2 were prepared in accordance
with generally accepted accounting principles consistently applied. They
are in accordance with those principles, true and accurate in all
material respects and fairly represent the financial position of AMD
Saxonia without qualification; in particular, provision has been made
for all material indebtednes and all other liabilities, actual or
contingent. Since the date of the latest audited accounts there has been
no material adverse change in the business or financial position of AMD
Saxonia.
15.1.8 There are no actions, suits, proceedings, claims or disputes or
administrative proceedings pending or threatened against AMD Saxonia or
AMD Holding or the assets or other sources of income of AMD Saxonia or
AMD Holding which if an unfavourable outcome was reasonably probable,
could reasonably be expected to have a material adverse effect on the
financial position of AMD Saxonia or AMD Holding.
15.1.9 To the best of its knowledge and belief, no Event of Default in relation
to any of the Operative Documents exists at the time of entering into
this Agreement.
15.1.10 Neither AMD Holding nor AMD Saxonia is insolvent or incapable of paying
its debts as they fall due; neither is in liquidation and no steps have
been commenced for the dissolution of either of them.
15.1.11 AMD Saxonia is a wholly owned and the only subsidiary of AMD Holding
which is, in turn, a wholly owned subsidiary of AMD Inc.
15.1.12 The ordinary share capital of AMD Holding has been paid up in full and
the stated ordinary share capital of AMD Saxonia has been paid up in
accordance with the provisions of the Sponsors' Support Agreement; there
have been no repayments of capital. AMD Saxonia has no other equity
participations.
34
15.1.13 AMD Holding and AMD Saxonia are "Unrestricted Subsidiaries" and not
"Restricted Subsidiaries" within the meaning of the Advanced Micro
Devices Inc. 11% Senior Secured Note Indenture dated 1 August 1996
between AMD Inc. and the United States Trust Company of New York or the
Credit Agreement of 9 July 1996 between AMD Inc. and the Bank of
America National Trust and Savings Association.
15.1.14 The assets and rights of AMD Saxonia and AMD Holding are not subject to
encumbrances nor has any security been granted in favour of third
parties in respect thereof save in respect of customary retention of
title in favour of suppliers agreed in the ordinary course of business.
No agreements with respect to extended or prolonged retention of title
nor current account or group retention of title agreements have been
concluded with material suppliers.
15.1.15 The operation and assets of AMD Holding and AMD Saxonia are fully
insured against all risks customarily insured against by similar
businesses and on similar terms. All insurances have been entered into
with first class reputable insurance companies which are not affiliates
of AMD Inc. The insurances in force from time to time in accordance
with the progress of the Project will at a minimum satisfy the
requirements set out in (S)17.8 and Schedule 22.
-----------
15.1.16 AMD Saxonia and AMD Holding have submitted all necessary tax filings
within a reasonable time of the relevant due date and in any event
before penalties attach thereto. Neither AMD Saxonia nor AMD Holding is
in default in relation to the payment of any tax claims or any other
public law claims, other than those referred to in (S)15.1.17, which
are due except for these which are being contested in good faith by
appropriate proceedings and for which proper provision has been made in
accordance with German generally accepted accounting principles. There
is no proposed tax assessment against AMD Saxonia or AMD Holding which
would, if made, have a material adverse effect on the financial
position of AMD Holding or AMD Saxonia.
15.1.17 All governmental or public law approvals, consents and measures
(including those from the European Union) necessary for the proper
implementation of the Project and the compliance by AMD Saxonia and AMD
Holding of their obligations pursuant to the Operative Documents
including in particular all such approvals, consents and measures
necessary to ensure the legally binding nature of all governmental
subsidies and grants in connection with the Project have been obtained,
save for those set out in Part B to Schedule 20 and there are no
-----------
grounds to believe that they could be revoked or cancelled or made
subject to material restrictions.
15.1.18 All governmental or public law approvals, consents and measures set out
in Part A of Schedule 20 have been obtained or taken and there is no
-----------
reason to believe that (i) the same would be revoked, cancelled,
limited or made subject to conditions of a material adverse nature nor
that (ii) the governmental approvals consents and measures set out in
Part B of Schedule 20 will not ultimately be available on a timely
-----------
basis.
15.1.19 The business of AMD Saxonia and AMD Holding is not subject to any
unusual limitations of a material nature which might affect compliance
by them of their obligations pursuant to the Operative Documents.
15.1.20 Neither AMD Saxonia nor AMD Holding has engaged in any business or
operation or incurred liabilities save in connection with their
incorporation, the Project and the Operative Documents.
35
15.1.21 The factual information furnished by AMD Saxonia or AMD Holding to the
Agent or to the Banks in connection with any of the Operative Documents
or the subject matter thereof (including the Information Memorandum
dated September 1996) is true and accurate in all material respects and
have not become misleading as a result of the omission of any material
fact. All assumptions, estimates and projections contained therein have
been made with due care and attention.
15.1.22 AMD Saxonia has not entered into any Material Equipment Supply
Contracts or Material Service Contracts other than those notified to
the Agent in writing, together with copies of the relevant contract or
orders.
15.2 The above representations and warranties (with the exception of the
representation in (S)15.1.4) shall be deemed repeated in full on the
date of each Drawdown Notice, on the completion of each Project Phase
pursuant to the Project Schedule, and each submission of AMD Saxonia's
annual financial statements by reference to the facts and circumstances
then existing.
(S)16
REPORTING AND INFORMATION REQUIREMENTS
16.1 AMD Saxonia will as soon as possible and in any event within five
Banking Days after becoming aware thereof inform the Agent of the
occurrence of an Event of Default within the meaning of (S)21 or any
other Event of Default which in the reasonable opinion of an experienced
third party would affect the legal or risk position of the Banks under
this Agreement in a manner which is more than immaterial by notice in
writing setting out the relevant circumstances and describing the
measures within its powers which AMD Saxonia proposes to take in
relation thereto.
16.2 AMD Saxonia undertakes to keep the Agent regularly informed of its
financial affairs during the term of the Facilities. In particular, it
is agreed as follows:
16.2.1 AMD Saxonia will as soon as possible and in any event within sixty (60)
days of the end of each quarter of each financial year or, in the case
of the last quarter of a financial year, within ninety (90) days of such
quarter, furnish the Agent with (i) quarterly financial statements
(balance sheet and profit and loss statement as well as a cash flow
statement) for the relevant quarter and the period of the four preceding
financial quarters including a comparative statement for the four
financial quarters preceding such period together with (ii) a
certificate of compliance in respect of the financial covenants as set
out in Schedule 18, in each case in a form reasonably satisfactory to
-----------
the Agent. The quarterly financial statements to be delivered hereunder
shall be prepared in accordance with generally accepted accounting
principles applicable in Germany as consistently applied.
16.2.2 AMD Saxonia will as soon as possible and at the latest within ninety
(90) days after the end of each financial year furnish to the Agent
audited financial statements prepared by the Auditor confirming that the
financial statements are unqualified and including notes to the
statements and a management report, together with an audited cash flow
statement including comparative figures for the preceding financial year
and an updated Management Plan. At the same time, AMD Saxonia will
furnish the Agent with confirmation of the Auditor that the quarterly
financial statements furnished at the end of a financial quarter
correspond with the audited annual financial statements and AMD
Saxonia's books of account (including a reconciliation statement) and
whether the financial covenants set out in Schedule 17 have been
-----------
properly calculated and have been
36
complied with in the relevant financial year, together with a
confirmation in accordance with (S)15.2.
16.2.3 AMD Saxonia will furnish to the Agent, simultaneously with the annual
financial statements and other documents pursuant to (S)16.2.1 and
(S)16.2.2 written confirmation that as at the end of the relevant
balance sheet date no Event of Default within the meaning of (S)21.2 has
occurred or, alternatively, which events have lead to such an Event of
Default during the relevant balance sheet period. If such Event of
Default has occurred, written notice thereof in accordance with (S)16.1
shall be given to the Agent, together with written confirmation that,
except as stated therein, to AMD Saxonia's knowledge no other Events of
Default have occurred.
16.2.4 AMD Saxonia will furnish to the Agent immediately after receipt all
reports and similar documents prepared by the auditors or other
independent firms of accountants and which relate to audits undertaken
as of the end of a financial year or any interim audits.
16.2.5 AMD Saxonia will furnish to the Agent promptly after receipt the
Requirement Forecasts, Annual Pricing Compliance Certificates, the
Quarterly Pricing Compliance Certificates and the Pari Passu Compliance
Certificate, each as referred to in the AMD Saxonia Wafer Purchase
Agreement as well as, at the request of the Agent, all other reports,
statements, notifications and documents produced in accordance with the
AMD Saxonia Wafer Purchase Agreement.
16.2.6 AMD Saxonia will furnish to the Agent within ten (10) Banking Days after
the end of each calendar month a status report relating to the progress
of construction in the form set out in Schedule 8 as well as a Statement
----------
as to the Use and Source of Funds in accordance with Schedule 16 within
-----------
ten (10) Banking Days after the end of each quarter and within ten (10)
Banking Days after the end of each Project Phase.
16.3 AMD Saxonia will inform the Agent promptly in writing in the event that
production in the Fabrication Facility or research activity in the
Design Center is not undertaken at any time after first commercial
shipment of Products (as defined pursuant to clause 3.09 of the AMD
Saxonia Wafer Purchase Agreement) for a period of more than five (5)
successive days or if legal administrative or arbitration proceedings
are instituted or threatened against AMD Saxonia or AMD Holding which
may have a material adverse affect on the assets or ability of AMD
Saxonia or AMD Holding to comply with its obligations under the
Operative Documents.
16.4 AMD Saxonia will inform and keep the Agent informed in a reasonable
manner of all circumstances relating to the operations of AMD Saxonia
and its other activities as well as its economic situation to the extent
required by the Agent or any Bank or to the extent the same may have a
material adverse effect on AMD Saxonia's financial position or the
viability of the Project. This obligation also applies to circumstances
affecting any affiliate of AMD Saxonia and which may materially
adversely affect the operations or other activities or economic position
of AMD Saxonia or the assets which are the subject matter of the
Security Documents..
16.5 On any change to the Commercial or Land Registry extracts furnished to
the Agent, AMD Saxonia will promptly inform the Agent of the relevant
event by providing copies of the documents to be filed with the
Commercial or Land Registry and, following filing, AMD Saxonia will
provide the Agent with certified copies of the new extracts.
37
(S)17
COVENANTS
17.1 If at any time the Agent determines that the Actual Selling Price Per
Wafer (as defined in the AMD Saxonia Wafer Purchase Agreement) has for
any period of three consecutive calendar quarters, been substantially
lower than the Adjusted Selling Price Per Wafer (as defined in the AMD
Saxonia Wafer Purchase Agreement), the Agent may request the Banks'
Auditor to review the Actual Selling Price Per Wafer (as so defined) for
the period in question. If following such review, the Banks' Auditor
determines that an adjustment to the Actual Selling Price Per Wafer (as
so defined) is necessary according to the AMD Saxonia Wafer Purchase
Agreement, the Agent shall notify AMD Saxonia, in writing of such
adjustment (giving reasonable details of the calculation) and of the
Actual Selling Price Per Wafer (as so defined) to be utilised for the
purposes of Section 3.02 (f) of the AMD Saxonia Wafer Purchase
----------------
Agreement. AMD Saxonia undertakes, immediately following receipt of any
such notification to notify AMD Holding and AMD Inc. thereof pursuant to
Section 3.02 (f) of the AMD Saxonia Wafer Purchase Agreement and to
----------------
insist upon such adjustment.
17.2 AMD Saxonia will comply in all material respects with all relevant laws
and other regulations and administrative directives applicable to it and
will on a timely basis comply with all reasonable requirements of the
fiscal authorities.
17.3 AMD Saxonia will at all times promptly enforce to the full extent
reasonable all its rights under the Operative Documents and at the
Agent's request will take all reasonable steps to so do. AMD Saxonia
hereby irrevocably appoints the Agent to take all measures and to enter
into all undertakings which the Agent regards as necessary following the
occurrence of an event which entitles the Banks to terminate this
Agreement.
17.4 AMD Saxonia undertakes to complete the Project in accordance with:
(i) the timetable contained in the Project Schedule (save that the
completion date of any Project Phase (other than last) may be
deferred for up to six (6) months in aggregate for all such
deferrals) provided that Completion shall be no later than 30
December 2001; and
(ii) the Plans and Specifications.
17.5 AMD Saxonia will on a timely basis and to the full extent comply with
its obligations pursuant to the Operative Documents and particular, take
all steps to enable AMD Inc. and/or AMD Holding to comply with its
respective obligations under the Sponsors' Support Agreement, in
particular in connection with the increase of AMD Saxonia's ordinary
share capital as well as the contribution of other equity capital by the
Sponsors. If AMD Saxonia intends not to comply with its obligations
pursuant to the Operative Documents it will immediately inform the Agent
thereof in writing.
17.6 AMD Saxonia will permit the Agent, the Banks' Auditor and the Technical
Advisor as well as all other advisors of the Agent who are bound by a
professional duty of confidence at all reasonable times to inspect its
properties and to examine the financial and other records of AMD Saxonia
and to discuss the affairs of AMD Saxonia and AMD Holding to the extent
relevant to this Agreement and the risk position of the Banks hereunder
with the management and competent employees. AMD Saxonia will provide
unrestricted access to its relevant records and those of AMD Holding and
make available a reasonable number of copies thereof at reasonable
request. All such inspections and
38
examinations shall be performed in such manner as not to unreasonably
disrupt AMD Saxonia's normal business operations and its manufacture of
the products described in the preamble to this Agreement.
17.7 AMD Saxonia will at all times maintain proper books of account and
prepare its records in accordance with general accepted book keeping and
accounting principles in Germany as consistently applied. The balance
sheet assumptions will be applied consistently by reference to generally
accepted valuation principles.
17.8 AMD Saxonia will at all times maintain insurance which in type (all
buildings, machines, other equipment, stock , business interruption,
third party liability and the like), scope and amount is at least equal
to the insurance cover of a comparable business and which, in addition,
satisfies the requirements of the Operative Documents. In particular,
AMD Saxonia undertakes to maintain the insurances referred to in
Schedule 22 in the scope and on the terms and conditions therein
-----------
referred to. The persons referred to in Schedule 22 shall be named in
-----------
all contracts of insurance as an additional insured and the Security
Agent as "loss payee" in accordance with Schedule 22. At the end of each
-----------
financial year, AMD Saxonia will furnish to the Agent a complete list of
the above insurances for the next succeeding financial year giving the
details referred to in Schedule 22 together with confirmation from its
-----------
insurance brokers and the Insurance Advisor that AMD's insurance cover
complies with the said requirements.
17.9 AMD Saxonia will construct the Plant and the Design Center in such a way
as will ensure that the Plans and Specifications are complied with.
17.10 AMD Saxonia will at all times ensure that it has obtained and/or taken
and will maintain and/or take on a timely basis all necessary
governmental approvals, permits and measures required for performance by
it of its obligations under the Operative Documents to which it is
party.
17.11 AMD Saxonia will make payment of all fees and other amounts due in
connection with the 65/35 Guaranty promptly. The Guarantors through
their authorised representatives, C&L Deutsche Revision AG, Dhsseldorf,
are entitled to payment of one-off and regular fees together with
commitment fees and processing fees in connection with the 65/35
Guaranty in accordance with the following provisions (as a genuine
contract for the direct benefit of third parties):
(i) AMD Saxonia shall after acceptance, and for the duration, of the
65/35 Guaranty pay the following guaranty fees:
- on the issue of the guaranty commitment, 0.25 % of the maximum
guaranty amount in relation to the guaranteed indebtedness,
whereby the calculation of the fee will be determined in
accordance with the drawdowns (in accordance with Section 5 of
the Guaranty Decision) so that the fee due on the issue of the
documents relating the Guaranty Decision are calculated only
by reference to the first drawdown and the first fees due in
respect of the following drawdowns are due when such drawdowns
are included in the terms of the Guaranty and/or in the case
of special guaranty issues on the issue of the Guaranty.
- following the issue of the guaranty, on 1 April and 1 October
of each year in respect of each half year commencing on such
dates, 0.25 % of the Guaranty amount outstanding at such times
(the maximum amount
39
referred to in the Guaranty in respect of the guaranteed
indebtedness less payments of principal).
(ii) AMD Saxonia undertakes to pay the following amounts to the
Guarantors, in the event that the Guarantors shall so request:
- on any extension of the guaranty commitment, a commitment fee
up to an amount of 0.25 % of the extended guaranty commitment,
- in the event of material amendments to a guaranty which has
been approved but not yet issued, a processing fee in an
amount of up to DM 25,000;
(iii) the processing fee for material amendments to an approved but
unissued guaranty is payable to C&L Deutsche Revision AG,
Dusseldorf to its Account No. 31 308 12, Westdeutsche Landesbank
Girozentrale, Dusseldorf. Other current fees together with the
commitment fee are payable to C&L Treuarbeit Deutsche Revision AG,
Dusseldorf to their trust account "Bundesminister der Finanzen"
Account No.: 30 151 12 at Westdeutsche Landesbank Girozentrale,
Dusseldorf quoting the reference number of the guaranty.
17.12 AMD Saxonia undertakes to comply with and to fulfill all covenants and
other ancillary requirements applicable to it in connection with the
grant of the subsidies. This obligation applies in particular to
covenants and ancillary requirements which are dealt with in the SAB/
Dresdner Subsidy Agreement and the AMD/Dresdner Subsidy Agreement
together with the schedules to these documents. AMD Saxonia also
undertakes to ensure that AMD Companies undertake all steps applicable
to them under the covenants and other ancillary requirements in
connection with the subsidies. AMD Saxonia undertakes furthermore to
ensure that all obligations undertaken by it in connection with the
granting of other state aid (in particular investment allowances) are
fulfilled.
17.13 AMD Saxonia undertakes to enter into the Equipment Supply Contracts and
Service Supply Contracts in accordance with the timetable set out in the
Project Schedule and to ensure that equipment or goods delivered
pursuant thereto are subject to retention of title only to the extent
customary and in the ordinary course of business. AMD Saxonia will use
its best endeavours to ensure that retention of title arrangements are
not entered into with material suppliers and in any event that no
current account, group or extended or prolonged retention of title
agreements are entered into. The Equipment Supply Contracts entered into
by AMD Saxonia shall not in the aggregate require the making of advance
payments by AMD Saxonia in excess of an aggregate amount of DM
20,000,000.
17.14 AMD Saxonia undertakes to hedge at least 50% of all variable interest
rate advances with interest rate caps with the Agent or other Banks and
to inform the Paying Agent thereof. All rights arising out of contracts
entered into by AMD Saxonia to hedge interest rate shall be assigned to
the Security Agent in accordance with the Global Assignment in the form
set out in Schedule 47; to the extent an assignment is not possible, the
-----------
Banks shall be granted other appropriate security rights.
17.15 AMD Saxonia undertakes that, until satisfaction in full of all claims of
the Banks under this Agreement, it will not, without the consent of the
Agent and, in the case of (ii), (v), (ix) and (x) without the consent of
the Guarantors:
40
(i) grant in favour of third parties any security as security for its
own obligations or those of a third party save as contemplated or
permitted by the Operative Documents and save for customary
retention of title rights in favour of suppliers permitted pursuant
to (S)17.13. AMD Saxonia's right to further encumber real property
already subject to land charges in favour of the Banks shall remain
unaffected ((S)1136 BGB);
(ii) incur indebtedness for borrowed money or incur liabilities save for
such liabilities contemplated in the Operative Documents and
liabilities in the ordinary course of business;
(iii) save in respect of the lease agreement in respect of premises at
Washingtonstrasse 16 A/B, 01139 Dresden, dated 7/13.08.1996 entered
into with Siemens Technopark GmbH Dresden & Co.
Grundstucksverwaltung OHG or any extension thereof, incur any other
obligations as lessee, save to the extent that such obligations
arise under short term agreements entered into in the ordinary
course business in connection with the operation of the Fabrication
Facility and of the Design Center and do not exceed in aggregate
more than DM 10,000,000;
(iv) establish any subsidiaries or acquire interests in any other
undertakings or enter into any merger agreements;
(v) dispose of any assets or rights and/or remove such assets from the
location of the Fabrication Facility and the Design Center save to
the extent (a) contemplated by and permitted in the Operative
Documents (b) the disposal is of assets promptly replaced by assets
of at least equivalent value in the ordinary course of business or
(c) the aggregate value of which does not exceed DM 3,000,000 in
any calendar year;
(vi) make any loans to or deposit funds with any third party, purchase
or acquire securities or other financial instruments, save to the
extent the same:
(a) are assets held in the bank accounts charged pursuant to (S)8 or
such other accounts opened with the consent of the Agent, which are
charged to the Banks,
(b) constitute trade credit,
(c) constitute the payment of amounts due under the AMD Saxonia Wafer
Purchase Agreement in respect of deliveries thereunder, or
(d) are bona fide employee loans which are in aggregate not in excess
of DM 5,000,000, or
(e) relate to the payment of amounts in respect of AMD Saxonia's stated
capital which shall be transferred promptly to a Project Account
pursuant to (S)19.4,
(vii) make any payments of dividends or other repayment of capital to AMD
Holding or to make any other payment AMD Inc. or to any affiliate
of AMD Inc., save to the extent such payments are permitted
pursuant to Section 3 of
41
the Sponsors' Subordination Agreement, in the form set out in
Schedule 30 or Sections 4.4 or 6.3 of the Sponsors' Support
-----------
Agreement;
(viii) make payments pursuant to the Operative Documents (and, in
particular, not to make any repayment of interest or principal on
the Sponsors' Loan) save in accordance with the terms of such
Operative Documents;
(ix) undertake only business compatible with the purpose set out in the
first paragraph of the preamble to this Agreement;
(x) incur any expenditure (including Capital Expenditure) which is not
of the type contemplated in the Operative Documents and which is
not incurred in the ordinary course of business;
(xi) terminate or amend any of the Operative Documents, save for
(a) Equipment Supply Contracts which are not Material Equipment
Supply Contracts;
(b) Service Contracts which are not Material Service Contracts;
(c) amendments to the agreement set out in Schedule 39
-----------
(Design/Build Agreement), the Material Equipment Supply
Contracts, the Material Service Contracts and the Plans and
Specifications which adversely affect the value of the
Project, the Fabrication Plant and the Design Center or their
purpose, or the production capacity or other characteristics
required or agreed in the AMD Saxonia Wafer Purchase Agreement
in a manner which is immaterial only and which are in
accordance with the Project Budget and the Project Schedule
are however permitted without the consent of the Banks.;
(d) the Project Budget and the Project Schedule which may be
amended in accordance with the provisions of (S)18.
(xii) agree to any changes to the articles of incorporation of AMD
Saxonia, in particular changes of its fiscal year, or grant any
general powers of attorney with respect to the business of AMD
Saxonia except as otherwise permitted in the Operative Documents;
(xiii) enter into any agreement compliance with which would be contrary to
any of the obligations of AMD Saxonia pursuant to the Operative
Documents;
(xiv) amend the contracts with the Project Manager which have been
furnished to the Agent or enter into other contracts with the
Project Manager;
(xv) at any time during the currency of this Agreement manufacture in
any quarter microchip silicon wafers containing microprocessors
other than general purpose microprocessors and related products in
such number as would, prior to Completion, be in excess of 25% or
after Completion, be in excess of 35 % of all wafers produced by
AMD Saxonia during the relevant quarter.
17.16 AMD Saxonia undertakes until the satisfaction in full of all claims of
the Banks under this Agreement to ensure that the financial covenants
set out in Schedule 17 are complied
-----------
42
with at all times and/or to the extent AMD Saxonia has no direct
influence on compliance with such financial covenants, to use its best
endeavours to ensure that they are so complied with.
17.17 AMD Saxonia undertakes to keep and maintain its fixed and current assets
exclusively within the area of the Plant and Design Center shown in
Schedules 44 and 45.
------------ --
17.18 AMD Saxonia undertakes to prepare on a best efforts basis the estimates
to be prepared in accordance with Section 3.02 of the AMD Saxonia Wafer
Purchase Agreement by reference to the information from all available
sources.
17.19 AMD Saxonia undertakes, as a genuine contract for the direct benefit of
third parties, to permit an examination at any time by the Guarantor or
an authorised representative of the Guarantor as to whether there is any
possibility of a claim being made pursuant to the 65/35 Guaranty or as
to whether circumstances exist or have existed which would make such a
claim possible. AMD Saxonia furthermore undertakes (as a genuine
contract for the direct benefit of third parties) to provide to the
Guarantors all information requested by them in connection with the
65/35 Guaranty. AMD Saxonia is aware that the examination and
information rights referred to above exist also in favour of the Banks,
however, only to the extent such documentation relates to the guaranteed
Facilities. AMD Saxonia hereby relieves and discharges the Banks from
their duty of confidentiality as against the Guarantors and their
authorised representatives, to the extent that the aforesaid rights in
favour of the Banks are exercised. AMD Saxonia undertakes, as a genuine
contract for the direct benefit of third parties, to bear the costs of
all examinations by the Guarantors referred to above.
17.20 AMD Saxonia will procure that at all times until Completion, a Project
Manager will be appointed who has the necessary qualifications in
respect of the duties of the Project Manager referred to in the
Operative Documents.
17.21 AMD Saxonia undertakes not to enter into any confidentiality and non-
competition undertakings with its employees, officers or contracting
parties other than in the form agreed with the Agent prior to entering
into this Agreement or save as may be otherwise agreed with the Agent.
17.22 AMD Saxonia will at the request of the Agent use its best endeavours to
obtain from any contracting parties a Consent and Agreement, to the
extent that such Consent and Agreement is not required to have been
already obtained, in accordance with this Agreement or the Security
Documents, in the form set out in Part II of Schedule 40 or such other
-----------
form as shall have been consented to by the Agent, if the Agent deems
the same to be necessary to ensure the unrestricted continuation of the
Project in the event of enforcement of its security and AMD Saxonia does
not demonstrate the contrary and will make an offer to the Agent
enabling it to assume the contract in accordance with the provisions of
(S)3 of the Security Document referred to in Schedule 49.
-----------
(S)18
PROJECT BUDGET; PROJECT SCHEDULE
18.1 The Project will be implemented pursuant to the Project Budget and the
Project Schedule.
43
18.2 Within fourteen (14) days after the end of each Project Phase described
in the Project Schedule, AMD Saxonia will furnish to the Agent the
Scheduled Project Phase Technical Completion Certificates signed by the
AMD Companies and the Technical Advisor in accordance with Schedules 9
-----------
and 10 together with a confirmation pursuant to (S)15.2. At the same
--
time, AMD Saxonia will furnish a Project Budget together with an updated
Management Plan approved by the Sponsors setting out all projected
future Capital Expenditure until Completion broken down in respect of
each relevant Project Phase together with the then anticipated Capital
Expenditure to Completion. AMD Saxonia will consult and agree with the
Agent on a timely basis any amendments or variations to the Project
Budget or the Project Schedule which it regards as necessary. Project
Budgets and Project Schedules amended with the consent of the Agent, who
may consult with the Technical Advisor, the Auditor and the Banks'
Auditors with regard thereto, shall be regarded as Project Budgets and
Project Schedules within the meaning of this Agreement.
(S)19
PROJECT ACCOUNTS
19.1 AMD Saxonia undertakes to ensure that - without prejudice to (S)17.15
(vi) (e) - all payments under the Operative Documents or otherwise in
connection with the Project which are made to it or to be paid by it are
effected only through one or more of the accounts maintained with the
Security Agent (such accounts together with the reserve account referred
to in (S)19.4 herein referred to as "Project Accounts").
19.2 Amounts standing to the credit of the Project Accounts other than the
Minimum Reserve Account in accordance with (S)19.4 may be used only in
the ordinary course of business, for the settlement of financing costs
and for the repayment of the Facilities and for the transfer of any
amount to the reserve account referred to in (S)19.4 and prior to
Completion only for the purpose of payment of Project Costs (including
Cost Overruns).
19.3 Cash standing to the credit of the Project Accounts may be invested in
the securities set out in Schedule 23 which shall be maintained in a
-----------
custody account maintained solely with the Security Agent forming part
of a Project Account or in other custody accounts opened with the
consent of the Agent and charged to the Banks.
19.4 If the credit standing to the account of the Project Accounts after 1
January, 1999 and before Completion, exceeds in the aggregate an amount
of DM 20,000,000, AMD Saxonia shall transfer all amounts in excess
thereof to a reserve account to be maintained with the Security Agent
until the amount standing to the credit of the reserve account reaches
an amount of DM 72,500,000 (Minimum Reserve Amount). After Completion,
AMD Saxonia shall be entitled to draw on the funds standing to the
credit of the aforesaid reserve account in accordance with the
provisions of the Operative Documents provided that the amount remaining
to the credit of the reserve account shall not be less than the amount
which is equal to the Minimum Reserve Amount multiplied by the
proportion which the outstanding amount of the Facilities bears to the
total amount drawn under the Facilities.
19.5 The Banks shall be entitled to set off any claims due against AMD
Saxonia against the amount standing to the credit of any of the Project
Accounts; it shall be sufficient for this purpose for the Agent to issue
a declaration of set off.
44
19.6 All credits and securities standing to the credit of the Project
Accounts shall be charged in favour of the Banks as security for their
claims under this Agreement pursuant to (S)8.
(S)20
CONSENT OF THE BANKS
20.1 In all cases in which AMD Saxonia requires the consent of the Agent, the
Security Agent or the Banks pursuant to the provisions of this
Agreement, the Agent, the Security Agent and/or the Banks shall be
entitled to withhold their consent only if the legal or risk exposure of
the Banks would otherwise be affected in a manner which is material. In
this regard circumstances shall be regarded as material which relate, in
particular, to:
(i) the interests of the Banks in receiving payments under this
Agreement and the other Operative Documents in a timely and
complete manner or which would affect their ability to realise
sufficient proceeds from the realisation of security;
(ii) the shareholding structure of AMD Inc. AMD Holding and AMD Saxonia;
(iii) the obligations of the Sponsors pursuant to the Sponsors' Support
Agreement;
(iv) the viability of the Project by reference, in particular, to the
obligations of AMD Inc. under the AMD Holding Wafer Purchase
Agreement and the AMD Holding Research, Design and Development
Agreement in the form set out in Schedule 34 or AMD Holding under
-----------
the AMD Saxonia Wafer Purchase Agreement and the AMD Saxonia
Research, Design and Development Agreement in the form set out in
Schedule 36; and
-----------
(v) the compliance in full or the ability to comply with the conditions
of the Guaranty Decision, the 65/35 Guaranty and the AMD/Dresdner
Subsidy Agreement.
20.2 Each consent of the Banks shall be in writing. The parties agree that
the consent of the Banks shall not be deemed to have been given unless
expressly given in writing and that consents should be given on a timely
basis taking into account the interests of AMD Saxonia and the other
Banks. The Agent shall be authorised to give such consent unless such
consent relates to the duties of the Paying Agent. In such case, the
Paying Agent may give such consent.
(S)21
TERMINATION OF THE FACILITIES BY THE BANKS
21.1 The Banks shall be entitled to terminate the Facilities for good cause,
in whole or in part, and without notice or subject to such notice as
they may determine and,
(i) to refuse to make available to AMD Saxonia advances under the
Facilities and/or
(ii) to require the immediate repayment of all outstanding advances
together with accrued interest and other fees and amounts payable
by AMD Saxonia pursuant to this Agreement and/or
45
(iii) to require the payment of damages including any loss of profit
pursuant to (S)12 which the Banks may suffer following termination
between the time of termination and the expiry of the relevant
Interest Period and/or
(iv) to realise the security granted by AMD Saxonia,
21.2 There shall be good cause for termination within the meaning of the
aforesaid (S)21.1 and of (S)19 of the General Terms and Conditions of
the Agent, in particular, if any of the following events has occurred
and is continuing and if in the opinion of the Banks, exercising the
standard of care customary in commercial relations, the legal or risk
position of the Banks is materially adversely affected thereby:
(i) AMD Saxonia shall be in default in any payment of interest or
principal under this Agreement for more than three months;
(ii) the information provided by AMD Saxonia in respect of its financial
position is incorrect or incomplete in any material respect;
(iii) AMD Saxonia, AMD Inc. or AMD Holding ceases payment of its
creditors or composition, insolvency or similar proceedings are
applied for in respect of all of the assets of AMD Saxonia, AMD
Inc. or AMD Holding or a material part of the assets of AMD
Saxonia, AMD Inc. or AMD Holding are subject to mandatory
attachment - and which in the case of involuntary proceedings or
attachment against AMD Inc. have not been fully discharged within
60 days - or AMD Saxonia, AMD Inc. or AMD Holding enters into
negotiations with respect to any extra-judicial composition
proceedings;
(iv) AMD Saxonia, AMD Holding or AMD Inc. are in default of any payment
due to the Banks pursuant to the Sponsor's Support Agreement or any
other Operative Document for more than five (5) Banking Days
following receipt of written notice of default;
(v) the Facilities are not used for the purposes set out in (S)3;
(vi) any representation and warranty pursuant to (S)15 including any
deemed repetition thereof, was incorrect in any material respect at
the time it was given;
(vii) any condition precedent for utilisation of the Facilities pursuant
to (S)5 subsequently ceases to be complied with without the
previous consent of the Banks;
(viii) any of the obligations or covenants pursuant to (S)17 or 18 are
breached, whether or not as a result of action by AMD Saxonia, and
cannot be complied with or remedied or, to the extent the breach is
capable of remedy, the breach is not remedied within seven (7)
Banking Days after the Agent has given AMD Saxonia written notice
thereof; the Event of Default referred to in (xxv) shall remain
unaffected;
(ix) AMD Holding or AMD Inc. does not comply with any material provision
of the Sponsors' Support Agreement or of the other Operative
Documents to which it is a party and, to the extent, the breach is
capable of remedy, and, is not remedied within seven (7) Banking
Days after the Agent has given
46
written notice thereof; Articles I, III and VII and Sections 4.1,
6.2, 13.1 (a) to (f) and (e), 13.2., 13.3., 13.4 (a) to (h) and
13.5 of the Sponsors' Support Agreement shall without prejudice to
the generality of the foregoing be regarded as material;
(x) AMD Saxonia is in breach of any material provision of this
Agreement, the Security Documents, the AMD Saxonia Research, Design
and Development Agreement in the form set out in Schedule 36 or the
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AMD Saxonia Wafer Purchase Agreement;
(xi) any of the Operative Documents is or becomes invalid or
unenforceable or its validity or enforceability is challenged by
AMD Saxonia or any of the Sponsors;
(xii) receivership, composition or insolvency proceedings against the
assets of the contractor for the Fabrication Facility and the
Design Center or against a supplier are commenced or there is a
material adverse change in the financial position of such general
contractor or such supplier and any such event could reasonably be
expected to have a material adverse effect on the Project, unless
AMD Saxonia has cured the relevant event by entering into adequate
substitute arrangements satisfactory to the Agent within 45 days;
(xiii) a material adverse change in the financial condition of AMD
Saxonia, AMD Holding or AMD Inc., or AMD Inc. on a consolidated
basis, and as result there is likely to be a material adverse
effect on the Project;
(xiv) AMD Saxonia, AMD Holding or AMD Inc. are in default with any
payment obligation in favour of a third party in an aggregate
amount of more than DM 15,000,000;
(xv) the occurrence of an "Event of Default" within the meaning of the
Credit Agreement of 19 July 1996 between, inter alia, AMD Inc. and
Bank of America National Trust & Savings Association as
"Administrative Agent" or there is an "Event of Default" within the
meaning of the Indenture of 1 August 1996 between AMD Inc. and
United States Trust Company of New York as "trustee";
(xvi) any action under this Agreement requiring consent is undertaken
without the necessary consent unless the refusal to grant consent
is unlawful or in contravention of the terms of this Agreement;
(xvii) the insurances to be maintained pursuant to (S)17.8 are not
maintained in full force and effect;
(xviii) any material governmental approvals, consents or permits are not
granted, are revoked or are made subject to conditions or if any
governmental regulations or decrees are passed relating to the
Project which will prejudice the viability of the Project and which
are not either set aside by adequate action of AMD Saxonia to
discharge the effects of such regulations or decrees or if AMD
Saxonia has not suggested a course of action reasonably
satisfactory to the Agent within 30 days thereof;
47
(xix) any statement made to the Banks by AMD Saxonia, AMD Holding or AMD
Inc. in connection with the Project is inaccurate or incomplete in
any material respect to the extent that such statement is of
material significance for the viability of the Project or for the
compliance by AMD Saxonia, AMD Holding or AMD Inc. with its
obligations under the Operative Documents;
(xx) AMD Saxonia ceases to be a wholly owned subsidiary of AMD Holding
or AMD Holding ceases to be a wholly owned subsidiary of AMD Inc.
(xxi) AMD Saxonia's ordinary share capital is not fully paid in by 31
December 1997 in an amount of at least DM 217,500,000.-- or
subordinated shareholder loans or equity are or is, as the case may
be, not made available in accordance with the Sponsors' Support
Agreement.
(xxii) at any time, the sum of (a) the Capital Expenditure incurred by AMD
Saxonia at such time and (b) the amount, determined by the
Technical Advisor, from the relevant date of additional Capital
Expenditure necessary to achieve Completion ("Costs to Complete"),
exceeds an amount of DM 2.430.000.000,-- by more than 30% unless
AMD Inc. does not within 10 Banking Days after receipt of a
statement from the Technical Advisor relating thereto furnish
evidence in a form satisfactory to the Banks that AMD Saxonia has
or will have sufficient funds to finance Completion;
(xxiii) the terms or conditions of the 65/35 Guaranty or of the Guaranty
Decision or the Subsidy Agreement are not complied with or breached
or the 65/35 Guaranty is no longer available in full, or
investment or interest grants or investments subsidies or other
material state assistance is not available in the amount promised
and AMD Inc. does not make available compensation pursuant to the
Operative Documents,
AMD Saxonia, AMD Holding or AMD Inc. breaches the terms and
conditions of other state assistance material to the Project and as
a result thereof it is likely that the same will not be available
in their full amount or are revoked or cancelled;
(xxiv) payments are not made to the reserve account in accordance with
(S)19.4;
(xxv) the financial covenants set out in Schedule 17 (S)2 are not
-----------
complied with;
(xxvi) the Agent becomes aware that AMD Saxonia has breached any other
material contractual obligations;
(xxvii) other circumstances occur or become known which may prejudice the
ability of AMD Saxonia to repay the Facility;
(xxviii) the Agent has not received by 31 March 2000 written confirmation
from the Technical Advisor to the effect that the conditions
required for completion in the Technical Completion Certificate
(Technical Advisor) as set out in Schedule 10 can be satisfied
-----------
prior to 31 December 2000.
48
The Banks shall not be entitled to rely upon any of the aforesaid events if the
circumstances giving rise thereto have been remedied within ten (10) Banking
Days following receipt of written notice from the Agent. This shall not apply to
the events referred to in (i), (ii), (iii), (viii) (ix), (xii), (xiii), (xvi),
(xvii), (xix), (xx), (xxi), (xxiv), (xxv) above. The Agent will consult with the
Guarantors before terminating on the grounds of the Events of Default referred
to in (viii), (xiv), (xv) and (xxii). Termination on the grounds of the Event of
Default referred to in (xxv) is permitted only in agreement with the Guarantors.
(S)22
AGENCY PROVISIONS
22.1 The Banks have agreed to participate in the profits and risks of the
Facilities in the form of a disclosed consortium. Any joint and several
liability, the Banks is excluded; each Bank is liable only for the
relevant commitment undertaken by it pursuant to (S)2 and Schedule 1.
----------
Each Bank shall immediately inform the Agent in respect of any breach of
the Operative Documents of which it becomes aware. A corresponding
obligation shall apply to the Agent in the performance of its duties
pursuant to (S)22.3.
22.2 The Agent is acting on behalf of the Banks under this Agreement. The
Banks hereby appoint the Agent to act on their behalf as Agent in
relation to the rights and obligations of the Banks under this
Agreement, with exception of rights and obligations pursuant to (S)24,
and the other Operative Documents pursuant to the terms thereof under
the following terms and conditions. Each of the Banks hereby irrevocably
authorizes the Agent to give on their behalf all contractually binding
declarations in connection with the implementation in this Agreement and
the other Operative Documents and to pursue their rights and obligations
in accordance therewith. The Agent shall be exempted from the
restrictions of (S)181 BGB. The Agent shall be authorised to delegate
authority to entities within its group or to persons subject to a
professional duty of confidence and revoke the same free from any
restrictions pursuant to (S)181 BGB. Dresdner Bank AG shall in its
capacity as house bank pursuant to the Subsidy Agreements, exercise its
rights thereunder exclusively in accordance with the terms of such
agreements.
22.3 In addition, the Agent shall have the following duties:
22.3.1 verification of satisfaction of the conditions precedent pursuant to
(S)5.
22.3.2 negotiations with AMD Saxonia and the Sponsors as well as changes and
additions to this Agreement and the other Operative Documents including
any changes to the method of payment;
22.3.3 prompt circulation to the Banks of Drawdown Notices submitted by AMD
Saxonia to the Agent (together with confirmation from the Agent that it
has received the documents to be furnished pursuant to (S)4.1.1 (i) -
(iii) and (S)4.1.2 (i) - (iii), as the case may be), as well as
circulation to each of the Banks of the documents to be furnished by AMD
Saxonia or in individual cases, required by the Banks or any of them
pursuant to (S)16 and other information which is required to be
circulated to all the Banks in accordance with the terms of this
Agreement or the Operative Documents;
22.3.4 prompt notification of the Banks of all material circumstances coming to
the attention of the Agent in connection with the implementation of this
Agreement which affect the enforcement of the rights of all or any of
the Banks such as in particular the occurrence of an event pursuant to
(S)21;
49
22.3.5 distribution of all requisite information in connection with the 65/35
Guaranty to the Guarantors and consultation with them;
22.3.6 the convening and conduct of meetings of the Banks;
22.3.7 implementation of resolutions of the Banks;
22.3.8 monitoring of compliance with the provisions of this Agreement and the
other Operative Documents without prejudice to the obligations of the
Banks pursuant to (S)22.1, sentence 3;
22.3.9 instruction of, and consultation with, the Technical Advisor, the
Insurance Advisor the Banks' Auditor and other advisors, for example
lawyers.
22.4 If the Agent issues a material instruction within the meaning of
(S)22.3.4 each Bank, including the Agent, shall be entitled to require
the convening of a meeting of the consortium. In addition, a meeting of
the consortium can be required at any time by 25% of the votes of the
Banks. Convening of the meeting shall be made in writing, by telex or by
fax, setting out the agenda and subject to five (5) Banking Days notice
or in urgent cases with such notice as is appropriate to the urgency of
the matter. Meetings shall take place in Frankfurt am Main or such other
location as is mutually agreed. Resolutions may be passed by way of
written resolution if in the Agent's opinion, given the nature of the
matter to be determined, a written resolution is appropriate and the
Banks do not decline a written resolution procedure pursuant to the
majority of Banks (in accordance with (S)22.6).
22.5 Each Bank shall have voting rights corresponding to the amounts drawn
under the commitments made available by it, or if the Facilities have
not been drawn, corresponding to its respective commitment pursuant to
(S)2.1 and Schedule 1. Only those Banks represented in meetings -
including Banks authorised by written proxy on behalf of other Banks -
shall be entitled to vote. In respect of written resolutions, account
shall be taken only of those votes of the Banks whose written response
to the matter to be voted on has been received before the expiry five
(5) Banking Days after dispatch of the resolutions by the Agent and
whether received as an original or by telex or telefax. Abstentions will
not be counted. Resolutions shall be binding on the Agent as between the
members of the consortium inter se.
22.6 Resolutions of the Banks relating to amendments to the provisions of
this (S)22, changes of the amounts due to the Banks pursuant to the
provisions of this Agreement or any other Operative Agreement, or any
amendment to the due date relating to payment obligations of AMD
Saxonia, the release of the land charge referred to in (S)8.1.6 or the
waiver - in whole or in part - of rights under the 65/35 Guaranty
require the consent of all the Banks. Resolutions relating to the
termination, in whole or in part of this Agreement or the commencement
of legal proceedings or administration, composition or insolvency
proceedings against AMD Saxonia, AMD Holding or AMD Inc. or to changes
to the Security Documents or the payment obligations of the Sponsors
pursuant to the terms of the Sponsors' Support Agreement or the release
and realisation of securities (other than referred to in the first
sentence of this clause) require a majority of 75 % of the votes of the
Banks. In addition a majority of 75 % of votes of the Banks is required
for resolutions which concern:
(i) a decision of the Banks pursuant to (S)21;
50
(ii) the consent of the Banks to any change of the AMD Saxonia Wafer
Purchase Agreement, the AMD Holding Wafer Purchase Agreement, the
AMD Saxonia Research, Design and Development Agreement (Schedule
36), the AMD Holding Research, Design and Development Agreement
(Schedule 34), the Management Service Agreement (Schedule 37) and
the License Agreement (Schedule 38);
(iii) the consent of the Banks to any change of the Project Budget or the
Project Schedule or the Drawdown Schedule;
(iv) a change in the Technical Advisor, the Insurance Advisor, the
Project Manager, the Auditor, the Banks' Auditor or any other
advisor of the Banks, and
(v) a waiver of any of the conditions to drawing.
Otherwise, resolutions shall be passed with a majority of the votes of
the Banks; this applies in particular to resolutions which concern the
consent of the Banks pursuant to (S)20 or the approval of the Plans and
Specifications or any changes thereto.
22.7 The Agent undertakes to consult with the other Banks prior to taking any
material decisions or steps pursuant to the terms of this Agreement. At
the request of the Banks, the Agent undertakes to furnish further
information in respect of particular issues and to obtain such
information from the AMD Companies pursuant to (S)16.4 of this Agreement
or the provisions of the Operative Documents. In urgent cases, the Agent
may make determinations within the proper exercise of its discretion
without obtaining a resolution of the Banks. In such case, the Agent
will immediately inform the other Banks of the measures taken by it. To
the extent that the relevant measures can be revoked and the Banks pass
a resolution for such revocation, the Agent shall undertake all steps to
revoke the measures taken by it.
22.8 Each of the Banks (including the Agent) shall comply with its
obligations under this Agreement and under the other Operative Documents
with the customary care and attention pursuant to (S)347 HGB. The Agent
shall not assume any additional liability in particular with reference
to the legality, enforceability or value of the claims of the Banks and
all the security. Without prejudice to its other obligations pursuant to
this Agreement, the Agent is not obliged on its own volition to
undertake inquiries or investigations with respect to breaches of this
Agreement or as to the existence of any grounds for termination.
22.9 Each of the other Banks agrees to hold harmless and indemnify the Agent
in respect of all claims or obligations which arise or are asserted
against the Agent in the implementation of this Agreement save to the
extent the same arise from the Agent's gross negligence or willful
default and to compensate it for expenses incurred and not otherwise
reimbursed. The amount of the indemnity and/or the obligation to
compensate costs shall correspond to the commitments of each of the
Banks in respect of the Facilities. Costs will be paid to the Agent on
first demand in proportion of the commitments of the other Banks.
22.10 Each Bank confirms that it has independently verified the
creditworthiness of AMD Saxonia and the Sponsors and all Operative
Documents and all other documents relating thereto in all respects and
independently. If any Bank is of the opinion that the documents made
available to it in connection with the Operative Documents do not comply
with the
51
contractual requirements such Bank shall be obliged to inform the Agent
immediately thereof.
22.11 The Agent is entitled, on giving 60 days' notice, to transfer its rights
and obligations as Agent to the Paying Agent. Resignation by the Agent
from its role as Agent is possible only subject to 60 days' notice. If
the Banks have not passed a resolution with the required majority
(according to (S)22.6) by the seventh Banking Day before the end of this
period, the Agent shall appoint as its successor a Bank resident in
Germany. The Agent may be dismissed with a majority of at least 75 % of
the votes of all the Banks. It shall be a condition of the Agent's
dismissal that the function of the house bank within the meaning of the
Subsidy Agreement and the function of the Paying Agent is assumed by
another bank or financial institution. The Banks will consult with AMD
Saxonia in advance in respect of any change in the Agent.
(S)23
ADMINISTRATION OF SECURITY
23.1 The Agent (in this capacity also referred to as the "Security Agent")
shall be responsible for administration of the security granted in
favour of the Banks. The Banks hereby irrevocably authorise the Security
Agent, free from the restrictions pursuant to (S)181 BGB, to enter into
all agreements necessary for the granting of the accessory security.
Without prejudice to the restrictions governing the relationship of the
members of the Bank consortium inter se the Security Agent is further
authorised to enter into all necessary agreements for the granting of
security pursuant to (S)8 in their name, to amend and to supplement the
same and to exercise all rights of control, administration and
disposition arising under the Security Documents also in relation to the
accessory security in its own name and free from the restrictions set
out in (S)181 BGB. As between the Banks (internally), a resolution
passed with a majority of 75 % of the votes of the Banks shall be
required in respect of the release of any security, whether in whole or
in part save to the extent unanimity is required pursuant to (S)22.6.
The Security Agent shall be released from all restrictions pursuant to
(S)181 BGB in connection with all action taken in respect of the
security.
23.2 The Security Agent shall be authorised to delegate administration of the
security to another financial institution and to undertake all steps in
relation thereto in the name of the other Banks. The provisions of this
(S)23 shall apply in their entirety to any successor of the Security
Agent. The Security Agent shall be liable to the other Banks only for
the exercise of due care and attention in the selection of a successor.
The Security Agent will inform AMD Saxonia and the Banks in writing
prior to any transfer of its administrative duties and consult with AMD
Saxonia and the Banks concerning the transfer of such duties. The
Security Agent can be dismissed by way of resolution passed with a
majority of 75 % of the votes of the Banks provided that steps are taken
to ensure that the administration of the security is assumed by another
bank or financial institution.
23.3 Each Bank shall be entitled at any time to require information from the
Security Agent relating to the administration of the security. Without
prejudice thereto, the Security Agent shall in any event keep the other
Banks informed thereof in accordance with the proper exercise of its
discretion. In addition, the provisions of the German Civil Code
relating to the relationship of agents ((S)662 et seq. BGB) shall apply
to the relationship between the Security Agent and the other Banks.
52
23.4 The Security Agent shall not be liable or responsible for the validity
and enforceability of the Security Documents nor shall the Security
Agent assume any liability as to whether the relevant status of the
security is sufficient to secure the claims of the Banks under this
Agreement. In this context, each Bank shall be responsible for examining
the documentation delivered to it and shall inform the Security Agent of
any concerns it may have so that any such concerns may be taken account
of by a mutually acceptable arrangement.
23.5 The Security Agent will perform its obligations in relation to the
administration of the security with the customary standard of care in
accordance with (S)347 HGB. The Security Agent shall not bear any
liability in respect of possible shortfalls which may arise as a result
of a breach of their obligations by any of the obligors under the
Security Documents. Each Bank hereby agrees to indemnify and keep
harmless the Security Agent with respect to all claims which may arise
or be made against the Security Agent arising from the proper acceptance
and administration of the security, save to the extent the same arise
from the Security Agent's gross negligence or willful default and to
indemnify the Security Agent in respect of any costs incurred by it and
not otherwise reimbursed, in each case in proportion in which the
individual commitments of the relevant Banks bear to the Facilities. The
Security Agent shall be reimbursed for all costs on first demand in
accordance with the commitments of the Banks.
23.6 Realisation of the security granted pursuant to the Operative Documents
shall be effected to the extent such security is non-accessory security
by the Security Agent in its own name but for the account of the Banks.
The Security Agent is hereby authorised to realise the accessory
security in its own name and in the name and on behalf of the other
Banks.
23.7 The Banks shall agree by way of resolution passed with a majority of
75% of their votes on measures to implement any realisation of the
security. However, in urgent cases the Security Agent may make such
decisions unilaterally in accordance with the proper exercise of its
discretion; in such event, the Security Agent will immediately inform
the other Banks of the steps taken. In the event that unanimity is not
be achieved, the Banks will determine the relevant steps to be taken for
realisation by way of majority decision (in accordance with (S)22.6). In
all other respects, the conditions for or procedure of realisation of
security shall be as set out in the individual Security Documents.
23.8 Proceeds from the realisation of security shall be distributed in the
following order of priority:
(i) in satisfaction of the costs and other expenses of the Agent,
including any taxes incurred by the Agent in the administration and
realisation of the security pursuant to its obligations hereunder;
(ii) in payment of accrued interest; and
(iii) in payment of the claims of the Banks under the Facilities in
accordance with this Agreement, and in satisfaction of any other
claims of the Banks under or in connection with the Operative
Documents pro rata in accordance with the outstanding advances of
the Banks.
The Guarantors shall, without prejudice to the first right of
satisfaction in favour of the Banks as security for their shortfall
risk, be subrogated by operation of law to the relevant portion of the
guaranteed claims which is secured pro rata by the security granted in
respect thereof. To the extent the security does not pass to the
Guarantors by
53
operation of law, the same shall be transferred pro rata to the
Guarantors following payment by them.
Any remaining amount not otherwise required out of the proceeds of
realisation of the security shall be paid to AMD Saxonia.
Subject to the consent of the Guarantors, the Banks shall be entitled to
amend the above order of distribution at any time.
23.9 AMD Saxonia has agreed to pay to the Security Agent a fee in respect of
the administration of the security by it in an amount and on terms as to
payment set out in a letter of even date between AMD Saxonia and the
Security Agent.
(S)24
PAYING AGENT
24.1 The Paying Agent is hereby appointed with the duties of the Paying Agent
in respect of all rights and obligations of the Banks under this
Agreement and the other Operative Documents subject to the following
terms and conditions. The Banks hereby irrevocably appoint the Paying
Agent to do all acts and things in connection with the making of
payments under this Agreement and the other Operative Documents and to
give all necessary statements and declarations in their name and to
enforce and undertake all things on their behalf to the extent the same
have not been delegated to the Agent. The Paying Agent is exempted from
the restrictions of (S)181 BGB. The Paying Agent is authorised to
delegate authority and to revoke the same free from the restrictions of
(S)181 BGB.
24.2 The Paying Agent will exercise the standard of care customary in
commercial relations in accordance with (S)347 HGB in the performance of
its obligations under this Agreement and the other Operative Documents.
24.3 The Banks hereby undertake to make available the relevant amounts of
advances to be made available by them as requested by the Paying Agent
in accordance with (S)4 by 11.00 a.m. (London time) at the latest on the
drawdown date and make the same available to the account notified to
them by the Paying Agent. The Paying Agent will make available to AMD
Saxonia the amounts so provided with value for the same day.
24.4 The Paying Agent will pay to the Banks all interest, payments of
principal and other payments due to the Banks pursuant to this Agreement
on the relevant due date and to the accounts notified to the Paying
Agent by individual Banks. To the extent that amounts are paid to the
Banks without the Paying Agent having received a corresponding payment
in full from AMD Saxonia on the same day, the Paying Agent may debit the
relevant Bank accordingly.
24.5 AMD Saxonia shall pay to the Paying Agent in respect of the performance
of its duties under this Agreement a fee, the amount and the terms as to
payment of which are set out in a letter of even date from the Paying
Agent to AMD Saxonia.
24.6 The Banks hereby undertake to hold harmless and to indemnify the Paying
Agent against all claims which may arise or be made against the Paying
Agent in connection with the performance of its duties under this
Agreement, save to the extent the same
54
arise from the Paying Agent's gross negligence or willful default and to
reimburse all expenses borne by the Paying Agent and not otherwise
reimbursed. Each Bank shall indemnify the Paying Agent and reimburse
costs in an amount equal to the commitment of the relevant Bank under
the Facilities. All costs shall be payable to the Paying Agent on first
demand and in accordance with the commitments of the Banks.
24.7 The Paying Agent may resign on 60 days' notice. If no resolution of the
Banks has been passed by the seventh Banking Day before the expiry of
such notice period in respect of a successor to the Paying Agent with
the required majority (in accordance with (S)22.6) the Paying Agent
shall be entitled to appoint as its successor a credit institute
domiciled in Germany or Luxembourg. The Paying Agent can be dismissed by
way of resolution passed with a majority of 75 % of the votes of the
Banks provided that steps are taken to ensure that the administration of
the security is assumed by another bank or financial institution.
24.8 The department of the Paying Agent shall, with regard to the assumption
of the paying agent's duties for the Banks, be regarded as a entity
separate from the Paying Agent's other departments.
(S)25
COSTS
25.1 AMD Saxonia shall bear all expenses, fees and other external costs
incurred by the Agent, the Paying Agent and the Security Agent in
connection with the preparation, amendment and implementation of the
Operative Documents and the granting of the security and/or perfection
including in particular the reasonable costs of the Technical Advisor,
the Insurance Advisor and the Banks' Auditor and the reasonable fees,
costs and expenses of auditors and lawyers instructed by the Agent in
connection with the verification, valuation, administration and
realisation of the security or otherwise in connection with the
Operative Documents. AMD Saxonia's obligations to reimburse costs shall
also remain unaffected in those cases in which the Banks have paid the
costs of the parties referred to above pursuant to such Banks'
obligations to indemnify or otherwise reimburse such costs.
25.2 In the event of any payment received by a Bank either as a result of set
off by such Bank or by AMD Saxonia or as a result of any other
performance by AMD Saxonia as a result of which such Bank's claims are
paid in excess of the proportion due to it in respect of its commitments
in (S)2 and Schedule 1, such Bank shall be obliged to make a payment to
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the Paying Agent for the account of the other Banks such as to place
such other Banks in the position they would have been in had they
received payment in proportion to their Commitments pursuant to (S)2 and
Schedule 1. To the extent any Bank pays such excess amount to the other
----------
Banks, such Bank shall have a claim against AMD Saxonia in an amount
equal to the excess. This provision shall apply to any payment received
from or on account of AMD Saxonia. This provision does not, however,
apply in favour of a Bank which declined to participate in proceedings
initiated by the other Banks which have led to successful claims being
made under the Operative Documents. If any Bank is obliged to repay to
AMD Saxonia any amount received from any of the other Banks, the other
Banks shall be obliged to repay the amounts received by them to the Bank
obliged to repay.
55
(S)26
ASSIGNMENT; SUB-PARTICIPATIONS
26.1 The Banks are not entitled prior to Completion to assign, whether in
whole or in part, their rights under this Agreement. Assignments and
sub-participations to affiliated companies within the meaning of (S)15
of the Stock Corporation Act are permitted at any time as well as
assignments to third parties following termination of this Agreement.
After Completion, the Banks are entitled to assign their rights and
claims under this Agreement with the consent of AMD Saxonia and the
Agent, which consent may be withheld only for good cause. Each Bank is
entitled moreover at any time to grant sub-participations to other banks
or credit institutions in an amount up to 50 % of its respective
commitment on and subject to the following terms and conditions:
(i) sub-participations require the consent of AMD Saxonia and the Agent.
Consent may be withheld only for good cause;
(ii) the sub-participant shall not be granted rights as against AMD Saxonia
or as against the other Banks and no contractual relationship between
the sub-participant, AMD Saxonia or the other Banks shall be permitted
to exist;
(iii) implementation of this Agreement shall be effected exclusively as
between AMD Saxonia, the Agent and the Paying Agent and/or the relevant
Bank.
(S)27
MISCELLANEOUS
27.1 The failure by any of the Banks to exercise any of their rights
hereunder, (whether in whole or in part), in particular any failure to
exercise their right to terminate this Agreement, shall not constitute a
waiver by the Banks of such right nor shall they be estopped from doing
so. All rights pursuant to this Agreement shall have effect individually
and without prejudice to any other rights at law or under contract in
favour the Banks.
27.2 All amendments and supplements to this Agreement and the other Operative
Documents must be in writing unless they are required by law to be
notarially certified. This requirement shall apply also to any
amendments, release or waiver of the requirement for such written form
as well as all consents of the Banks contemplated under this Agreement.
27.3 The provisions of (S)22 to 24 and all rights and duties relating thereto
may be amended without the consent of AMD Saxonia this shall not apply
to the provisions set out in the last sentence of each of (S)22.11 and
(S)23.2.
27.4 The invalidity or unenforceability of one or more provisions of this
Agreement shall not affect the remaining provisions of this Agreement.
The invalid or unenforceable provision shall be substituted by a
provision which approximates most closely to the economic purpose of the
void or unenforceable provision.
27.5 AMD Saxonia shall not be entitled to assign its rights under this
Agreement to any third party or to dispose of such rights in any other
way without the prior written consent of the Banks.
56
27.6 Each of the Banks shall inform the Agent with a copy to the Paying Agent
at least five (5) Banking Days prior to any change in its Lending
Office.
27.7 All correspondence or notifications under in connection with this
Agreement shall be served personally at the following addresses (or such
other address notified in writing by the recipient to the other party)
or by registered letter, courier or fax:
to the Agent:
Dresdner Bank AG
Dr. Kulz-Ring 10
01067 Dresden
Attention: Direktion
Facsimile No.: (49) 351 489 1350
to the Banks:
Dresdner Bank AG
Dr. Kulz-Ring 10
01067 Dresden
Attention: Direktion
Facsimile No.: (49) 351 489 1350
Kreditanstalt fur Wiederaufbau
Palmengartenstrasse 5 - 9
60325 Frankfurt am Main
Attention: Frau Birgit Otte
Facsimile No.: (49) 69 74 31 2944
DG Bank Deutsche Genossenschaftsbank
Am Platz der Republik
60325 Frankfurt am Main
Attention: Herrn Lothar Ferber-Hammeke/Frau Ute Suffrian
Facsimile No.: (49) 69 7447 6098
L-Bank, Landeskreditbank Baden-Whrttemberg
Schlossplatz 10/12
76113 Karlsruhe
Attention: Frau Bettina Kilp
Facsimile No.: (49) 721 150 1033
Sachsen LB Landesbank Sachsen
Girozentrale
Humboldtstr. 25
04105 Leipzig
Attention: Herrn Dr. Carlhans Uhle
Facsimile No.: (49) 341 97 93 139
Bayerische Landesbank
Girozentrale
Briennerstrasse 20
80333 Munchen
Attention: Herrn Matthias Rohnfelder
Facsimile No.: (49) 89 2171 2549
57
Hypobank International S.A.
4, rue Alphonse Weicker
L-2099 Luxembourg
Attention: Herrn Erwin Moos
Facsimile No.: (352) 4272 4510
BHF-Bank Aktiengesellschaft
Niederlassung Leipzig
Kathe-Kollwitz-Str. 52
04109 Leipzig
Attention: Herrn Klaus Berthold/Frau Peggy Kuhnast
Facsimile No.: (49) 341 4654 150
Commerzbank AG
Filiale Dresden
Schumannstr. 21
01307 Dresden
Attention: Herrn Christoph Hense
Facsimile No.: (49) 351 4451 264
DSL Bank Deutsche Siedlungs- und Landesrentenbank
Gartnerweg 3
60322 Frankfurt
Attention: Herrn Rainer Franke
Facsimile No.: (49) 69 15421 122
Hamburgische Landesbank
Girozentrale
Gerhard-Hauptmann-Platz 50
20095 Hamburg
Attention: Herrn Gasser/Herrn Rebber
Facsimile No.: (49) 40 3333 3037
IKB Deutsche Industriebank AG
Karl-Theodor-Str. 6
40213 Dusseldorf
Attention: Frau Birgit Matzerath/ Herr Wolfram Kreisel
Facsimile No.: (49) 211 8221 697
Landesbank Rheinland-Pfalz
Girozentrale
Grosse Bleiche 54 - 56
55098 Mainz
Attention: Herrn Ulrich Voepel/Herrn Lothar Ayasse
Facsimile No.: (49) 6131 13 2599
Landesgirokasse Offentliche Bank und Landessparkasse
Corporate Finance (GB 57)
70144 Stuttgart
Attention: Abtlg. 5701
Facsimile No.: (49) 711 124 1239
58
ABN AMRO Bank (Deutschland) AG
Niederlassung Berlin
Unter den Linden 42
10105 Berlin
Attention: Herr Axel Huck
Facsimile No.: (49) 30 20 24 92 95
Creditanstalt-Bankverein
Wasagasse 2
A-1090 Wien
Attention: Herrn Dr. Martin Frank
Facsimile No.: (43) 1 310 05 54
The Sumitomo Bank, Limited, Dhsseldorf Branch
Immermannstrasse 14 - 16
40210 Dusseldorf
Attention: Herrn Wienke
Facsimile No.: (49) 211 3619 277
to AMD Saxonia:
AMD Saxony Manufacturing GmbH
Washingtonstrasse 16 A/B
01139 Dresden
Attention: Geschaftsfuhrer
Facsimile No: (49) 351 8412 150
to the Paying Agent
DRESDNER BANK LUXEMBOURG S.A.
26 Rue due Marche-aux Herbes
L-2097 Luxembourg
Attention: Projekt-Spezialfinanzierung
Facsimile No.: (352) 4760 297
27.8 The German language counterpart of this Agreement is binding.
27.9 To the extent this Agreement does not provide to the contrary this
Agreement shall be governed by the General Terms and Conditions of the
Agent set out in Schedule 62, save that all references to a "Bank" shall
-----------
be deemed to be references to the "Banks" within the meaning of this
Agreement and all references to a "customer" shall be deemed to be
references to AMD Saxonia.
27.10 All press statements or other announcements relating to this Agreement
shall require the prior written consent of the Agent which consent shall
not be unreasonably withheld. The withholding of consent by the Agent
shall be deemed to be unreasonable to the extent that the disclosure of
information relating to this Agreement is required by any law,
regulation or official requirement or as required by any recognised
securities supervisory authority or securities exchange.
59
(S)28
GOVERNING LAW
This Agreement shall be governed by the law of the Federal Republic of Germany.
(S)29
JURISDICTION
The courts of Frankfurt am Main shall have exclusive jurisdiction in respect of
the resolution of all disputes under or in connection with this Agreement.
Frankfurt am Main 11 March 1997
AMD SAXONY MANUFACTURING GMBH
/s/ Jack L. Saltich
- ---------------------------------------------
Managing Directors (Geschaftsfuhrer)
DRESDNER BANK AG
(as Agent, Security Agent and Bank)
/s/ Dr. Hans-Jurgen Menzel /s/ Horst Oechsler
- ---------------------------------------------
Other Banks:
KREDITANSTALT FUR WIEDERAUFBAU
/s/ Klaus Rosenfeld
- ---------------------------------------------
- ---------------------------------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
/s/ Klaus Rosenfeld
- ---------------------------------------------
- ---------------------------------------------
L-BANK, LANDESKREDITBANK BADEN-WgRTTEMBERG
/s/ Klaus Rosenfeld
- ---------------------------------------------
60
SACHSEN LB LANDESBANK SACHSEN GIROZENTRALE
/s/ Klaus Rosenfeld
- --------------------------------------
/s/ Klaus Rosenfeld
- --------------------------------------
BAYERISCHE LANDESBANK GIROZENTRALE
/s/ Klaus Rosenfeld
- --------------------------------------
HYPOBANK INTERNATIONAL S.A.
/s/ Klaus Rosenfeld
- --------------------------------------
- --------------------------------------
BHF-BANK AKTIENGESELLSCHAFT
/s/ Klaus Rosenfeld
- --------------------------------------
COMMERZBANK AG, Dresden Branch
/s/ Dr. Friedrich Droste
- --------------------------------------
- --------------------------------------
DSL BANK DEUTSCHE SIEDLUNGS- UND LANDESRENTENBANK
/s/ Klaus Rosenfeld
- -------------------------------------
- -------------------------------------
HAMBURGISCHE LANDESBANK - GIROZENTRALE -
/s/ Klaus Rosenfeld
- --------------------------------------
- --------------------------------------
IKB DEUTSCHE INDUSTRIEBANK AG
/s/ Klaus Rosenfeld
- --------------------------------------
- --------------------------------------
61
LANDESBANK RHEINLAND-PFALZ - GIROZENTRALE -
/s/ Lothar Ayasse
- --------------------------------------
/s/ Ulrich Voelpel
- --------------------------------------
LANDESGIROKASSE OFFENTLICHE BANK UND LANDESSPARKASSE
/s/ Klaus Rosenfeld
- --------------------------------------
ABN AMRO BANK (DEUTSCHLAND) AG, Frankfurt
/s/ Klaus Rosenfeld
- --------------------------------------
CREDITANSTALT-BANKVEREIN
/s/ Klaus Rosenfeld
- --------------------------------------
- --------------------------------------
THE SUMITOMO BANK, LIMITED, Dusseldorf Branch
/s/ Klaus Rosenfeld
- --------------------------------------
- --------------------------------------
DRESDNER BANK LUXEMBOURG S.A.
(as Paying Agent)
/s/ Wolfgang Schneider
- --------------------------------------
SCHEDULE 1
(COMMITMENTS OF THE BANKS)
BANKS AND THEIR LENDING OFFICES COMMITMENTS
DM Million
DRESDNER BANK AG, 210
Frankfurt am Main
KREDITANSTALT FUR WIEDERAUFBAU, 205
Frankfurt am Main
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, 125
Frankfurt am Main
L-BANK, LANDESKREDITBANK BADEN-WURTTEMBERG, 125
Karlsruhe
SACHSEN LB LANDESBANK SACHSEN GIROZENTRALE, 110
Leipzig
BAYERISCHE LANDESBANK GIROZENTRALE, 100
Munich
HYPOBANK INTERNATIONAL S.A., 100
Luxembourg
BHF-BANK AKTIENGESELLSCHAFT, 75
Leipzig
HAMBURGISCHE LANDESBANK - GIROZENTRALE - 75
Hamburg
COMMERZBANK AG, 75
Dresden Branch
DSL BANK DEUTSCHE SIEDLUNGS- UND LANDESRENTENBANK, 75
Bonn
IKB DEUTSCHE INDUSTRIEBANK AG, 75
Dhsseldorf
LANDESBANK RHEINLAND-PFALZ - GIROZENTRALE -, 75
Mainz
LANDESGIROKASSE OFFENTLICHE BANK UND LANDESSPARKASSE 75
Stuttgart
ABN AMRO BANK (DEUTSCHLAND) AG, 50
Berlin
CREDITANSTALT-BANKVEREIN, 50
Vienna
THE SUMITOMO BANK, LIMITED, 50
Dusseldorf
1.650,0
Schedule 2
- ----------------------------------------------------------------------------------------------------------------
| DRAWDOWN SCHEDULE |
- ----------------------------------------------------------------------------------------------------------------
PHASE
- ----------------------------------------------------------------------------------------------------------------
FACILITY A CUMULATIVE FACILITY B CUMULATIVE
PROJECT PHASE PERIOD PER PROJECT PHASE* FACILITY A* PER PROJECT PHASE* FACILITY B*
- ----------------------------------------------------------------------------------------------------------------
Planning/Design [
Shell
Clean Room
First Equipment
Qualification/ *
First Silicon
Technical Completion
Financial
Completion*** ]
- ----------------------------------------------------------------------------------------------------------------
* DM Millions
*** Q2/01 denotes the end of the availability period on 29 June 2001
[*] CONFIDENTIAL INFORMATION OMITTED AND FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
SCHEDULE 17
FINANCIAL COVENANTS AND EXCESS CASH
The financial covenants for AMD Saxony Manufacturing GmbH ("AMD
Saxonia") will be determined on the basis of the quarterly financial
statements of AMD Saxonia and other information provided by the
management pursuant to (S)16.2.1 and the audited annual financial
statements of AMD Saxonia and the Auditor's confirmation pursuant to
(S)16.2.2 of this Agreement.
Excess cash will be determined on the basis of the audited annual
financial statements to be provided pursuant to (S)16.2.2 of this
Agreement.
1. DEFINITIONS
OPENING CASH BALANCE:
cash at the beginning of a fiscal year or at the beginning of
the relevant period under consideration, as the case may be
ROLLING QUARTER BASIS:
refers to the calculation of a ratio or of an amount at the end
of a Fiscal Quarter in each case covering the Fiscal Quarter in
question and the three preceding Fiscal Quarters
CASH:
other marketable securities included in current assets ((S)266,
2B III No. 3 Commercial Code) including cash equivalent
investments as described in Schedule 23 to this Agreement
together with cheques, balances at the Bundesbank and the Post
Office and cash at bank ((S)266, 2B IV Commercial Code)
TANGIBLE NET WORTH:
Equity
plus 45% of special items with equity portion ((S)273, in
conjunction with (S)247, 3 Commercial Code)
2
plus Subordinated Shareholder Loans (less capitalised
interest)
less capitalised start-up and business expansion expenses
((S)269 Commercial Code)
less payments on account for fixed and Current Assets ((S)266
2A II No. 3, 266 2 B I No.4 Commercial Code)
less accruals for deferred tax released from reserves ((S)274
2 S 1 Commercial Code)
less intangible assets ((S)266 2 A I Commercial Code)
= TANGIBLE NET WORTH
CASH FLOW FROM OPERATIONS AND INVESTING:
net income for the year ((S)275, 2, No. 20 Commercial Code) or
net income during the relevant period under consideration, as
the case may be
less Interest Subsidies
plus depreciation ((S)275, 2, No. 7 Commercial Code)
less other operating income ((S)275, 2, No. 4 Commercial
Code), to the extent arising from the release of
provisions ((S)266, 3B Commercial Code) or from special
items with equity portion ((S)273 i.c. with (S) 247, 3
Commercial Code)
plus other operating expenses ((S)275, 2, No. 8 Commercial
Code), to the extent arising from accruals to the
reserves ((S)266, 3B Commercial Code), or from accruals
to special items with equity portion which do not result
from or are in connection with the payment of subsidies
or allowances ((S)273 in conjunction with 247, 3
Commercial Code)
plus/less decrease/increase of Net Working Capital
plus capitalised interest on Subordinated Shareholder Loans
less Capital Expenditure
= CASH FLOW FROM OPERATIONS AND INVESTING
EQUITY:
subscribed share capital ((S)266, 3A I Commercial Code) less
amounts not paid-up ((S)272, 1S 3 Commercial Code)
plus additional capital reserves ((S)266, 3A II Commercial
Code)
plus revenue reserves ((S)266, 3A, III Commercial Code)
plus/less retained profit/accumulated losses ((S)266, 3A, IV
Commercial Code)
plus/less net income/net loss for the year ((S)266, 3A, V
Commercial Code)
= EQUITY
3
CAPITAL EXPENDITURE:
as defined in (S)1 of this Agreement
CURRENT LIABILITIES:
all liabilities falling due within 12 months
MODIFIED EBIT:
net income for the year ((S)275, 2, No. 20 Commercial Code) or
net income during the period under consideration, as the case
may be
plus taxes on income ((S)275, 2, No. 18 Commercial Code)
plus other taxes ((S)275, 2, No. 19 Commercial Code)
plus Interest Expense on Bank Debt
plus interest and other expenses ((S)275, 2, No. 13
Commercial Code) including capitalised interest to the
extent capitalised on Subordinated Shareholder Loans
= MODIFIED EBIT
SUBORDINATED SHAREHOLDER LOANS:
all shareholder loans made to AMD Saxonia by AMD Holding and AMD
Inc. pursuant to the Sponsors' Support Agreement and the
Sponsors' Loan Agreement.
NET WORKING CAPITAL:
the difference between:
Current Assets
less Cash
and
Current Liabilities
less bank liabilities falling due within one year
4
= NET WORKING CAPITAL
SCHEDULED REPAYMENT OF BANK DEBT:
the amount of scheduled repayments to be made in accordance with
(S)7.2 of this Agreement in any particular period (excluding
prepayments)
FISCAL QUARTER:
each quarterly fiscal accounting period of AMD Saxonia ending on
or about the last day of March, June, September or the last
Sunday in December.
FIXED CHARGE COVER RATIO:
Cash Flow from Operations and Investing
plus Interest Subsidies
plus Interest Expense on Bank Debt
plus Opening Cash Balance
plus Mandatory prepayments pursuant to Section 7.4 of this
Agreement made before the relevant period under
consideration
plus Increases in subscribed share capital and capital
reserves within the period under consideration
plus Subordinated Shareholder Loans paid to AMD Saxonia in
the period under consideration
divided
by Scheduled Repayment of Bank Debt plus Interest Expense on
Bank Debt
= FIXED CHARGE COVER RATIO
CURRENT ASSETS:
Inventory ((S)266, 2 B I Commercial Code), accounts receivable
and other assets ((S)266, 2 B II Commercial Code), other
marketable securities included in the current assets ((S)266, 2
B III No. 3 Commercial Code), cheques, balances at the
Bundesbank and Post Office, and cash at bank ((S)266 2 B IV
Commercial Code)
5
TURNOVER OF INVENTORY:
on a Rolling Quarter Basis, the ratio of:
average of Inventory over the past four Fiscal Quarters
to
sales ((S)275 2 No. 1 Commercial Code) within such four Fiscal
Quarters
multiplied by
365
= TURNOVER OF INVENTORY
INVENTORY:
raw materials and supplies, work in progress, finished services,
finished goods and merchandise, payments on account (net of any
provisions for obsolete or slow moving stock) ((S)266 2B I
Commercial Code)
INTEREST EXPENSE ON BANK DEBT:
all interest payments (cash or capitalised), commisions, fees,
discounts and other financial charges incurred in respect of
indebtedness for borrowings from banks.
INTEREST COVER RATIO:
the ratio of Modified EBIT to Interest Expense on Bank Debt
INTEREST SUBSIDIES:
the annual amount of subsidies received or receivable by AMD
Saxonia pursuant to the SAB/Dresdner; Dresdner/AMD Subsidy
Agreement for the reimbursement of Interest Expense on Bank
Debt.
6
2. FINANCIAL COVENANTS
2.1 MINIMUM TANGIBLE NET WORTH
The Tangible Net Worth shall not at the end of any fiscal year be less
than the amounts set out below:
END OF A FISCAL YEAR AMOUNT IN DM MILLIONS
28 December 1997 [*]
27 December 1998 [*]
26 December 1999 [*]
31 December 2000 [*]
30 December 2001 [*]
29 December 2002 [*]
28 December 2003 [*]
26 December 2004 [*]
25 December 2005 [*]
31 December 2006 [*]
2.2 MAXIMUM CAPITAL EXPENDITURE
AMD Saxonia shall not undertake Capital Expenditure in excess of 125 %
of the amounts referred to for the relevant years as set out below:
END OF A FISCAL YEAR AMOUNT IN DM MILLIONS
29 December 2002 [*]
28 December 2003 [*]
26 December 2004 [*]
25 December 2005 [*]
31 December 2006 [*]
2.3 MINIMUM INTEREST COVER RATIO
The Interest Cover Ratio calculated on a Rolling Quarter Basis shall not
at the end of any Fiscal Quarter be less than the amount set out below:
* CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
7
END OF THE FISCAL QUARTER INTEREST COVER RATIO
30 December 2001 1,70
31 March 2002 1,70
30 June 2002 1,90
29 September 2002 2,00
29 December 2002 2,20
30 March 2003 2,40
29 June 2003 2,60
28 September 2003 2,80
28 December 2003 3,00
28 March 2004 3,00
27 June 2004 3,00
26 September 2004 3,00
26 December 2004 3,00
27 March 2005 3,00
26 June 2005 3,00
25 September 2005 3,00
25 December 2005 3,00
26 March 2006 3,00
25 June 2006 3,00
24 September 2006 3,00
31 December 2006 3,00
2.4 FIXED CHARGE COVER RATIO
The Fixed Charge Cover Ratio calculated on a Rolling Quarter Basis shall
not at the end of any Fiscal Quarter be less than the ratio set out
below:
END OF THE FISCAL QUARTER FIXED CHARGE COVER RATIO
30 December 2001 1,25
31 March 2002 1,25
30 June 2002 1,25
29 September 2002 1,25
29 December 2002 1,30
30 March 2003 1,30
29 June 2003 1,30
28 September 2003 1,30
28 December 2003 1,40
28 March 2004 1,40
27 June 2004 1,40
26 September 2004 1,60
26 December 2004 1,60
8
27 March 2005 1,80
26 June 2005 2,00
25 September 2005 2,25
25 December 2005 2,50
26 March 2006 2,75
25 June 2006 3,00
24 September 2006 3,00
31 December 2006 3,00
2.5 MAXIMUM INVENTORY TURNOVER
The Inventory Turnover of AMD Saxonia, calculated on a Rolling Quarter
Basis, shall not at the end of any Fiscal Quarter be more than the
amount set out below
END OF THE FISCAL QUARTER INVENTORY TURNOVER
31 December 2000 57
1 April 2001 57
1 July 2001 57
30 September 2001 57
30 December 2001 57
31 March 2002 57
30 June 2002 57
29 September 2002 57
29 December 2002 57
30 March 2003 57
29 June 2003 57
28 September 2003 57
28 December 2003 57
28 March 2004 57
27 June 2004 57
26 September 2004 57
26 December 2004 57
27 March 2005 57
26 June 2005 57
25 September 2005 57
25 December 2005 57
26 March 2006 57
25 June 2006 57
24 September 2006 57
31 December 2006 57
9
3. EXCESS CASH:
Cash Flow from Operations and Investing
less Scheduled Repayment of Bank Debt
plus Opening Cash Balance
less DM 150,000,000
= EXCESS CASH*
* not included in the calculation of Excess Cash are insurance proceeds
which are, or are to be, applied directly for reinstatement or
replacement in accordance with Schedule 22
-----------