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SPONSORS' SUPPORT AGREEMENT
Dated 11 March 1997
between
ADVANCED MICRO DEVICES, INC.,
AMD SAXONY HOLDING GMBH,
and
DRESDNER BANK AG,
as Agent and Security Agent
--------------------------------------------------------------------------------
<PAGE>
INDEX
ARTICLE I Definitions and Accounting Terms 2
ARTICLE II Contribution of Equity Capital 26
ARTICLE III Sponsors' Loans 29
ARTICLE IV Cost Overruns Prior to Completion 32
ARTICLE V Completion Guaranty 35
ARTICLE VI Subsidies Undertaking 36
ARTICLE VII Pari Passu Undertaking 38
ARTICLE VIII AMD Inc. Share Pledge Agreement;
AMD Holding Security Documents 38
ARTICLE IX Sponsors' Guaranty 39
ARTICLE X Sponsors' Subordination Agreement;
AMD Inc. Subordination Agreement 39
ARTICLE XI Obligations Unconditional 40
ARTICLE XII Representations and Warranties 40
ARTICLE XIII Covenants 58
ARTICLE XIV Costs and Expenses; Indemnities; Taxes; Etc. 71
ARTICLE XV Miscellaneous 76
ARTICLE XVI Governing Law, Jurisdiction, and Language 79
SCHEDULE I - Existing Wafer Fabrication Plants
SCHEDULE II - Sponsors' Disclosure Schedule
<PAGE>
SPONSORS' SUPPORT AGREEMENT
THIS SPONSORS' SUPPORT AGREEMENT, dated 11 March 1997, is made between ADVANCED
MICRO DEVICES, INC., a corporation organised and existing under the laws of the
State of Delaware, United States of America, with its chief executive office and
principal place of business at One AMD Place, Sunnyvale, California 94088,
United States of America ("AMD Inc."), AMD SAXONY HOLDING GMBH, Dresden,
--------
registered in the Commercial Register of the Dresden County Court, HRB 13931
("AMD Holding"; and, together with AMD Inc., collectively, the "Sponsors"), and
----------- --------
DRESDNER BANK AG ("Dresdner"), as Agent under the Loan Agreement referred to
--------
below (in such capacity, the "Agent") for the Banks referred to below, and as
-----
Security Agent under such Loan Agreement (in such capacity, the "Security
--------
Agent") for the Secured Parties referred to below.
-----
W I T N E S S E T H :
WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden County Court HRB 13186 ("AMD Saxonia"), a wholly-owned
-----------
Subsidiary (such and other capitalised terms being used herein with the meanings
provided in Section 1.1) of AMD Holding, which is, in turn, a wholly-owned
-----------
Subsidiary of AMD Inc., has been formed for the purpose of constructing, owning,
and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");
-------
WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors
expect to make substantial subordinated loans to, and AMD Holding expects to
make substantial equity investments in, AMD Saxonia, and (ii) AMD Saxonia has
entered into a Syndicated Loan Agreement, dated 11 March 1997 (the "Loan
----
Agreement"), with the banks from time to time party thereto (hereinafter
---------
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Agent and Security Agent, and Dresdner Bank Luxembourg S.A., as Paying Agent (in
such capacity, the "Paying Agent"), providing, inter alia, for two separate
------------ ----------
senior secured term and standby facilities aggregating up to DM1,650,000,000
(one billion six hundred fifty million Deutsche Marks);
WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with the Agent (for the benefit of itself and
the Banks) and the Security Agent (for the benefit of the Secured Parties), for
the purpose, among other things, of providing (i) certain assurances with
respect to the completion of the Project, and (ii) certain undertakings to and
for the benefit of the Secured Parties; and
WHEREAS, a condition precedent to the initial Advance is, inter alia, the
execution by the Sponsors of this Agreement and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;
NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:
<PAGE>
ARTICLE I
Definitions and Accounting Terms
SECTION 1.1 Definitions. Unless otherwise defined herein, the following terms
(whether or not underlined) when used in this Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):
"Advances" means all advances that the Banks make to AMD Saxonia pursuant
--------
to the Loan Agreement.
"Affiliate" means, with respect to any Person, a Person which, directly or
---------
indirectly, controls, is controlled by, or is under common control with, such
other Person; and, for purposes of this definition, the concept of "control",
-------
with respect to any Person, signifies the possession of the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, the possession of voting rights, by
contract, or otherwise; provided, that none of the Agent, the Security Agent,
--------
the Paying Agent, any of the Banks, nor any of their respective Affiliates,
shall be deemed to be Affiliates of (x) any AMD Company or (y) any other
Subsidiary of AMD Inc.
"Agent" has the meaning assigned to that term in the introduction to this
-----
Agreement.
"Agreement" means this Sponsors' Support Agreement, as the same may be
---------
amended or modified in accordance with the terms hereof and in effect.
"AMD Companies" means AMD Saxonia, AMD Holding, and AMD Inc., collectively.
-------------
"AMD Holding" has the meaning assigned to that term in the introduction to
-----------
this Agreement.
"AMD Holding Assignment (U.S.A.)" means the AMD Holding Assignment of,
-------------------------------
inter alia, rights under the Wafer Purchase Agreements, in the form set out in
Schedule 56 to the Loan Agreement, between AMD Holding and the Security Agent.
"AMD Holding Assignment of Contractual Rights" means the AMD Holding
--------------------------------------------
Assignment of Contractual Rights, in the form set out in Schedule 55 to the Loan
-----------
Agreement, between AMD Holding and the Security Agent.
"AMD Holding Assignment of Current Assets" means the AMD Holding Security
----------------------------------------
Assignment of Current Assets, in the form set out in Schedule 52 to the Loan
-----------
Agreement, between AMD Holding and the Security Agent.
2
<PAGE>
"AMD Holding Charge of Bank Accounts" means the AMD Holding Charge of Bank
-----------------------------------
Accounts, in the form set out in Schedule 54 to the Loan Agreement, between AMD
-----------
Holding and the Security Agent.
"AMD Holding Global Assignment" means the AMD Holding Global Assignment, in
-----------------------------
the form set out in Schedule 53 to the Loan Agreement, between AMD Holding and
-----------
the Security Agent.
"AMD Holding Research Agreement" means the AMD Holding Research, Design and
------------------------------
Development Agreement, in the form set out in Schedule 34 to the Loan Agreement,
-----------
between AMD Inc. and AMD Holding.
"AMD Holding Security" means all collateral security created pursuant to
--------------------
the AMD Holding Security Documents.
"AMD Holding Security Documents" means, collectively, the AMD Holding
------------------------------
Assignment (U.S.A), the AMD Holding Assignment of Contractual Rights, the AMD
Holding Assignment of Current Assets, the AMD Holding Charge of Bank Accounts,
the AMD Holding Global Assignment, the AMD Holding Share Pledge Agreement, and
each other instrument or document designated by the Agent (with the consent of
each AMD Company) as an AMD Holding Security Document under and for purposes of
this Agreement.
"AMD Holding Share Pledge Agreement" means the AMD Holding Share Pledge
----------------------------------
Agreement, in the form set out in Schedule 51 to the Loan Agreement, between AMD
-----------
Holding and the Security Agent.
"AMD Holding Wafer Purchase Agreement" means the AMD Holding Wafer Purchase
------------------------------------
Agreement, in the form of Schedule 33 to the Loan Agreement, between AMD Inc.
-----------
and AMD Holding.
"AMD Inc." has the meaning assigned to that term in the introduction to
-------- ------------
this Agreement.
"AMD Inc. Guaranty" means the AMD Inc. Guaranty in the form set out in
-----------------
Schedule 27 to the Loan Agreement, executed by AMD Inc. in favour of AMD
-----------
Saxonia, the Agent, and the Security Agent for the benefit of the Secured
Parties.
"AMD Inc. 1996 Bank Credit Agreement" means the Credit Agreement, dated as
-----------------------------------
of July 19, 1996, between, inter alia, AMD Inc., the lenders party thereto, and
----------
Bank of America National Trust & Savings Association, as administrative agent.
"AMD Inc. Primary Bank Credit Agreement" means, from time to time:
--------------------------------------
(i) the AMD Inc. 1996 Bank Credit Agreement; or
3
<PAGE>
(ii) if the agreement referred to in paragraph (i) above is terminated or
cancelled, then any secured or unsecured revolving credit or term loan
agreement between or among AMD Inc., as borrower, and any bank or
banks, as lender(s), for borrowed monies to be used for general
corporate purposes of AMD Inc., with an original term of not less than
4 years and an original aggregate loan commitment of at least
$100,000,000 (one hundred million Dollars) or the equivalent thereof
in any other currency, and, if there is more than one such revolving
credit or term loan agreement, then such agreement which involves the
greatest original aggregate loan commitment(s) and, as between
agreements having the same aggregate original loan commitment(s), then
the one which has the most recent date; or
(iii) if the agreement referred to in paragraph (i) above and all of the
agreements, if any, which could apply under paragraph (ii) above have
been terminated or cancelled, then so long as paragraph (ii) does not
apply as the result of one or more new agreements being entered into,
the agreement which is the last such agreement under paragraph (i) or
(ii) to be so terminated or cancelled as in effect immediately prior
to such termination or cancellation.
"AMD Inc. Security" means all collateral security furnished pursuant to the
-----------------
AMD Inc. Share Pledge Agreement.
"AMD Inc. Senior Secured Note Indenture" means that certain Indenture,
--------------------------------------
dated as of August 1, 1996, between AMD Inc. and United States Trust Company of
New York, as trustee, relating to the issuance by AMD Inc. of $400,000,000 (four
hundred million Dollars) of its 11% Senior Secured Notes due 2003.
"AMD Inc. Share Pledge Agreement" means the AMD Inc. Share Pledge
-------------------------------
Agreement, in the form set out in Schedule 41 to the Loan Agreement, between AMD
-----------
Inc. and the Security Agent.
"AMD Inc. Subordination Agreement" means the AMD Inc. Subordination
--------------------------------
Agreement, in the form set out in Schedule 42 to the Loan Agreement, between AMD
-----------
Inc., AMD Holding, and the Security Agent.
"AMD Saxonia" has the meaning assigned to that term in the first recital of
----------- -------------
this Agreement.
"AMD Saxonia Assignment (U.S.A)" means the AMD Saxonia Assignment of, inter
------------------------------
alia, rights under the AMD Saxonia Wafer Purchase Agreement, in the form set out
in Schedule 50 to the Loan Agreement, between AMD Saxonia and the Security
-----------
Agent.
4
<PAGE>
"AMD Saxonia Assignment of Contractual Rights" means the AMD Saxonia
--------------------------------------------
Assignment of Contractual Rights, in the form set out in Schedule 49 to the Loan
-----------
Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Current Assets" means the AMD Saxonia Security
----------------------------------------
Assignment of Current Assets, in the form set out in Schedule 44 to the Loan
-----------
Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Fixed Assets" means the AMD Saxonia Security
--------------------------------------
Assignment of Fixed Assets, in the form set out in Schedule 45 to the Loan
-----------
Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Insurances" means the AMD Saxonia Assignment of
------------------------------------
Insurances, in the form set out in Schedule 46 to the Loan Agreement, between
-----------
AMD Saxonia and the Security Agent.
"AMD Saxonia Charge of Project Accounts" means the AMD Saxonia Charge of
--------------------------------------
Project Accounts, in the form set out in Schedule 48 to the Loan Agreement,
-----------
between AMD Saxonia and the Security Agent.
"AMD Saxonia/Dresdner Subsidy Agreement" means the AMD/Dresdner Subsidy
--------------------------------------
Agreement, in the form set out in Schedule 25 to the Loan Agreement, between AMD
-----------
Saxonia and Dresdner.
"AMD Saxonia Disclosure Schedule" means the Disclosure Schedule attached to
-------------------------------
the Loan Agreement as Schedule 15, as it may be amended, supplemented, or
-----------
otherwise modified from time to time by AMD Saxonia with the written consent of
the Agent.
"AMD Saxonia Global Assignment" means the AMD Saxonia Global Assignment, in
-----------------------------
the form set out in Schedule 47 to the Loan Agreement, between AMD Saxonia and
-----------
the Security Agent.
"AMD Saxonia Hedging Contract" means the Agreement, in the form set out in
----------------------------
Schedule 50a to the Loan Agreement, between AMD Saxonia and AMD Inc.
------------
"AMD Saxonia Land Charge" means the Grundschuld, in the form set out in
-----------------------
Schedule 43 to the Loan Agreement, between AMD Saxonia and the Security Agent.
-----------
"AMD Saxonia Research Agreement" means the AMD Saxonia Research, Design and
------------------------------
Development Agreement, in the form set out in Schedule 36 to the Loan Agreement,
-----------
between AMD Holding and AMD Saxonia.
"AMD Saxonia Security" means all collateral security created pursuant to
--------------------
the AMD Saxonia Security Documents.
5
<PAGE>
"AMD Saxonia Security Documents" means, collectively, the AMD Saxonia
------------------------------
Assignment (U.S.A), the AMD Saxonia Assignment of Contractual Rights, the AMD
Saxonia Assignment of Current Assets, the AMD Saxonia Assignment of Fixed
Assets, the AMD Saxonia Assignment of Insurances, the AMD Saxonia Charge of
Project Accounts, the AMD Saxonia Land Charge, the AMD Saxonia Global
Assignment, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an AMD Saxonia Security Document under and
for purposes of this Agreement.
"AMD Saxonia Wafer Purchase Agreement" means the AMD Saxonia Wafer Purchase
------------------------------------
Agreement, in the form set out in Schedule 35 to the Loan Agreement, between AMD
-----------
Holding and AMD Saxonia.
"Approved Project Budget" means:
-----------------------
(i) initially, that certain Project Budget, in the form set out in
Schedule 6 to the Loan Agreement, which has been prepared by AMD
----------
Saxonia and approved by each Sponsor; and
(ii) at any time after such Project Budget has been updated, amended,
supplemented, or otherwise modified, and prior to Completion, any such
updated, amended, supplemented, or modified Project Budget having been
approved by each AMD Company (such approval of each Sponsor not to be
unreasonably withheld or delayed) and the Agent (which may, in its
sole discretion, consult with the Technical Advisor and the Banks'
Auditor) in accordance with ss.18.2 of the Loan Agreement.
The initial Approved Project Budget and (subject to the requirements of ss.
---
13.1(i)(d)(y)(1)) each subsequent Approved Project Budget from time to time in
----------------
effect shall itemise, separately from the other information set forth therein,
and on a Project Phase by Project Phase basis, the aggregate Capital Expenditure
then required to be made by AMD Saxonia in order to complete each then
uncompleted Project Phase of the Project and to achieve Completion. All
references herein to the Approved Project Budget shall, at any time, refer to
the Approved Project Budget as then in effect.
"Approved Project Schedule" means:
-------------------------
(i) initially, that certain Project Schedule, in the form set out in
Schedule 7 to the Loan Agreement, which has been prepared by AMD
----------
Saxonia and approved by each Sponsor with respect to the schedule for
completing each Project Phase and for achieving Completion; and
(ii) at any time after such Project Schedule has been updated, amended,
supplemented, or otherwise modified, and prior to Completion, any such
updated, amended, supplemented, or modified Project Schedule having
been ap-
6
<PAGE>
proved by each AMD Company (such approval of each Sponsor not to be
unreasonably withheld or delayed) and the Agent (which may, in its
sole discretion, consult with the Technical Advisor and the Banks'
Auditor) in accordance with ss.18.2 of the Loan Agreement.
-------
The initial Approved Project Schedule and (subject to the requirements of ss.
--
13.1(i)(d)(y)(2)) each subsequent Approved Project Schedule from time to time in
----------------
effect shall itemise, separately from the other information set forth therein,
and on a Project Phase by Project Phase basis, the then anticipated date for
completing each then uncompleted Project Phase and for achieving Completion. All
references herein to the Approved Project Schedule shall, at any time, refer to
the Approved Project Schedule as then in effect.
"Auditor" means Ernst & Young Wirtschaftsprufungsgesellschaft mbH or such
-------
other firm of auditors charged with duties relating to the Project as may be
appointed by AMD Saxonia with the consent of the Agent, such consent not to be
unreasonably delayed or withheld.
"Available Tranche A Amount" means, on any date, the excess, if any, of:
--------------------------
(i) the Total Tranche A Commitment Amount on such date;
over
(ii) the aggregate unpaid principal amount of all Tranche A Advances
outstanding on such date.
"Available Tranche B Amount" means, on any date, the excess, if any, of:
--------------------------
(i) the Total Tranche B Commitment Amount on such date;
over
(ii) the aggregate unpaid principal amount of all Tranche B Advances
outstanding on such date.
"Average Production Cost Per Wafer" means, with respect to any Fiscal
---------------------------------
Quarter, the amount determined by dividing (x) the aggregate cost, determined in
accordance with GAAP, incurred by AMD Saxonia for the production of all Wafers
"Shipped" (as defined in the AMD Saxonia Wafer Purchase Agreement) during such
Fiscal Quarter (including all materials, labor, and other out-of pocket costs
and expenses, but excluding depreciation and interest expense), by (y) the
number of Wafers "Shipped" (as so defined) during such Fiscal Quarter.
"Banks' Auditor" means BDO Deutsche Warentreuhand AG
--------------
Wirtschafts-prufungsgesellschaft or such other firm of auditors charged with
duties relating to the Project as may be appointed by the Banks with the consent
of AMD Saxonia, such consent not to be unreasonably delayed or withheld.
7
<PAGE>
"Bank" and "Banks" have the respective meanings assigned to those terms in
---- -----
the second recital of this Agreement.
------ -------
"Business Day" means any day of the year on which banks are generally open
------------
for business in London, Frankfurt am Main, Dresden and, to the extent the same
relates to any obligation to be performed by AMD Inc., San Francisco.
"Capital Expenditure" means all acquisition or manufacturing costs in
-------------------
respect of fixed and movable assets in accordance with ss. 266 2 A II of the
Commercial Code and all acquisition costs for intangible assets in accordance
with ss. 266 2 A I of the Commercial Code, to the extent the same have a useful
operational life of more than one year (not being expenditures chargeable to the
profit and loss account).
"Capitalised Lease Liabilities" means, with respect to any Person, all
-----------------------------
monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as fixed or capitalised
leases or finance leases, and, for purposes of this Agreement, the amount of
such obligations shall be the capitalised amount thereof, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Cash Equivalent Investment" means any security or other instrument set out
--------------------------
in Schedule 23 to the Loan Agreement.
"Class A Sponsors' Loans" has the meaning assigned to that term in Section
-----------------------
3.1.
"Class B Sponsors' Loans" has the meaning assigned to that term in Section
-----------------------
3.1.
"Completion" means 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 to the Loan Agreement is confirmed to the Agent
------------------------------
by the submission of properly executed originals of such Certificates.
"Completion Certificates" means the Scheduled Project Phase Completion
-----------------------
Certificates, the Technical Completion Certificates, and the Financial
Completion Certificates.
"Completion Date" means the date specified by the Agent in a notice to be
---------------
given to each AMD Company and each Bank as the first date on or as of which
Completion shall have occurred.
8
<PAGE>
"Compliance Certificate" means an Annual Pricing Compliance Certificate, a
----------------------
Quarterly Pricing Compliance Certificate, or a Pari Passu Compliance
Certificate, as the case may be.
"Consent and Agreement" means:
---------------------
(i) in the case of the Sponsors, the Sponsors' Consent and Agreement;
(ii) in the case of the Contractor, the Contractor's Consent and
Agreement;
(iii) in the case of an Equipment Supplier, each Equipment Supplier's
Consent and Agreement; and
(iv) in the case of a Service Supplier, each Service Supplier's Consent
and Agreement.
"Contingent Liabilities" means, with respect to any Person, any agreement,
----------------------
undertaking, or arrangement by which such Person guarantees, endorses, or
otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment to, supply
funds to, or otherwise invest in, a debtor, or otherwise to assure a creditor
against loss) the indebtedness, obligation, or other liability of any other
Person (other than by endorsements of instruments in the course of collection),
or guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
indebtedness, obligation, or other liability guaranteed thereby.
"Contractor" means Meissner & Wurst GmbH & Co., Ro(beta)bachstra(beta)e 38,
----------
70499 Stuttgart, registered in the Commercial Register of the Stuttgart County
Court HRA 1208.
"Contractor's Consent and Agreement" means the Contractor's Consent and
----------------------------------
Agreement, in the form set out in Schedule 39 to the Loan Agreement, or in such
-----------
other form as is consented to by the Security Agent from the Contractor in
favour of the Security Agent.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust, or other instrument, document, or agreement
to which such Person is a party or by which it or any of its property is bound.
"Cost Overruns" means, at any time, the difference at such time between
-------------
Capital Expenditure estimated in the initial Approved Project Budget and, if
more, the actual Capital Expenditure incurred, in each case calculated on a
cumulative basis.
9
<PAGE>
"Cost to Complete" means, at the time any determination thereof is to be
----------------
made, the amount then most recently determined by the AMD Companies and
certified to the Agent (or, in the event the Agent so requests, the amount then
most recently determined reasonably and in good faith by the Technical Advisor
and certified to the Agent upon its request (after consultation with the AMD
Companies), as the then aggregate amount of additional Capital Expenditure
required to be made to achieve Completion.
"Debt Service Reserve Account" means the reserve account referred to and
----------------------------
opened pursuant in ss. 19.4 of the Loan Agreement (including any sub-accounts
--------
into which such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.
"Design/Build Agreement" means the Design/Build Agreement for the
----------------------
construction of the Plant and the Design Center, in the form set out in Schedule
--------
39 to the Loan Agreement, between the Contractor and AMD Saxonia.
--
"Design Center" means the research, design, and development facilities
-------------
constructed or to be constructed by AMD Saxonia and integrated with the Plant
for the purpose of designing and developing a broad spectrum of state-of-the-art
and other digital components such as micro-processors and circuits for the
telecommunications and multi-media sectors, and improvements thereof.
"Deutsche Mark Equivalent" means, with respect to any Class A Sponsors'
------------------------
Loan, the amount, expressed in Deutsche Marks, which results from the conversion
of Dollars to Deutsche Marks at a spot rate of exchange equal to the greater of
(i) DM 1.45 for $1.00 and (ii) the Agent's spot rate of exchange, expressed in
Deutsche Marks, for the sale of Dollars for Deutsche Marks prevailing on the
date two (2) Business Days prior to the date such Class A Sponsors' Loan is or
was due to be made.
"Deutsche Marks" and the sign "DM" mean lawful money of the Federal
-------------- --
Republic of Germany from time to time.
"Disclosure Schedules" means the AMD Saxonia Disclosure Schedule and the
--------------------
Sponsors' Disclosure Schedule, collectively.
"Dollars" and the sign "$" mean the lawful money of the United States of
------- -
America from time to time.
"Dresdner" has the meaning assigned to that term in the introduction to
-------- ------------
this Agreement.
"Encumbrance" means, (i) when used with reference to any Person organized
-----------
and existing under the laws of the Federal Republic of Germany, any security
interest in property or in rights to secure payment of a debt or performance of
an obligation, including, but not
10
<PAGE>
limited to, mortgages (Hypotheken), land charges (Grundschulden), annuity
charges (Rentenschulden), contractual and legal pledges (vertragliche und
gesetzliche Pfandrechte) including pledges or mortgages in favour of execution
creditors (Pfandungspfandrechte und Zwangshypotheken), transfers of title by way
of security (Sicherungsubereignungen), assignments of claims or other property
or rights by way of security (Sicherungsabtretungen und sonstige Ubertragungen
von Sachen oder Rechten zur Sicherung), retention of title arrangements
(Eigentumsvorbehalt) including extended retentions of title (erweiterter und
verlangerter Eigentumsvorbehalt), and any other priority or preferential
arrangement of any kind or nature whatsoever, and (ii) when used with reference
to any other Person, any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge (including floating and fixed charges) against or interest in property to
secure payment of a debt or performance of an obligation, or other preferential
arrangement of any kind or nature whatsoever in respect of any property, but not
including the interest of a lessor under a lease which, in accordance with GAAP,
would be classified as an operating lease.
"Equipment Suppliers" means, collectively, each Person party to a contract
-------------------
or other agreement with AMD Saxonia in the capacity of a supplier of fixed or
tangible current assets for the Project; it being understood and agreed that AMD
Inc. or an Affiliate thereof (other than AMD Saxonia) may be an Equipment
Supplier.
"Equipment Supplier's Consent and Agreement" means, with respect to an
------------------------------------------
Equipment Supplier, such Equipment Supplier's Consent and Agreement, in the form
set out in Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 or Annex
----------- -----------
3 to Schedule 55 of the Loan Agreement, as the case may be, or in such other
-----------
form as is consented to by the Security Agent, which pertains to a Material
Equipment Supply Contract or which is otherwise required pursuant to the terms
of the Loan Agreement or the Security Documents.
"Equipment Supply Contract" means each agreement (also in the form of an
-------------------------
order) between AMD Saxonia and suppliers (including AMD Inc. or one of its
Affiliates) relating to the acquisition by, and delivery to, AMD Saxonia of
fixed or tangible current assets for the Project.
"Equity Capital" means registered stated capital (Stammkapital).
--------------
"Event of Default" means an event which would entitle the Banks to
----------------
terminate their commitments and the loan facilities pursuant to ss. 21 of the
------
Loan Agreement.
"Event of Termination" means any event which would entitle a party to an
--------------------
Operative Document to terminate such Operative Document in accordance with the
terms thereof; provided, however, that such event could reasonably be expected
-----------------
to have a material adverse consequence to the entirety of the transactions
contemplated by the Operative Documents.
11
<PAGE>
"Financial Completion" is deemed to have occurred when:
--------------------
(i) all of the conditions set forth in the form of Financial Completion
Certificate (Obligors) have been satisfied in all material respects,
all of the statements of the AMD Companies appearing in said form of
Certificate are true and correct in all material respects, and the
Agent shall have received a fully executed counterpart of such
Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Financial Completion Certificate (Banks' Auditor) and the Financial
Completion Certificate (Technical Advisor).
"Financial Completion Certificate (Banks' Auditor)" means a certificate, in
-------------------------------------------------
the form set out in Schedule 12 to the Loan Agreement (appropriately completed),
-----------
executed by the Banks' Auditor and delivered to the Agent.
"Financial Completion Certificate (Technical Advisor)" means a certificate,
----------------------------------------------------
in the form set out in Schedule 13 to the Loan Agreement (appropriately
-----------
completed), executed by the Technical Advisor, and delivered to the Agent.
"Financial Completion Certificate (Obligors)" means a certificate, in the
-------------------------------------------
form set out in Schedule 11 to the Loan Agreement (appropriately completed),
-----------
executed by the AMD Companies, and delivered to the Agent.
"Financial Completion Certificates" means the Financial Completion
---------------------------------
Certificate (Obligors), the Financial Completion Certificate (Banks' Auditor)
and the Financial Completion Certificate (Technical Advisor).
"Financial Ratio Calculation Date" means
--------------------------------
(i) the Completion Date; and
(ii) the date as of which the Fixed Charge Cover Ratio is, or is required
to be, calculated in any certificate of compliance furnished by AMD
Saxonia pursuant to ss. 16.2.1 of the Loan Agreement or the date so
----------
referred to in a confirmation relating to the financial covenants
given by the Auditor pursuant to ss. 16.2.2 of the Loan Agreement, in
----------
each case after the Completion Date.
"Financing Documents" means, collectively, the Loan Agreement, this
-------------------
Agreement, the Sponsors' Guaranty, the Sponsors' Subordination Agreement, the
AMD Inc. Subordination Agreement, the Sponsors' Loan Agreement, the AMD
Saxonia/Dresdner Subsidy Agreement, the SAB/Dresdner Subsidy Agreement, the
65/35 Burgschaft, the AMD Saxonia Hedging Contract, the Security Documents, each
Consent and Agreement, and each other
12
<PAGE>
instrument or document designated by the Agent (with the consent of each AMD
Company) as a Financing Document under and for purposes of this Agreement.
"Fiscal Month" means any fiscal month of a Fiscal Year.
------------
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
--------------
"Fiscal Year" means any period of approximately 12 consecutive calendar
-----------
months ending on the last Sunday in December; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "1997 Fiscal Year") refer
to the Fiscal Year ending on the last Sunday in December occurring during such
calendar year.
"Fixed Charge Coverage Ratio" has the meaning assigned to that term in
---------------------------
ss.1 of Schedule 17 to the Loan Agreement.
---- -----------
"GAAP" means, (x) in the case of AMD Saxonia or AMD Holding or its
----
respective financial statements, those generally accepted accounting principles
in general use by the accounting profession (Grundsatze ordnungsgemasser
Buchfuhrung und Bilanzierung) and in effect on the Loan Agreement Effective Date
in Germany (it being expressly understood and agreed that AMD Saxonia's and AMD
Holding's monthly and quarterly financial statements shall be prepared on the
basis of a Fiscal Month or a Fiscal Quarter (rather than on the basis of a
calendar month or a calendar quarter, as the case may be), but shall be
reconciled on an annual basis), and (y) in the case of AMD Inc. or its financial
statements, generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Approvals" means each and every authorization, consent,
----------------------
approval, licence, permit, franchise, certificate, exemption or order of or
filing or registration with, any Governmental Authority or legal or regulatory
body, federal, state, local or foreign except for (i) routine or periodic
information reports which, if not filed, would not in any case or in the
aggregate, adversely affect the due authorization, execution, delivery,
validity, legality, or enforceability of any of the Operative Documents, (ii)
filings of certificates or articles of incorporation, registrations or
qualifications of a foreign corporation or similar corporate filings, and (iii)
returns and filings with respect to taxes.
"Governmental Authority" means any nation or government, any state or other
----------------------
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
13
<PAGE>
"Guarantors" means the Federal Republic of Germany and the Free State of
----------
Saxony in their respective capacities as guarantors pursuant to the 65/35
Burgschaft.
"Guaranty Decision" means the decision dated 2 July 1996 set out in
-----------------
Schedule 24 to the Loan Agreement concerning the guaranty application made by
-----------
AMD Saxonia, including the following documents as referred to therein:
(i) the specimen credit agreement F 13.09.1990 (1993 Edition)
Federal/State or THA
(ii) the General Terms and Conditions applicable to the assumption of
Guaranties by the Federal Republic of Germany and the States of the
Accession Territory (States) in the edition dated F 04.01.1993
Federal/State, together with
(iii) Notes relating to applications for guaranties and loans of the
Treuhandanstalt Berlin and/or Federal and State guaranties for
projects in the Accession Territory in the edition dated 1993 F
12.10.1990.
"Indebtedness" of any Person, means, without duplication:
------------
(i) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, or similar
instruments;
(ii) all obligations, contingent or otherwise, relative to the face amount
of all letters of credit, guarantees, and bankers' acceptances issued
for the account of such Person, whether or not drawn or paid;
(iii) all obligations of such Person as lessee under leases which have been
or should be, in accordance with GAAP, recorded as Capitalised Lease
Liabilities;
(iv) all net liabilities of such Person under or in connection with any
interest rate, currency, commodity, or other hedging contracts to
which such Person is a party;
(v) all other items which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person
as of the date at which Indebtedness is to be determined;
(vi) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (including pre-paid interest
thereon) secured by an Encumbrance on property owned or being
purchased by such Person
14
<PAGE>
(including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse; and
(vii) all Contingent Liabilities of such Person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer, respectively.
"Information Memorandum" means the Information Memorandum, dated September
----------------------
1996, entitled "AMD Saxony Manufacturing GmbH, Dresden: DM1,650,000,000
Information Memorandum Limited Recourse Financing", prepared and furnished by
the AMD Companies to the Agent, for distribution to prospective lenders under
the Loan Agreement, as such Information Memorandum may at any time be amended or
modified with the consent of each AMD Company and in effect.
"Initial Cash Balance" means, as at the Completion Date, the cash balance
--------------------
in the Project Accounts together with the then aggregate value of all Cash
Equivalent Investments.
"Instructing Group" means in respect of any matter, the Banks whose votes
-----------------
are required to pass a resolution on such matter as determined in accordance
with ss.ss. 22.5 and 22.6 of the Loan Agreement.
"License Agreement" means the License Agreement, in the form set out in
-----------------
Schedule 38 to the Loan Agreement, between AMD Inc., AMD Holding, and AMD
-----------
Saxonia.
"Loan Agreement" has the meaning assigned to that term in the second
-------------- ------
recital of this Agreement.
-------
"Loan Agreement Effective Date" means the date specified by the Agent in a
-----------------------------
notice given to the parties hereto as being the first date on or as of which (i)
the Loan Agreement has been executed and delivered by each of the respective
parties thereto, and (ii) the Agent has received each of the documents referred
to in ss.ss. 5.1.1 to 5.1.16 of the Loan Agreement, in each case in the form,
------------ ------
and with the substance, specified therein.
"Loan Agreement Termination Date" has the meaning assigned to that term in
-------------------------------
Section 15.7.
------------
"Management Plan" means the project concept dated February 1997, and
---------------
attached as Schedule 14 to the Loan Agreement, as the same may from time to time
-----------
be further amended or modified by AMD Saxonia (with the consent of each Sponsor,
whose consent will not be unreasonably delayed or withheld) in accordance with
the terms of this Agreement and the Loan Agreement and in effect.
15
<PAGE>
"Management Service Agreement" means the Amended and Restated Management
----------------------------
Service Agreement, in the form set out in Schedule 37 to the Loan Agreement,
-----------
between AMD Inc., AMD Holding, and AMD Saxonia.
"Material Adverse Effect" means
-----------------------
(i) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or otherwise),
or prospects of any AMD Company, or of AMD Inc. and its Subsidiaries,
taken as a whole;
(ii) with respect to the Contractor, a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise), or prospects of the Contractor
and its Subsidiaries, taken as a whole;
(iii) with respect to an Equipment Supplier, a material adverse change in,
or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise), or prospects of such
Equipment Supplier and its Subsidiaries, taken as a whole;
(iv) with respect to a Service Supplier, a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise), or prospects of such Service
Supplier and its Subsidiaries, taken as a whole;
(v) a material impairment of the ability of any AMD Company, the
Contractor, any Equipment Supplier, or any Service Supplier to
perform its obligations under any Operative Document to which it is
or is to be a party; or
(vi) a material adverse effect upon (i) the legality, validity, binding
effect, or enforceability against any AMD Company, the Contractor,
any Equipment Supplier, or any Service Supplier of any Operative
Document, or (ii) the perfection or priority of any Security granted
under any of the Security Documents;
provided, however, that with respect to an event described in clause (ii),
----------------- -----------
(iii), (iv), or, with respect to the Contractor, an Equipment Supplier, or a
-----------
Service Supplier, clause (v) or (vi) above, such event could reasonably be
------------------
expected to have a material adverse consequence to the entirety of the
transactions contemplated by the Operative Documents.
"Material AMD Inc. Subsidiary" means, at any time, any Subsidiary of AMD
----------------------------
Inc. having at such time (either on an individual basis or on a consolidated
basis for such Subsidiary and its Subsidiaries) either:
16
<PAGE>
(i) total (gross) revenues for the preceding four Fiscal Quarter period in
excess of 5% of gross revenues for AMD Inc. and its Subsidiaries on a
consolidated basis for such period, or
(ii) total assets, as of the last day of the preceding Fiscal Quarter,
having a net book value in excess of 5% of total assets for AMD Inc.
and its Subsidiaries on a consolidated basis as of such date,
in each case, based on the then most recent annual or quarterly financial
statements delivered to the Agent hereunder; provided, however, that AMD Saxonia
-------- -------
and AMD Holding shall, for purposes of this Agreement, each be deemed to be a
Material AMD Inc. Subsidiary.
"Material Equipment Supply Contract" means each Equipment Supply Contract:
----------------------------------
(i) pursuant to which AMD Saxonia incurs obligations in aggregate in
excess of DM 3,750,000, or
(ii) which has an initial term in excess of 12 months, or which has an
indefinite term and, in either case, cannot be terminated by AMD
Saxonia on less than 12 months' notice, or
(iii) which is listed in Part I of Schedule 40 to the Loan Agreement.
"Material Service Contract" means each Service Contract (with the exception
-------------------------
of the AMD Saxonia Wafer Purchase Agreement, the Management Service Agreement
and employment contracts):
(i) pursuant to which AMD Saxonia incurs obligations in aggregate in
excess of DM 2,500,000 during the term of the contract, or
(ii) which has an initial term in excess of 12 months, or which has an
indefinite term and, in either case, cannot be terminated by AMD
Saxonia on less than 12 months' notice, or
(iii) which is listed in Part I of Schedule 40 to the Loan Agreement.
"Operating Account" means the account or accounts referred to and opened
-----------------
pursuant in ss. 19.1 of the Loan Agreement (including any sub-accounts into
--------
which any such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.
"Operative Documents" means, collectively, the Project Agreements, the
-------------------
Financing Documents, the AMD Inc. Primary Bank Credit Agreement, the AMD Inc.
Senior Secured Note Indenture, the Management Plan, each Project Budget, each
Project Schedule, each
17
<PAGE>
Approved Project Budget, each Approved Project Schedule, the Information
Memorandum, the Completion Certificates, the Compliance Certificates, and each
other instrument or document designated by the Agent (with the consent of each
AMD Company) as an Operative Document under and for purposes of this Agreement.
"Opinion Reservations" means limitations on the enforceability of legal
--------------------
documents as a matter of German law or the law of the United States of America
or one of its states and as incorporated as qualifications to an enforceability
opinion in the legal opinions delivered to and accepted by the Agent under and
pursuant to ss. 5.1.11 of the Loan Agreement.
----------
"Organizational Documents" means, with respect to any AMD Company, its
------------------------
certificate of incorporation, Memorandum and Articles of Association, charter,
by-laws, and (except with respect to AMD Inc.) all shareholder agreements,
voting trusts, and similar arrangements applicable to any of its authorised
shares of capital stock.
"Paying Agent" has the meaning assigned to that term in the second recital
------------ --------------
of this Agreement.
"Perform in Accordance with the Plans and Specifications" means, for
-------------------------------------------------------
purposes of the Technical Completion tests, and when used for the period from
and after Technical Completion, the performance by the Plant, on a substantially
continuous basis substantially as intended under normal operating conditions, of
the functions for which it was designed in accordance with the Plans and
Specifications. In order to certify that the Plant is capable of performing
substantially as intended under normal operating conditions, the Technical
Advisor will during normal operations of the Plant (and without, to the extent
practicable, disrupting production at the Plant), observe the operation of the
Plant and its component parts to determine if the Plant and its component parts
(except for uninstalled spares):
(x) are in operation and performing normally; and
(y) demonstrate as a whole the operation of the principal component parts
of the Plant at production rates consistent with the design capacity
of the Plant (as observed by the Technical Advisor from the operating
log sheets and such other data as may be reasonably available and is
demonstrated from AMD Saxonia's operating reports, copies of which
will be obtained by the Technical Advisor).
The Technical Advisor will not be required to conduct specific tests on
individual pieces of the Plant or its component parts in making this
determination. In order to certify that the Plant has met the tests, or has
demonstrated performance equivalent to the tests, set forth in the definition
"Perform in Accordance with the Plans and Specifications", the Technical Advisor
will:
18
<PAGE>
(i) in the case of demonstrated performance equivalent to the tests of the
Plant (or portion thereof), obtain and rely on copies of, review, and
analyze, AMD Saxonia's operating data comprising, but not limited to,
daily log sheets, yield test results, and product shipments and, based
upon the foregoing, will determine if the Plant (or such portion) has
demonstrated its required performance; and
(ii) in the case of a formal test run, observe the operations during normal
business hours to verify the operating rates and time of operation and
obtain and rely on copies of and review and analyse AMD Saxonia's
operating data (as specified in clause (i) above) to independently
determine if the Plant (or portion thereof) has demonstrated its
required performance.
"Permitted Encumbrances" means, (i) in the case of AMD Saxonia or AMD
----------------------
Holding, any Encumbrance arising by operation of law in the ordinary course of
business, Encumbrances arising in the ordinary course of business as a result of
a supplier retaining title to goods supplied pending payment for such goods, and
Encumbrances on the Security pursuant to the Security Documents, and (ii) in the
case of AMD Inc. or any Subsidiary of AMD Inc. (other than AMD Saxonia or AMD
Holding), a "Permitted Lien" under, and as defined in, the AMD Inc. Primary Bank
Credit Agreement.
"Person" means an individual or a corporation, partnership, trust,
------
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof), or other juridical
entity of any kind.
"Plans and Specifications" means the plans and specifications to be
------------------------
prepared by AMD Saxonia and approved by each of the Sponsors (which approval
shall not be unreasonably delayed or withheld), the Technical Advisor, and the
Agent for the fitting out of the Plant and the Design Center, as the same may be
amended by AMD Saxonia from time to time with the consent of each Sponsor and
the Agent (which consent, in the case of each Sponsor, shall not be unreasonably
delayed or withheld); provided, that amendments to the plans and specifications
which do not, individually or in the aggregate, reduce or adversely affect the
value of the Plant and the Design Center in any material respect or the capacity
and purpose of the Plant as set out in the plans and specifications as
originally approved by the Technical Advisor and the Agent for purposes of the
Operative Documents shall not require the consent of the Agent.
"Plant" means the advanced silicon wafer production facility constructed or
-----
to be constructed by AMD Saxonia in or near Dresden, Germany to manufacture
integrated circuits in wafer form using high-volume semi-conductor wafer
fabrication processes.
19
<PAGE>
"Primary Secured Obligations" means, at the time any determination thereof
---------------------------
is to be made, all Secured Obligations then owing and, whether or not then
owing, all Secured Obligations in respect of the principal of and interest on
the Advances.
"Project" has the meaning assigned to that term in the first recital of
------- -------------
this Agreement.
"Project Accounts" means the Debt Service Reserve Account and the Operating
----------------
Account.
"Project Agreements" means, collectively, the Wafer Purchase Agreements,
------------------
the Research Agreements, the Management Service Agreement, the License
Agreement, the Design/Build Agreement, the Equipment Supply Contracts, the
Service Contracts, the AMD Inc. Guaranty, and each other instrument or document
designated by the Agent (with the consent of each AMD Company) as a Project
Agreement under and for purposes of this Agreement.
"Project Budget" means the budget, in the form set out in Schedule 6 to the
-------------- ----------
Loan Agreement, with such changes (if any) to its form as the Agent may from
time to time reasonably require, of projected Capital Expenditure for the
implementation of the Project and the Project Phases in the implementation of
the Project, including a detailed projected sources and uses of funds statement,
broken down for each Project Phase on a Fiscal Quarter by Fiscal Quarter basis,
as prepared by AMD Saxonia and approved by each Sponsor in accordance with the
Management Plan and the Project Schedule, such approval not to be unreasonably
withheld or delayed.
"Project Costs" means all Capital Expenditure and other costs of the kind
-------------
referred to in the Approved Project Budget which are incurred by AMD Saxonia in
connection with the Project up to Completion.
"Project Phase" means each project phase set out in the Approved Project
-------------
Schedule contemplated for the implementation of the Project.
"Project Schedule" means the schedule, in the form set out in Schedule 7 to
---------------- ----------
the Loan Agreement, with such changes (if any) to its form as the Agent may from
time to time reasonably require, of Project Phases to be achieved during the
construction of the Project prior to Completion, as prepared by AMD Saxonia and
approved by each Sponsor, such approval not to be unreasonably withheld or
delayed.
"Projected Total Cost" means, at the time any determination thereof is to
--------------------
be made, the sum (without duplication) of
(i) the Capital Expenditure then or theretofore made or accrued,
plus
----
20
<PAGE>
(ii) the Cost to Complete at such time.
"Relevant AMD Inc. Individual" means any Vice President or more senior
----------------------------
officer of AMD Inc., some or all of whose responsibilities include the Project.
"Requirements of Law" means, with respect to any Person, any law (statutory
-------------------
or common), treaty, rule, or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Research Agreements" means, collectively, the AMD Saxonia Research
-------------------
Agreement and the AMD Holding Research Agreement.
"SAB" means Sachsische Aufbaubank GmbH, a Gesellschaft mit beschrankter
---
Haftung organised and existing under the laws of Germany and registered in
Dresden, Germany, acting on behalf of the Free State of Saxony.
"SAB Related Agreements" means the AMD Saxonia/Dresdner Subsidy Agreement
----------------------
and the SAB/Dresdner Subsidy Agreement, collectively.
"SAB/Dresdner Subsidy Agreement" means the Agreement, in the form set out
------------------------------
in Schedule 26 to the Loan Agreement, between SAB and Dresdner.
-----------
"Same Day Funds" means, at the time of any determination, funds which are
--------------
immediately available to AMD Saxonia.
"Scheduled Project Phase Completion Certificates" means the Scheduled
-----------------------------------------------
Project Phase Technical Completion Certificate (Obligors) and the Scheduled
Project Phase Technical Completion Certificate (Technical Advisor).
"Scheduled Project Phase Technical Completion" when used with reference to
--------------------------------------------
a Project Phase, shall be deemed to have occurred when:
(i) all of the conditions set forth in the form of Scheduled Project Phase
Technical Completion Certificate (Obligors) attached to the Loan
Agreement as Schedule 9 thereto have been satisfied in all material
----------
respects, all of the statements appearing in said form of Certificate
are true and correct in all material respects, in each case with
respect to such Project Phase, and the Agent shall have received a
fully executed counterpart of such Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Scheduled Project Phase Technical Completion Certificate (Technical
Advisor).
21
<PAGE>
"Scheduled Project Phase Technical Completion Certificate (Obligors)" means
-------------------------------------------------------------------
a Certificate, in the form set out in Schedule 9 to the Loan Agreement
----------
(appropriately completed), executed by the AMD Companies, and delivered to the
Agent.
"Scheduled Project Phase Technical Completion Certificate (Technical
-------------------------------------------------------------------
Advisor)" means a Certificate, in the form set out in Schedule 10 to the Loan
-------- -----------
Agreement (appropriately completed), executed by the Technical Advisor, and
delivered to the Agent.
"Secured Obligations" means all actual and contingent obligations of AMD
-------------------
Saxonia to the Secured Parties under or arising out of the Financing Documents
and the Security Documents.
"Secured Parties" means the Agent, the Paying Agent, the Security Agent,
---------------
and the Banks, collectively.
"Security" means, collectively, the AMD Inc. Security, the AMD Holding
--------
Security, and the AMD Saxonia Security.
"Security Agent" has the meaning assigned to that term in the introduction
--------------
to this Agreement.
"Security Documents" means, collectively, the AMD Saxonia Security
------------------
Documents, the AMD Holding Security Documents, the AMD Inc. Share Pledge
Agreement, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as a Security Document under and for purposes
of this Agreement.
"Service Suppliers" means, collectively, each Person party to a contract or
-----------------
other agreement with AMD Saxonia in the capacity of a supplier of services for
the Plant or the Design Center.
"Service Supplier's Consent and Agreement" means, with respect to a Service
----------------------------------------
Supplier, such Service Supplier's Consent and Agreement, in the form set out in
Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 of the Loan
----------- -----------
Agreement, as the case may be, or such other form as is consented to by the
Security Agent, which pertains to a Material Service Contract or which is
otherwise required pursuant to the terms of the Loan Agreement or the Security
Documents.
"Service Contract" means each agreement (which may be in the form of an
----------------
accepted order) between AMD Saxonia and a Service Supplier relating to the
acquisition by, and delivery to, AMD Saxonia of services for the Project.
"65/35 Burgschaft" means the several maximum amount shortfall guaranties
----------------
issued by each of the Free State of Saxony (26%) and the Federal Republic of
Germany (39%) in accordance with the Guaranty Decision up to a maximum aggregate
amount of DM
22
<PAGE>
1,072,500,000 (one billion seventy-two million five hundred thousand Deutsche
Marks), together with 65% of the shortfall of interest and costs, vested with a
first right of satisfaction in favour of the Banks over all security granted by
each AMD Company as security for the Banks' risk of recovery.
"Sponsors" has the meaning assigned to that term in the introduction to
-------- ------------
this Agreement.
"Sponsors' Applicable Share" means the applicable share of a Cost Overrun
--------------------------
determined in accordance with Section 4.2.
-----------
"Sponsors' Consent and Agreement" means the Sponsors' Consent and
-------------------------------
Agreement, in the form set out in Schedule 31 to the Loan Agreement, between the
-----------
Sponsors, the Agent, and the Security Agent.
"Sponsors' Disclosure Schedule" means the Disclosure Schedule attached as
-----------------------------
Schedule II, as it may be amended, supplemented, or otherwise modified from time
-----------
to time by the Sponsors with the written consent of the Agent.
"Sponsors' Guaranty" means the Sponsors' Guaranty, in the form set out in
------------------
Schedule 32 to the Loan Agreement, executed by the Sponsors in favour of the
-----------
Agent and the Security Agent for the benefit of the Secured Parties.
"Sponsors' Loan Agreement" means the Sponsors' Loan Agreement, in the form
------------------------
set out in Schedule 29 to the Loan Agreement, between the Sponsors, as lenders,
-----------
and AMD Saxonia, as borrower.
"Sponsors' Loans" means all loans made or to be made by AMD Inc. or AMD
---------------
Holding to AMD Saxonia in accordance with the terms of the Sponsors' Loan
Agreement, which loans are subordinated in accordance with the Sponsors'
Subordination Agreement.
"Sponsors' Subordination Agreement" means the Sponsors' Subordination
---------------------------------
Agreement, in the form set out in Schedule 30 to the Loan Agreement, executed by
-----------
the Sponsors, AMD Saxonia, and the Security Agent.
"Sponsors' Warranty Date" means each of the following dates which occurs
-----------------------
prior to the exercise of rights by the Security Agent under any of the Security
Documents: (i) the Loan Agreement Effective Date, (ii) each date AMD Saxonia
delivers a notice of drawing for an Advance under the Loan Agreement, (iii) each
date the AMD Companies deliver each Scheduled Project Phase Technical Completion
Certificate (Obligors), (iv) the date of Technical Completion, (v) the date of
Financial Completion, and (vi) each date the Sponsors deliver the certificate
referred to in Section 13.1(i)(c).
------------------
23
<PAGE>
"Subsidiary" means with respect to (i) any Person organised and existing
----------
under the laws of the Federal Republic of Germany, a subsidiary within the
meaning of the term "abhangiges Unternehmen" in ss. 17 of the German Stock
Corporation Act (Aktiengesetz); and (ii) any other Person, a corporation or
other entity of which such Person or such Person and/or such Person's other
Subsidiaries own, directly or indirectly, more than 50% of the ordinary voting
power for the election of directors or others performing similar functions.
"Subsidies" has the meaning assigned to that term in Section 6.1.
--------- -----------
"Taxes" has the meaning assigned to that term in Section 14.5(a).
----- ---------------
"Technical Advisor" means Fraunhofer Institut fur Siliziumtechnologie,
-----------------
Itzehoe, or such other technical advisor as may be appointed by the Security
Agent with the consent of each AMD Company, which consent shall not be
unreasonably delayed or withheld.
"Technical Advisor's Report" means that certain report dated October 16,
--------------------------
1996 from the Technical Advisor to the Agent prepared for purposes of this
Agreement and the other Operative Documents and the transactions contemplated
hereby and thereby.
"Technical Completion" shall be deemed to have occurred when:
--------------------
(i) all of the conditions set forth in the form of Technical Completion
Certificate (Obligors) attached to the Loan Agreement as Schedule 9
----------
thereto have been satisfied in all material respects, all of the
statements appearing in said form of Certificate are true and correct
in all material respects, and the Agent shall have received a fully
executed counterpart of such Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Technical Completion Certificate (Technical Advisor).
"Technical Completion Certificates" means the Technical Completion
---------------------------------
Certificate (Obligors) and the Technical Completion Certificate (Technical
Advisor).
"Technical Completion Certificate (Obligors)" means a certificate, in the
-------------------------------------------
form set out in Schedule 9 to the Loan Agreement (appropriately completed and
----------
with the legal opinion therein referred to attached), executed by the AMD
Companies, and delivered to the Agent.
"Technical Completion Certificate (Technical Advisor)" means a certificate,
----------------------------------------------------
in the form set out in Schedule 10 to the Loan Agreement (appropriately
-----------
completed), executed by the Technical Advisor, and delivered to the Agent.
24
<PAGE>
"Total Tranche A Commitment Amount" means DM 1,500,000,000 (one billion
---------------------------------
five hundred million Deutsche Marks), as such amount shall be reduced by any
reductions to (but not utilizations of) the commitments of the Banks under
"Facility A" under the Loan Agreement.
"Total Tranche B Commitment Amount" means DM 150,000,000 (one hundred fifty
---------------------------------
million Deutsche Marks), as such amount shall be reduced by any reductions to
(but not utilizations of) the commitments of the Banks under "Facility B" under
the Loan Agreement.
"Tranche A Advances" means Advances made by the Banks or any Bank pursuant
------------------
to "Facility A" under the Loan Agreement.
"Tranche B Advances" means Advances made by the Banks or any Bank pursuant
------------------
to "Facility B" under the Loan Agreement.
"Uneven Capacity Allocation" has the meaning assigned to that term in the
--------------------------
AMD Saxonia Wafer Purchase Agreement.
"Unmatured Event of Default" means an event or circumstance which, with the
--------------------------
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"Wafer" has the meaning assigned to that term in the AMD Saxonia Wafer
-----
Purchase Agreement.
"Wafer Fabrication Plant" has the meaning assigned to that term in the AMD
-----------------------
Saxonia Wafer Purchase Agreement.
"Wafer Purchase Agreements" means, collectively, the AMD Saxonia Wafer
-------------------------
Purchase Agreement and the AMD Holding Wafer Purchase Agreement.
SECTION 1.2 Accounting and Financial Determinations. Unless otherwise specified,
all accounting terms used herein shall be interpreted, all accounting
determinations and computations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with, GAAP. When used herein, the term "financial statements" shall include the
notes and schedules thereto, but need not include such notes or schedules when
used with reference to such statements of any Person as of any date other than
the end of a Fiscal Year of such Person. In the determination of any periods
pursuant to any provision hereof, unless otherwise specified, the term "from"
means "from (and including)", the term "to" means "to (and excluding)", and the
term "until" means "until (and excluding)".
25
<PAGE>
SECTION 1.3 Construction. In this Agreement, unless the context requires
otherwise, any reference to:
"assets" includes any asset, property, or right and includes uncalled
------
capital;
"including" or "includes" means including or includes without limitation;
--------- --------
"law" and/or "regulation" includes any constitutional provision, treaty,
--- ----------
convention, statute, act, law, decree, ordinance, subsidiary or subordinate
legislation, order, rule, or regulation having the force of law, and any rule of
civil or common law or equity;
"order" includes any judgment, injunction, decree, determination, or award
-----
of any court, arbitration, or administrative tribunal;
"tax" includes any tax, levy, duty, charge, impost, fee, deduction, or
---
withholding of any nature now or hereafter imposed, levied, collected, withheld,
or assessed by any taxing or other authority and includes any interest, penalty,
or other charge payable or claimed in respect thereof, and "taxation" shall be
--------
construed accordingly; and
"winding-up" includes any winding-up, liquidation, dissolution, or
----------
comparable process in any jurisdiction.
SECTION 1.4 Miscellaneous. In this Agreement, unless the context requires
otherwise, (i) any reference to an Operative Document shall be to such Operative
Document as the same may have been or from time to time may be amended, varied,
re-issued, replaced, novated or supplemented, in each case in accordance with
the terms thereof and hereof, and in effect; (ii) any statutory provisions shall
be construed as references to those provisions as amended, modified, re-enacted,
or replaced from time to time; (iii) words importing a gender include every
gender; (iv) references to Sections and Schedules are to Sections of and
Schedules to this Agreement; and (v) references to this Agreement include its
Schedules. Section headings are inserted for reference only and shall be ignored
in construing this Agreement. A time of day, unless otherwise specified, shall
be construed as a reference to Frankfurt am Main time.
ARTICLE II
Contribution of Equity Capital
SECTION 2.1 Undertaking to Contribute. AMD Holding hereby undertakes to
contribute to AMD Saxonia, and AMD Inc. hereby undertakes to cause AMD Holding
to so contribute to AMD Saxonia (and AMD Inc. shall, to the extent necessary,
contribute sufficient funds, or otherwise cause sufficient funds to be made
available, to AMD Holding as shall be necessary to enable AMD Holding to so
contribute to AMD Saxonia), Equity Capital at the times and in the amounts set
forth in Section 2.2. For the avoidance of doubt:
-----------
26
<PAGE>
(i) to the extent, but only to the extent, reflected in AMD Saxonia's
financial statements referred to in ss. 15.1.6 of the Loan Agreement
----------
(or, if not so reflected, as certified by AMD Inc. to the Agent and
the Security Agent as of the Loan Agreement Effective Date), amounts
contributed by the Sponsors to AMD Saxonia prior to the Loan
Agreement Effective Date shall be taken into account in determining
whether the Sponsors shall have complied with their obligations under
this Article II;
----------
(ii) the obligations of the Sponsors contained in this Article II are in
----------
addition to, and not in limitation of, their respective obligations
contained elsewhere in this Agreement and in the other Operative
Documents;
(iii) the Sponsors shall not be relieved of the foregoing obligations by
virtue of:
(a) any Sponsors' Loan made by either Sponsor pursuant to this
Agreement or the Sponsors' Loan Agreement; or
(b) any payment made by either Sponsor under the Sponsors' Guaranty;
and
(iv) the amounts set forth in Section 2.2 below are minimum aggregate
-----------
amounts of Equity Capital to be received by AMD Saxonia; nothing
contained herein shall be deemed to preclude AMD Holding from making
additional contributions to AMD Saxonia's stated capital or capital
reserves in order to fulfil the obligations of the Sponsors contained
in Article IV, V, VI, or VII, or for any other reason.
-------------------------
SECTION 2.2 Time of Contribution. The Equity Capital to be contributed to AMD
Saxonia under this Article II is due and payable to AMD Saxonia as follows:
(i) one or more instalments aggregating DM 108,750,000 (one hundred eight
million seven hundred fifty thousand Deutsche Marks) on or before the
date of the initial Advance under the Loan Agreement; it being
understood and agreed that, to the extent, but only to the extent,
reflected in AMD Saxonia's financial statements referred to
in ss.15.1.6 of the Loan Agreement (or, if not so reflected, as
---------
certified by AMD Inc. to the Agent and the Security Agent as of the
Loan Agreement Effective Date), all contributions to the Equity
Capital of AMD Saxonia prior to Loan Agreement Effective Date shall be
considered contributions to its Equity Capital for purposes of this
Section 2.2(i); and
--------------
(ii) in addition to the Equity Capital contributed or to be contributed
pursuant to Section 2.2(i) hereof, one or more additional instalments
--------------
aggregating
27
<PAGE>
DM 108,750,000 (one hundred eight million seven hundred fifty thousand
Deutsche Marks) by the earlier to occur of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be contributed to AMD Saxonia under
this Section 2.2(ii), such contribution shall be made in an
---------------
amount which, when added to the aggregate amount of all Sponsors'
Loans and/or other contributions to AMD Saxonia's Equity Capital
or capital reserves then concurrently made, is equal to the
Primary Secured Obligations at such time); and
(b) December 31 1997;
provided, however, that such Equity Capital shall be required to be
-----------------
contributed in whole or in part at any time prior to such dates if,
but only to the extent that, the ratio of:
(x) the sum of
(1) the then aggregate outstanding principal amount of Sponsors'
Loans,
plus
----
(2) the then aggregate amount of AMD Saxonia's Equity Capital
and capital reserves,
to
(y) the then aggregate outstanding principal amount of the Advances,
is less than 25:75.
SECTION 2.3 Form of Contribution. The Equity Capital under this Article II shall
----------
be contributed in cash and in Same Day Funds to AMD Saxonia.
28
<PAGE>
ARTICLE III
Sponsors' Loans
SECTION 3.1 Undertaking to Make Class A and Class B Sponsors' Loans. The
Sponsors, jointly and severally, hereby undertake that either Sponsor or both of
the Sponsors will make Sponsors' Loans to AMD Saxonia:
(i) in an aggregate principal amount of at least DM 290,000,000 (two
hundred ninety million Deutsche Marks) for all such Sponsors' Loans,
the exact amount thereof being equal to the Deutsche Mark Equivalent
of $200,000,000 (two hundred million Dollars) for all such Sponsors'
Loans, as contemplated by Section 3.2 (the "Class A Sponsors' Loans");
----------- -----------------------
and
(ii) in an aggregate principal amount of up to an additional DM 145,000,000
(one hundred forty five million Deutsche Marks) as contemplated by
Section 3.3 (the "Class B Sponsors' Loans").
----------- -----------------------
For the avoidance of doubt:
(i) the obligations of the Sponsors under the Sponsors' Loan Agreement
are intended to reflect, rather than to be in addition to, the
obligations of the Sponsors pursuant hereto;
(ii) to the extent, but only to the extent, reflected in AMD Saxonia's
financial statements referred to in ss.15.1.6 of the Loan Agreement
---------
(or, if not so reflected, as certified by AMD Inc. to the Agent and
the Security Agent as of the Loan Agreement Effective Date),
Sponsors' Loans and/or contributions (to the extent, but only to the
extent, not otherwise taken into account in determining whether AMD
Holding has complied with its obligations under Article II) by AMD
Holding to AMD Saxonia's capital reserves made to AMD Saxonia prior
to the Loan Agreement Effective Date shall be taken into account as
Class A Sponsors' Loans in determining whether the Sponsors shall
have complied with their obligations under this Article III;
-----------
(iii) although the obligations of the Sponsors contained in this Article
-------
III are in addition to, and not in limitation of, their respective
---
obligations contained elsewhere in this Agreement and in the other
Operative Documents, if the Agent shall have otherwise expressly
consented thereto in writing (which consent will not be unreasonably
withheld or delayed), the Sponsors shall be deemed to have complied
with their obligations to make Class A Sponsors' Loans and/or Class B
Sponsors' Loans to the extent, but only to the extent, that AMD
Holding shall have made additional contributions to AMD Saxonia's
Equity Capital (or other contribution to AMD Saxonia's
29
<PAGE>
capital reserves) which contributions are not otherwise required to
be made pursuant hereto or to any other Operative Document;
(iv) the Sponsors shall not be relieved:
(a) of the foregoing obligation by virtue of any Equity Capital (or
other contribution to AMD Saxonia's capital reserves) contributed
or required to be contributed to AMD Saxonia pursuant to Section
-------
2.1 or (except as, and to the extent, provided in clause (iii)
--- ------------
above) otherwise;
(b) of any obligation to make Class A Sponsors' Loans (or to
contribute additional Equity Capital or other contributions to
AMD Saxonia's capital reserves in lieu thereof) by virtue of any
payment made by either Sponsor under the Sponsors' Guaranty; or
(c) of any obligation following Completion to make Class B Sponsors'
Loans until and unless the Sponsors shall have paid all amounts
payable under the Sponsors' Guaranty following a demand for
payment made by the Agent thereunder (it being understood and
agreed that the obligation of the Sponsors to make Class B
Sponsors' Loans shall be subject to the occurrence of
Completion);
(v) each Class A Sponsors' Loan shall be denominated in Deutsche Marks and
the Deutsche Mark Equivalent thereof shall be calculated for the
purpose of determining whether the Sponsors have complied with their
obligations under Section 3.2; provided, however, that any Class A
----------- -------- -------
Sponsors' Loan may, with the consent of the Agent (such consent not to
be unreasonably delayed or withheld), be funded in Dollars but for all
purposes of this Agreement and the Sponsors' Loan Agreement shall be
deemed to have been funded in Deutsche Marks in an amount which is
equal to the Deutsche Mark Equivalent thereof; and
(vi) the amounts set forth in this Section 3.1 are cumulative minimum
-----------
aggregate amounts for both Sponsors, collectively; nothing contained
herein shall be deemed to preclude the Sponsors (or either of them)
from making additional Sponsors' Loans in order to fulfil their
respective obligations contained in Article IV, V, VI, or VII, or for
-------------------------
any other reason.
SECTION 3.2 Time of Class A Sponsors' Loans. The Class A Sponsors' Loans will be
made in cash and in Same Day Funds and will be made as follows:
(i) at least DM 145,000,000 (one hundred forty five million Deutsche
Marks) for all such Class A Sponsors' Loans, the exact amount thereof
being equal
30
<PAGE>
to the Deutsche Mark Equivalent of $100,000,000 (one hundred million
Dollars) for all such Class A Sponsors' Loans, by the earlier to occur
of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be lent to AMD Saxonia under this
Section 3.2(i), the amount of such Class A Sponsors' Loans shall
--------------
be an amount which, when added to the aggregate amount of all
Sponsors' Loans and/or other contributions to AMD Saxonia's
Equity Capital or capital reserves then concurrently made, is
equal to the Primary Secured Obligations at such time); and
(b) December 31, 1998; and
(ii) at least a further DM 145,000,000 (one hundred forty five million
Deutsche Marks) for all such Class A Sponsors' Loans, the exact amount
thereof being equal to the Deutsche Mark Equivalent of $100,000,000
(one hundred million Dollars) for all such Class A Sponsors' Loans, by
the earlier to occur of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be lent to AMD Saxonia under this
Section 3.2(ii), the amount of such Class A Sponsors' Loans shall
be an amount which, when added to the aggregate amount of all
Sponsors' Loans and/or other contributions to AMD Saxonia's
Equity Capital or capital reserves then concurrently made, is
equal to the Primary Secured Obligations at such time); and
(b) December 31, 1999;
provided, however, that such Class A Sponsors' Loans shall be required to be
-----------------
made in whole or in part at any time prior to the aforesaid dates if, but only
to the extent that, the ratio of:
(x) the sum of
(1) the then aggregate outstanding principal amount of Sponsors'
Loans,
plus
----
31
<PAGE>
(2) the then aggregate amount of AMD Saxonia's Equity Capital
and capital reserves,
to
--
(y) the then aggregate outstanding principal amount of the Advances
under the Loan Agreement,
is less than 25:75.
SECTION 3.3 Time of Class B Sponsors' Loans. The Class B Sponsors' Loans will be
made in cash and in Same Day Funds and will be made upon first written demand by
the Security Agent to the extent necessary to remedy any shortfall in the Fixed
Charge Coverage Ratio as required by the Security Agent at any time and from
time to time following Completion if, on or as of a Financial Ratio Calculation
Date, AMD Saxonia's Fixed Charge Coverage Ratio is less than 125%.
SECTION 3.4 Additional Sponsors' Loans. In addition to the Class A Sponsors'
Loans and the Class B Sponsors' Loans, the Sponsors (or either of them) may,
from time to time, at their option make additional Sponsors' Loans in order to
fulfil their respective obligations contained herein or otherwise to provide
additional funds to AMD Saxonia.
SECTION 3.5 Terms of Sponsors' Loans. The making of Sponsors' Loans will be made
on the terms, and shall be subject to the conditions, contained in the Sponsors'
Loan Agreement which, as provided in Section 3.1, is intended to reflect, rather
-----------
than to be in addition to, the obligations of the Sponsors contained in this
Article III.
-----------
SECTION 3.6 Subordination of Sponsors' Loans. The Sponsors' Loans will be
subordinated on the terms and conditions contained in the Sponsors'
Subordination Agreement.
ARTICLE IV
Cost Overruns Prior to Completion
SECTION 4.1 Cost Overruns. In addition to, and not in limitation of, their other
obligations contained in this Agreement and the other Operative Documents, the
Sponsors, jointly and severally, hereby undertake to provide AMD Saxonia with
Same Day Funds (whether, in the case of AMD Holding, by contribution to AMD
Saxonia's Equity Capital (or other contributions to AMD Saxonia's capital
reserves), or, in the case of either Sponsor, through Sponsors' Loans)
sufficient to cover the Sponsors' Applicable Share of any Cost Overrun. The
Sponsors shall be relieved of any further obligations under this Article IV if,
but only if:
(i) the Sponsors shall have complied with each of their respective
obligations under Article II and, insofar as such obligations relate
----------
to Class A Sponsors'
32
<PAGE>
Loans (or additional contributions to Equity Capital or AMD Saxonia's
capital reserves in lieu thereof), Article III; and
-----------
(ii) following a demand by the Agent for payment under the Sponsors'
Guaranty, the Sponsors shall have paid all amounts payable under the
Sponsors' Guaranty.
The Sponsors shall be required to provide AMD Saxonia with Same Day Funds in the
amount of the Sponsors' Applicable Share of any Cost Overrun:
(i) on or prior to the occasion of each drawdown of a Tranche B Advance,
and as a condition to the making thereof; and
(ii) promptly following any notice from the Agent or the Technical Advisor
to AMD Inc. to the effect that the Cost to Complete exceeds the funds
otherwise available to AMD Saxonia for such purpose (including,
without limitation, the Available Tranche A Amount, the Available
Tranche B Amount, and the balance, if any, of collected funds then on
deposit in the Operating Account, together with the then value of the
Cash Equivalent Investments acquired with the proceeds of the
Operating Account).
SECTION 4.2 Determination of Sponsors' Applicable Share.
(i) If and to the extent that Cost Overruns do not exceed DM 225,000,000
(two hundred twenty five million Deutsche Marks), the Sponsors'
Applicable Share thereof shall be 33-1/3% (ie, up to DM 75,000,000
(seventy five million Deutsche Marks)); and
(ii) If and to the extent that Cost Overruns exceed DM 225,000,000 (two
hundred twenty five million Deutsche Marks), the Sponsors' Applicable
Share thereof shall be 100%.
SECTION 4.3 Time of Payment. As and when required by Section 4.1, the Sponsors
-----------
will provide AMD Saxonia with cash in Same Day Funds to cover the Sponsors'
Applicable Share of any Cost Overrun.
SECTION 4.4 Post Completion Adjustment. Following Completion, if:
(i) AMD Holding has made contributions to AMD Saxonia's Equity Capital (or
other contributions to AMD Saxonia's capital reserves), other than
contributions of the minimum Equity Capital referred to in Article II;
----------
or
(ii) a Sponsor has made Sponsors' Loans to AMD Saxonia (other than Class A
Sponsors' Loans or Class B Sponsors' Loans),
33
<PAGE>
in either case to enable AMD Saxonia to have sufficient funds to pay Cost
Overruns (the aggregate amount so contributed or lent to AMD Saxonia being
hereinafter called the "Sponsors' Cost Overrun Contribution"), then, provided
-----------------------------------
that no Event of Default, Unmatured Event of Default or Event of Termination has
occurred and is continuing, AMD Saxonia shall, at the request of a Sponsor, and
with the consent of the Agent, repay to such Sponsor Sponsors' Loans in an
amount which is equal to the excess, if any, of:
(i) the Sponsors' Cost Overrun Contribution
over
----
(ii) the Sponsors' Applicable Share of the Cost Overruns prior to
Completion.
The Agent shall be required to grant such consent unless it has actual knowledge
that an Event of Default, Unmatured Event of Default or Event of Termination
shall have occurred and be continuing.
SECTION 4.5 Determination of Cost Overruns. As soon as reasonably practicable
after a Cost Overrun has been identified by a Relevant AMD Inc. Individual or by
the Technical Advisor, the AMD Companies shall calculate the amount of any Cost
Overrun and furnish such calculation to the Agent (together with such additional
information as the Agent may reasonably request); provided, however, that if the
-----------------
Technical Advisor, acting reasonably and in good faith at the request of the
Agent, identifies and calculates a Cost Overrun or disagrees with the AMD
Companies' identification or calculation thereof, the Technical Advisor's
calculation shall, for purposes of this Agreement, be conclusive and binding.
The Agent will promptly advise the AMD Companies and the Banks of any
determination by the Technical Advisor pursuant to the proviso to the preceding
-------
sentence.
SECTION 4.6 Projected Total Cost. If, at any time, the Projected Total Cost
exceeds DM 3,159,000,000 (three billion one hundred fifty nine million Deutsche
Marks), then, as soon as reasonably practicable (and, in any case, within 10
Business Days) following receipt of a demand by the Agent pursuant to ss.
---
21.2(xxiii) of the Loan Agreement, an Event of Default shall be deemed to have
-----------
occurred unless AMD Inc. provides the Agent with such evidence as shall be
reasonably satisfactory to the Agent with respect to the ability of AMD Inc. and
AMD Saxonia to fund the entire remaining Cost to Complete, after giving effect
to the sum of (i) the Available Tranche A Amount, plus (ii) the Available
Tranche B Amount.
SECTION 4.7 Form of Contribution. The Sponsors may comply with their respective
obligations under this Article IV by making, either:
----------
(i) in the case of AMD Holding, a cash increase in the Equity Capital (or
other contributions to AMD Saxonia's capital reserves) of AMD Saxonia;
and/or
(ii) in the case of either Sponsor, further Sponsors' Loans to AMD Saxonia.
34
<PAGE>
ARTICLE V
Completion Guaranty
SECTION 5.1 Completion Guaranty. The Sponsors (jointly and severally), hereby
agree to cause AMD Saxonia:
(i) to complete each Project Phase as soon as contemplated by the
Approved Project Schedule (it being understood and agreed that the
completion date for one or more Project Phases (other than the final
Project Phase) may be deferred for up to six (6) months in the
aggregate for all such deferrals on a cumulative basis provided that
no such deferral may affect the final deadline for Completion);
(ii) to achieve Completion as soon as contemplated by the Approved Project
Schedule and, in any event, on or before 30 December 2001; and
(iii) to take all such action, including, without limitation, all actions
before Governmental Authorities, as shall be necessary or appropriate
to enable AMD Saxonia to complete each Project Phase and to achieve
Completion as aforesaid.
For the avoidance of doubt, the obligations of the Sponsors contained in this
Article V are in addition to, and not in limitation of, their respective
---------
obligations contained elsewhere in this Agreement and in the other Operative
Documents; provided, however, that the Sponsors shall be relieved of their
-----------------
respective obligations under this Article V if, but only if:
---------
(i) the Sponsors shall have complied with each of their respective
obligations under Article II and, insofar as such obligations relate
----------
to Class A Sponsors' Loans (or additional contributions to Equity
Capital or AMD Saxonia's capital reserves in lieu thereof), Article
-------
III; and
---
(ii) following a demand for payment by the Agent under the Sponsors'
Guaranty, the Sponsors shall have paid all amounts payable under the
Sponsors' Guaranty.
SECTION 5.2 Notice of Scheduled Project Phase, Technical, and Financial
Completion. Upon the occurrence of each of the following, the Agent shall
promptly advise the Sponsors, AMD Saxonia, and the Banks thereof:
(i) Scheduled Project Phase Technical Completion for each Project Phase,
(ii) Technical Completion;
35
<PAGE>
(iii) Financial Completion, and
(iv) Completion.
SECTION 5.3 No Double Recovery Under Article V and Sponsors' Guaranty. In the
event that the Sponsors default in the payment and performance of their
obligations under this Article V and, following any such default, the Agent
---------
institutes litigation or other adversary proceedings designed to compel the
Sponsors to perform such obligations or to pay damages for such failure, the
right of recovery against the Sponsors under this Article V is limited mutatis
--------- -------
mutandis to the amount set forth in Section 2.1 of the Sponsors' Guaranty and
-----------
any recovery by the Agent from the Sponsors hereunder shall, pro tanto, reduce
---------
the amount available to be recovered from the Sponsors under the Sponsors'
Guaranty.
For the avoidance of doubt, the obligations of the Sponsors under this Section
5.1 constitute a primary guarantee obligation (Garantievertrag) and not a surety
guarantee (Burgschaft).
ARTICLE VI
Subsidies Undertaking
SECTION 6.1 Subsidies. The Project will be supported by the following subsidies
and grants from the Free State of Saxony (hereinafter, the "Subsidies"):
---------
(i) a dedicated purpose investment grant in an aggregate amount of DM
476,687,000 (four hundred seventy six million six hundred eighty seven
thousand Deutsche Marks) which, together with the investment subsidies
in an aggregate amount of DM 23,813,000 (twenty three million eight
hundred thirteen thousand Deutsche Marks), totals an aggregate amount
of DM 500,500,000 (five hundred million five hundred thousand Deutsche
Marks); and
(ii) a dedicated purpose interest subsidy in an amount of DM 300,000,000
(three hundred million Deutsche Marks)
which, in each case, will be paid to AMD Saxonia by Dresdner Bank AG in Dresden,
in its capacity as house bank.
SECTION 6.2 Payment of Shortfall. The granting of the Subsidies is contingent on
the adherence by the Sponsors and AMD Saxonia to particular conditions,
requirements, and covenants. If, for any reason whatsoever, any AMD Company or
any Affiliate of any AMD Company breaches any such conditions, requirements, or
covenants, and, accordingly, causes the Subsidies not to be paid or, as a result
of any such breach, the Subsidies are required to be repaid (in either such case
the amount thereof being hereinafter called a "Shortfall"), then, without delay
---------
following its or their receipt of a demand therefor by the Agent, either:
36
<PAGE>
(i) AMD Holding shall contribute Equity Capital (or other contributions to
AMD Saxonia's capital reserves) to AMD Saxonia, and AMD Inc. shall
cause AMD Holding to so contribute to AMD Saxonia (and AMD Inc. shall,
to the extent necessary, contribute sufficient funds, or otherwise
cause sufficient funds to be made available, to AMD Holding as shall
be necessary to enable AMD Holding to so contribute to AMD Saxonia);
and/or
(ii) one or both Sponsors shall make Sponsors' Loans to AMD Saxonia,
in either case in an aggregate amount (and, if the Subsidies have not yet been
provided, as and when the Subsidies, but for such breach, would have otherwise
been provided) equal to the Shortfall.
For the avoidance of doubt:
(i) the obligations of the Sponsors contained in this Article VI are in
----------
addition to, and not in limitation of, their obligations contained
elsewhere in this Agreement and in the other Operative Documents, and
shall survive Completion; and
(ii) the Sponsors shall not be relieved of the foregoing obligations by
virtue of:
(a) any prior Sponsors' Loans made by the Sponsors (or either of
them);
(b) any prior contributions of Equity Capital (or other contributions
to AMD Saxonia's capital reserves) by AMD Holding; or
(c) any payment made by either Sponsor under the Sponsors' Guaranty;
provided, however, that the Sponsors shall have no liability as aforesaid in
-----------------
respect of any Subsidies which fail to be provided at any time after the
foreclosure by the Security Agent upon any security provided by the Security
Documents, unless such failure is attributable to any such breach by AMD Inc. or
any of its Affiliates (other than AMD Saxonia or AMD Holding, if then Affiliates
of AMD Inc.) occurring after such foreclosure.
SECTION 6.3 Bridging of AMD Saxonia's Receipt of the Subsidies.
(a) It is understood and agreed that the Sponsors (jointly and severally)
will, in the case of AMD Holding, contribute Equity Capital (or other
contributions to AMD Saxonia's capital reserves), or, in the case of
either Sponsor, make Sponsors' Loans, to AMD Saxonia, in either case
as and to the extent that
37
<PAGE>
AMD Saxonia requires such funds prior to and in anticipation of its
receipt of the Subsidies. If any such contribution or Sponsors' Loan
is made for such purpose prior to AMD Saxonia's receipt of the
Subsidies (or any portion thereof) then, to the extent that AMD
Saxonia subsequently receives the proceeds of such Subsidies, and
provided that no Event of Default, Unmatured Event of Default or Event
of Termination shall have occurred and be continuing, AMD Saxonia
shall, to the extent permitted by applicable law, repay Sponsors'
Loans to the extent of the aggregate amount of the proceeds of the
Subsidy so received, but without interest.
(b) The Sponsors' obligations to make contributions or loans under Section
-------
6.3 (a) shall terminate from the date of any foreclosure over the
-------
shares of AMD Holding or AMD Saxonia under the Security Documents.
ARTICLE VII
Pari Passu Undertaking
SECTION 7.1 Pari Passu Undertaking. AMD Holding has certain payment obligations
under, and as set forth in, the AMD Saxonia Wafer Purchase Agreement, including
an obligation under Section 3.12 thereof (which obligates AMD Holding to
------------
compensate AMD Saxonia for certain Uneven Capacity Allocations). AMD Inc.,
pursuant to the AMD Inc. Guaranty, has unconditionally guaranteed, inter alia,
----------
the obligations of AMD Holding under and in connection with the AMD Saxonia
Wafer Purchase Agreement. AMD Holding and AMD Inc. hereby jointly and severally
acknowledge and agree that the Secured Parties have an interest in the proper
performance by AMD Holding and AMD Inc. of their respective obligations under
the AMD Saxonia Wafer Purchase Agreement and the AMD Inc. Guaranty,
respectively, and, therefore, the parties hereto hereby agree that the Security
Agent may compel AMD Holding's and/or AMD Inc.'s performance of its or their
respective obligations thereunder.
ARTICLE VIII
AMD Inc. Share Pledge Agreement; AMD Holding Security Documents
SECTION 8.1 AMD Inc. Share Pledge Agreement. AMD Inc. has granted a first
priority security interest in the AMD Inc. Collateral pursuant to and on the
terms and conditions set forth in the AMD Inc. Share Pledge Agreement.
SECTION 8.2 AMD Holding Security Documents. AMD Holding has granted a first
priority security interest in the AMD Holding Security pursuant to and on the
terms and conditions set forth in the AMD Holding Security Documents.
38
<PAGE>
ARTICLE IX
Sponsors' Guaranty
SECTION 9.1 Sponsors' Guaranty. Without intending to derogate from the
provisions of the Sponsors' Guaranty (and, in the event of any inconsistency
with this Section 9.1, the Sponsors' Guaranty shall prevail), the Sponsors
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(jointly and severally), have agreed to guarantee, on the terms and subject to
the conditions of the Sponsors' Guaranty, the full and prompt payment when due,
whether by acceleration or otherwise, of all Secured Obligations of AMD Saxonia
to the Secured Parties under or in connection with the Financing Documents and
the Security Documents; provided, however, that as provided in the Sponsors'
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Guaranty, the cumulative right of recovery against the Sponsors with respect to
the Sponsors' Guaranty is limited to DM 217,500,000 (two hundred seventeen
million five hundred thousand Deutsche Marks), plus (as and to the extent
provided in the Sponsors' Guaranty) interest on such amount, if not paid when
due, and plus costs and expenses of enforcement. In furtherance of the
foregoing, the Sponsors have undertaken, pursuant to the terms of the Sponsors'
Guaranty, to pay to the Agent, upon first written demand following the
occurrence of an Event of Default and acceleration of the Advances a sum equal
to the lesser of:
(i) the aggregate amount of all Secured Obligations; and
(ii) DM 217,500,000 (two hundred seventeen million five hundred thousand
Deutsche Marks).
For the avoidance of doubt, the obligations of the Sponsors under the Sponsors'
Guaranty constitute a primary guarantee obligation (Garantievertrag) and not a
surety guarantee (Burgschaft), and are in addition to, and not in limitation of,
the other obligations of the Sponsors hereunder and under the other Operative
Documents.
ARTICLE X
Sponsors' Subordination Agreement; AMD Inc. Subordination Agreement
SECTION 10.1 Sponsors' Subordination Agreement. The Sponsors hereby agree to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
Sponsors' Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the Sponsors' Subordination Agreement),
on the terms and subject to the conditions of the Sponsors' Subordination
Agreement.
SECTION 10.2 AMD Inc. Subordination Agreement. AMD Inc. hereby agrees to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
AMD Inc. Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the AMD Inc. Subordination Agreement), on
the terms and subject to the conditions of the AMD Inc. Subordination Agreement.
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ARTICLE XI
Obligations Unconditional
SECTION 11.1 Absolute and Unconditional Nature of the Sponsors' Obligations. The
obligation of the Sponsors to perform their respective obligations under this
Agreement, and the right of AMD Saxonia or the Agent or the Security Agent, as
applicable, to receive the proceeds of each payment to be made to or for the
account of AMD Saxonia as provided herein and in each of the other Operative
Documents, shall be absolute, irrevocable, and unconditional, it being the
intention of the parties hereto that all obligations of the Sponsors under or in
connection with this Agreement shall be paid and performed in all events in the
manner and at the times herein provided, irrespective of and without prejudice
to, in particular, any rights or remedies that are available to the other
parties hereto and thereto under any agreements or any applicable laws. The
Sponsors shall be entitled to setoff, and to raise rights of retention, in
respect of their respective payment claims hereunder and under the other
Operative Documents only to the extent their respective counterclaims are
undisputed or have been the subject of a final binding arbitral or court
decision.
ARTICLE XII
Representations and Warranties
SECTION 12.1 Representations and Warranties of AMD Inc. AMD Inc. hereby
represents and warrants to the Agent and the Security Agent as follows:
(i) Organization; Corporate Power.
AMD Inc. and each Material AMD Inc. Subsidiary:
(a) is a corporation duly incorporated, validly existing, and (where
the concept has a technical meaning) in good standing under the
laws of the jurisdiction of its incorporation;
(b) is duly qualified or licensed and (where the concept has a
technical meaning) in good standing as a foreign corporation
authorized to do business in each other jurisdiction where,
because of the nature of its activities or properties in such
jurisdiction, such qualification or licensing is required,
(c) has all requisite corporate power and authority to own, operate,
and lease its assets and properties and to carry on the business
in which it is engaged and in which it proposes to engage;
(d) that is an AMD Company, has all requisite corporate power and
authority:
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(x) to execute, deliver, and perform its obligations under each
of the Operative Documents to which it is a party; and
(y) to assign, and grant a security interest in, the Security in
the manner and for the purpose contemplated by the Security
Documents to which it is a party; and
(e) is in compliance with all Requirements of Law
except, in each case referred to in clause (b), (c), or (e), to the
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extent that the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(ii) Corporate Authority; No Conflict.
The execution, delivery, and performance by each AMD Company of each
Operative Document to which any such AMD Company is a party, and the
grant by such AMD Company of a security interest in the Security in
the manner and for the purpose contemplated by the Security Documents
to which such AMD Company is a party, have been duly authorised by all
necessary corporate action (including any necessary shareholder
action) on the part of such AMD Company, and do not:
(a) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently
in effect binding on such AMD Company, or of the Organizational
Documents of such AMD Company;
(b) result in a breach of, result in a mandatory prepayment or
acceleration of indebtedness evidenced or secured by, or
constitute a default under, any indenture or loan or credit
agreement, or any other agreement or instrument, to which such
AMD Company is a party or by which such AMD Company or its
properties are bound; or
(c) result in, or require (in either case except as contemplated by
the Operative Documents), the creation or imposition of any
Encumbrance of any nature upon or with respect to any of the
properties now owned or hereafter acquired by any of the AMD
Companies (other than any right of set-off or banker's lien or
attachment that the Agent, the Security Agent, or any Bank may
have under the Operative Documents or applicable law), and none
of the AMD Companies is in default under or in violation of its
Organizational Documents, any of the Operative Documents to which
it is a party,
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or any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award, indenture, agreement,
or instrument, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
(iii) Valid and Binding Obligations.
Each Operative Document which has been executed and delivered by an
AMD Company constitutes the legal, valid, and binding obligation of
such AMD Company, enforceable against such AMD Company in accordance
with its respective terms, subject, however, to the Opinion
Reservations.
(iv) Sponsor Security Documents.
(a) The provisions of each of the Security Documents which has been
executed and delivered by a Sponsor are effective to create in
favor of the Security Agent for the benefit of the Secured
Parties, a legal, valid, and enforceable first priority
Encumbrance on all rights, title, and interest of such Sponsor in
the Security described therein, subject only to Permitted
Encumbrances; and all necessary filings and recordings have been
made in the requisite offices in all of the jurisdictions
necessary or appropriate to perfect or continue perfected with
such priority such Encumbrance on such Security.
(b) Each Security Document which has been executed and delivered by a
Sponsor is effective to grant to the Security Agent a legal,
valid, and enforceable security interest on all rights, title,
and interest of the relevant Sponsor in the Security described
therein. When each such Security Document is duly recorded or
filed in the applicable recording or filing office(s), if any,
and the recording or filing fees and taxes, if any, in respect
thereof are paid and compliance is otherwise had with the formal
requirements of applicable law applicable to the recording and
filing of security documentation generally, such Security is
subject to a legal, valid, enforceable, and perfected first