AGREEMENT

 

Exhibit 10.58

 

Redacted Version

Confidential Treatment Marked

 

A G R E E M E N T

 

between

 

SI INVESTMENT LIMITED LIABILITY COMPANY & CO KG

 

and

 

M + W ZANDER FACILITY ENGINEERING GMBH

 

Pertaining to the

Design and Construction of Fab X, Dresden, Germany

 

Table of Contents

 

 

 

 

P R E A M B L E

 

This Design/Build Agreement (hereinafter referred to as “ Agreement ”) is made and entered into this 20 ^th of November, 2003 by and between SI Investment Limited Liability Company & Co KG, Louis-Braille-Straße 5, 01099 Dresden, Germany (hereinafter referred to as “ Company ”) and M+W Zander Facility Engineering GmbH, Lotterbergstraße 30, 70499 Stuttgart, Germany (hereinafter referred to as “ Contractor ”). Company and Contractor , are collectively referred to as “ Parties ” or each separately as “ Party ”.

 

R E C I T A L S

 

A. Company will purchase certain land located in Dresden, Wilschdorfer Straße marked in the plan attached as Exhibit 1 Site Plan in blue (the “ Site ”).

 

B. Contractor , or a joint venture of which Contractor forms part respectively, entered into a Co-Operation Agreement (Kooperationsvertrag vom 20. November 2003) under the conditions of which Contractor shall enter into a partnership agreement. Therefore, Contractor , or a joint venture of which Contractor forms part respectively, is not only Party to this Agreement but also limited partner ( Gesellschafter/Kommanditist ) of Company.

 

C. Company desires to obtain a new state-of-the-art microprocessor wafer fabrication facility for designing and producing integrated circuits (300 mm microprocessor wafers (65 nm technology, [***]* (to the degree defined in this Agreement ) and associated support facilities to be located on the Site . The result (Werkerfolg) of the works and services to be executed or rendered under this Agreement is referred to as “ Fab X ” (also referred to as “S.I.L.K.”) . Company commissions Contractor to plan, design, construct, erect, install, equip, start up, calibrate, adjust and turn over Fab X and execute all and any works, render all and any services and make all and any deliveries (hereinafter collectively referred to as “ Works ”) which are necessary or expedient for completing Fab X in a turn-key and functional manner and in a ready for unrestricted hook up condition, including, but not limited to, all and anything which

*	Confidential treatment has been requested pursuant to section IV.2. of the Confidential Treatment Request dated March 9, 2004.

 

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is technically or functionally necessary or expedient therefore, including, but not limited, to all and any items which could have an impact on productivity, yield or ease of use but excluding any works and services explicitly excluded in this Agreement .

 

D. Contractor desires to plan, design, construct, erect, install, equip, start up, certify, calibrate, adjust and turn over Fab X in the manner provided for in Recital C and to execute all Works necessary or expedient therefore and to execute the Works and to complete Fab X in a way meeting the standards provided for in this Agreement . As consideration in full for executing the Works and completing Fab X in accordance with this Agreement, Company will pay to Contractor the lump sum provided for in this Agreement

 

E. On the site adjacent to the Site , Contractor (or Contractor ’s legal predecessor Meissner + Wurst GmbH + Co. KG) completed a wafer fabrication support facility as well as later extensions and improvements thereto (this fabrication, the support facilities, the extensions and improvements is hereinafter referred to as “ Fab 30 ”) under a number of agreements, including a Design/Build Agreement with a third party (AMD Saxony Manufacturing GmbH, the legal predecessor of AMD Saxony Limited Liability Company & Co. KG) of November 15, 1996 as amended, a hook-up agreement of February 28, 1998 as amended and under later agreements especially under a letter of intent of June 7, 2000, an agreement of June 22, 2001 and a contract of November 28,/December 5, 2002).

 

From being involved in the works, services and deliveries under the aforementioned agreements, contracts and letters of intent and especially the details related to and underlying the execution, rendering or making the works, services and deliveries, Contractor is aware of the details of the completion of a state-of-the-art microprocessor wafer fabrication facility referred to in Recital C . Therefore, and because of surveys and examinations carried out by, or on behalf of, Contractor, Contractor is aware of the standards and requirements of such project, especially about all specifics and requirements of clean room conditions and is aware of the Site Condition , including the subsurface, environmental and hydrological condition. Moreover, Contractor is aware of the impact executing the Works under this Agreement could have on the operation of, and the production in, the adjacent Fab 30 . Contractor acknowledges that Contractor is aware that any detrimental impact the execution of the Works may have on Fab 30 and the operation of, and production in, Fab 30 could lead to losses, damages, claims etc, for which Contractor is liable to the extent provided for in this Agreement . Contractor , therefore, knows and acknowledges that all and any Works to be executed under this Agreement shall – unless otherwise agreed upon by the Parties —be executed in a manner not affecting, influencing, disturbing or having any other detrimental impact, including, but not limited to, detrimental impact by vibrations, on the operation of Fab 30 or the production within Fab 30 , including, but not limited to, the production of semiconductor processors. Contractor has examined and reviewed, and is aware of, all and any conditions relating to the Site , including, but not limited to, ground conditions, subsurface conditions and

 

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hydrological conditions and Contractor is aware of all and any requirements and conditions of a proper operation and production (including, but not limited to, the production of semiconductor processors) within Fab 30 as well as within Fab X (all these conditions are hereinafter referred to as „ Site Conditions ”). Contractor is liable for executing the Works in the aforementioned manner and meeting the requirements of the Site Conditions .

 

F. Company desires and Contractor acknowledges and is aware that it is essential that Fab X is completed within the milestones provided for in this Agreement and that meeting the given time frame is a presupposition ( Voraussetzung ) for Company being able to operate Fab X and produce in Fab X , otherwise an economical and efficient operation and production will be threatened or not be possible. Therefore, Contractor undertakes to complete the Works in the given time frame. Moreover, Parties are aware that the environmental, health, safety and security requirements provided for in this agreement to be met on Site , when executing the works and by Fab X are far above average standard and Contractor undertakes to meet such requirements.

 

Moreover, both Parties explicitly acknowledge and confirm that they are aware that for being granted the allowances Company applied for under the code of allowances ( Investitionszulagengesetz ) based on which the financial concept underlying this project was developed it is of utmost importance to reach the respective degree of completion described under no. 7.1.c) until [***]* .

 

G. Company ’s ability to carry out the project underlying this Agreement depends on the fact that the financial presuppositions the project is based on are met or maintained. Therefore, Parties agree that Company has an extraordinary termination right under circumstances described in this Agreement the impact of which on the remuneration is stipulated in this Agreement .

 

H. Contractor confirms that Contractor will at all and any time keep the project underlying this Agreement equipped with all and any resources, know-how, work force and all and any means and measures necessary to properly execute the Works under this Agreement and to complete Fab X in time and that Contractor will not reduce its activities, work force or personnel and executing other projects or contracts will not detrimentally impact the project..

*	Confidential treatment has been requested pursuant to section IV.1.(a) of the Confidential Treatment Request dated March 9, 2004.

 

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P R O V I S I O N S

 

1.	Parts of this Agreement

 

In the event of discrepancies, the following parts of this Agreement shall be applicable in the order set forth hereinafter:

 

a)

this document ( “Document” )

 

b)

the Exhibits to this Document

 

aa)

Exhibit 1: Site Plan

 

bb)

Exhibit 2: ITRS Roadmap

 

cc)

Exhibit 3: Design

 

dd)

Exhibit 4: List of Interfaces

 

ee)

Exhibit 5: Design Documents

 

ff)

Exhibit 6: Company’s Inspections

 

gg)

Exhibit 7: Payment Schedule

 

hh)

Exhibit 8: Operation and Maintenance Data

 

ii)

Exhibit 9: EHS Program

 

jj)

Exhibit 10: Clean Protocol

 

kk)

Exhibit 11: Lump Sum Price Calculation

 

ll)

Exhibit 12: List of Subcontractors consented to

 

mm)

Exhibit 13: Workforce Regulations

 

nn)

Exhibit 14: Milestone Definitions

 

oo)

Exhibit 15: Time Schedule

 

8

pp)

Exhibit 16: Performance Guarantee

 

qq)

Exhibit 17: Defects Liability Guarantee

 

c)

the rules of sound engineering practice ( anerkannte Regeln der Technik)

 

d)

the applicable DIN , VDI and VDE regulations)

 

e)

the provisions of VOB/B ( Verdingungsordnung für Bauleistungen, Teil B) The parties clarify that this does not mean that VOB/A is applicable as well.

 

f)

the German Civil Code (BGB = Bürgerliches Gesetzbuch).

 

2.	Scope of Work

 

2.1.	Scope of Work

 

Contractor is obliged to deliver to Company a new state-of-the-art microprocessor wafer fabrication facility for designing and producing integrated circuits (300 mm microprocessor wafers (65 nm technology, [***]* ( [***] * defined in the roadmap attached hereto as Exhibit 2 ITRS Roadmap ) and associated support facilities to be located on the Site . Contractor shall plan, design, construct, erect, install, equip, start up, calibrate, adjust and turn over Fab X and execute all Works which are necessary or expedient for completing Fab X in a turn-key and functional manner and in accordance with the specifications and descriptions contained in Exhibit 3 Design and in a ready for unrestricted hook up condition, regardless of whether the respective item or component is explicitly mentioned in Exhibit 3 Design and including, but not limited to, all and anything which is technically or functionally necessary or expedient therefore, including, but not limited to, all and any items which could have an impact on productivity, yield or ease of use but excluding any works and services as named as excluded in the list of interfaces attached as Exhibit 4 List of Interfaces .

*	Confidential treatment has been requested pursuant to section IV.2. of the Confidential Treatment Request dated March 9, 2004.

 

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If and to the extent the description of Fab X is insufficient in order to define specifications for Fab X reference shall be made to the specifications and descriptions under the agreement of November 28,/December 5, 2002 relating to the Advanced Technology and Process Center (ATPC) or, if this agreement is insufficient to the specifications and descriptions under the Design/Build Agreement of November 15, 1996.

 

The parties acknowledge and confirm that in case more than one way of executing the Works leads to completion of Fab X or a component or part thereof meeting the standards and requirements provided in this Agreement , Company has the right to choose the way of execution. If exercising such right to choose leads to cost or time impact this impact is covered by the change procedure provided for in no. 4.

 

These aforementioned obligations include, but are not limited to, all and any Works described and provided for in the design documents attached as Exhibit 3 Design . All standards or requirements necessary or expedient as described herein for completing Fab X in a turn-key and functional manner and in a ready for unrestricted hook up condition shall be met by the Works , this includes, but is not limited to, meeting all standards and requirements provided for in the design documents attached as Exhibit 3 Design .

 

As exception, the Parties clarify that to the extent regulations in Exhibit 3 Design deal with the technical solution for insurance reasons (FM or VDS) (which is still pending) elements of the Works are only covered by the lump sum provided for in no. 3.1 to the extent these aforementioned elements of the Works are explicitly described in Exhibit 3 Design . To the extent that regarding the aforementioned elements of the Works works or services other than those contained in Exhibit 3 Design are requested the impact on the remuneration shall be determined in accordance with the procedure provided for under no. 4.

 

The Contractor shall with regard to planning, designing, constructing, erecting, installing, equipping, starting up, calibrating, adjusting and turning over use best efforts to secure maximum possible value added and to execute the Works in a manner that there is no detrimental impact on the operation of, and production in, Fab 30 .

 

Moreover, Contractor is aware of the impact executing the Works under this Agreement could have on the operation of, and the production in, the adjacent Fab 30 . Contractor acknowledges that Contractor is aware that any

 

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detrimental impact the execution of the Works may have on Fab 30 and the operation of, and production in, Fab 30 could lead to losses, damages, claims etc, for which Contractor is liable to the extent provided for in this Agreement . Contractor , therefore, knows and acknowledges that all and any Works to be executed under this Agreement shall – unless otherwise agreed upon by the Parties - be executed in a manner not affecting, influencing, disturbing or having any other detrimental impact, including, but not limited to, detrimental impact by vibrations, on the operation of Fab 30 or the production within Fab 30 , including, but not limited to, the production of semiconductor processors. Contractor has examined and reviewed, and is aware of, all and any conditions relating to the Site , including, but not limited to, ground conditions, subsurface conditions and hydrological conditions and Contractor is aware of all and any requirements and conditions of a proper operation and production (including, but not limited to, the production of semiconductor processors) within Fab 30 as well as within Fab X (to all these conditions is hereinafter referred to as „ Site Conditions ”). Contractor is liable for executing the Works in the aforementioned manner and meeting the requirements of the Site Conditions but shall be entitled to an adjustment of the remuneration or an extension of time under the respective applicable provision of this Agreement if and to the extent findings ( Kampfmittel or archäologische Funde ) lead to a change of the scope of work.

 

2.2.	Document Flow

 

Contractor shall submit all Design Documents as defined in Exhibit 5 Design Documents to Company for approval (approval means written consent). Such approval by Company shall not unreasonably be withheld. Company shall approve or disapprove such documents latest within five (5) working days (working days in the meaning of this Agreement are all days from Monday through Saturday except for days which are public holidays ( gesetzliche Feiertage ) in the Free State of Saxony) from receipt. If Contractor has not received the approval or disapproval (defining the reason(s) for disapproval at the same point in time) within this period from Company receiving the particular document, Contractor shall give Company notice of Company´s failure to respond in time. If Contractor has not received Company´s approval or disapproval within 24 hours from Company´s receipt of such notice, the particular document shall be deemed to be approved by Company . Contractor shall not be entitled to an extension of time because of Company ´s justified refusal to approve a certain document.

 

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2.3.	Conduct of Executing Works

 

All Works to be executed shall, in addition to being executed in a manner meeting the standards and requirements in other parts or provisions of this Agreement, be executed in a manner meeting clean room standards as defined in Exhibit 3 Design .

 

Contractor explicitly acknowledges that Contractor is aware of the conditions and requirements of a 300 mm microprocessor wafer fabrication facility and the standards to be met by such facility (which are far higher than the standards of regular industrial construction), especially those to be met by the Works and Fab X , including, but not limited to, cleanroom conditions. Contractor explicitly warrants that Contractor sufficiently informs all subcontractors of all conditions, requirements and standards to be met on or by such facility, including, but not limited to, cleanroom conditions.

 

Company has an absolute ban on smoking in place over the entire Site and in all its buildings, with the exception of smoking zones marked accordingly.

 

For reasons of personal and general safety, the consumption of any alcoholic beverages during work, or starting work in an intoxicated condition, is prohibited. This also applies for other drugs.

 

Contractor hereby undertakes to strictly monitor compliance with these prohibitions on the part of its employees or the staff of any subcontractors used. Repeated breaches or offences, in spite of a warning, shall be a valid basis for expulsion of the employee or the subcontractor from the Site .

 

2.4.

Materials

 

Contractor shall, on demand of Company , submit for Company ’s approval, detailed information, including, but not limited to, model number, quality, manufacturer, about all materials Contractor intends to use. In addition, Contractor shall submit to Company , for Company ’s approval, detailed information about all materials which are exposed to parts of Fab X which are to be or might be operated under clean room conditions . Such approval shall not unreasonably be withheld by Company .

 

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2.5.	Company’s inspections

 

Company shall, at any time, have the right to review and inspect all and any of the Works by Contractor , including but not limited to, any Works documents, plans, drawings, Design Documents , discs, electronic data and like (except for commercial data which shall – unless provided otherwise in this Agreement —only be disclosed if and to the extent necessary for determining price adjustments under no. 4.2 of this Document ). Moreover, Contractor shall – on demand – submit to Company copies of any of such documents and all documentation and information related to the execution of the Works to be executed. Exhibit 6 Company’s Inspections shall apply accordingly to any Works to be executed under this Agreement.

 

2.6.	Obligations

 

The Parties clarify and acknowledge that the obligations which form part of the Works include, but are not limited to, the following:

 

2.6.1.

Statutory and like Requirements

 

Contractor shall obey Baustellenverordnung and all and any statutory and like requirements including, but not limited to Arbeitsstättenverordnung, Arbeitsnehmerüberlassungsgesetz, Bundesimmissionsschutzgesetz, Strahlen- und Röntgenschutzverordnung, Sicherheitsbestimmungen, Bestimmungen der Berufsgenossenschaften and all and any Unfallverhütungsvorschriften (accident prevention regulations) and all and any accident prevention obligations and EU directives and shall impose this duty on all subcontractors. This includes, but is not limited to, Contractor´s obligation to develop a security and health plan ( Sicherheits- und Gesundheitsschutzplan ). If Contractor proves that changes of such statutory or like requirements becoming effective after conclusion of this Agreement of which Contractor has not been aware at the time of concluding this Agreement results in changes in the scope of work the financial impact of the total of such changes of such laws or like is more than Euro 75,000.00 (seventy five thousand Euro) the change order procedure provided for in no. 4 shall apply on the entire amount (if the amount is Euro 75,000.00 or less the change order procedure shall not apply but the resulting impact on the scope of work shall be covered by the lump sum provided for in no. 3.1).

 

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2.6.2.

Progress Updates

 

Contractor shall provide Company , with monthly status and progress reports and – upon reasonable and justified request of Company – with periodic progress reports in the frequency justified by the situation. In addition Contractor shall provide Company with weekly progress updates. Moreover, Contractor shall provide Company with technical progress reports relating to all completions of relevant parts of Fab X (for example “Fab construction weathertight” or “clean room ready for equipment”) and of milestones provided for in this Agreement and for completions which trigger – under the payment schedule for progress payments attached as Exhibit 7 Payment Schedule - payments on account.

 

2.6.3.

Construction Diary

 

Contractor shall keep a construction diary ( Bautagebuch ) on an at least daily basis.

 

2.6.4.

Calibrating, Adjusting, Testing

 

The obligations of Contractor shall include, but not be limited to, all and any calibrating, adjusting, testing and like of Fab X and all and any parts and components thereof to the extent necessary or expedient for completing Fab X in accordance with this Agreement .

 

2.6.5.

Permits

 

Contractor shall be obliged to procure all necessary permits, acceptances and like which are necessary or expedient for executing or completing the Works or completing Fab X in accordance with this Agreement , including, but not limited to, the building permit, necessary permits under water law ( wasserrechtliche Genehmigungen, Erlaubnisse etc. ), permits required under the Working Hours Law ( Arbeitszeitgesetz) (e.g. for work on Sundays).

 

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2.6.6.

Construction Management

 

Contractor shall render all and any construction management and supervision services necessary or expedient for the execution and completion of the Works and the completion of Fab X in accordance with this Agreement . This includes, but is not limited to, Contractor´ s obligation to coordinate with persons, including but not limited to work or services performed by Company and with other contractors employed by Company , acting on the Site on behalf of Company . Such person acting on behalf of Company shall obey Contractor ´s construction site rules and shall attend Contractor ´s coordination meetings which Contractor shall carry out in a form, number and in intervals (at least weekly) as, and with all participants, necessary and expedient and invite Company to, and provide Company with protocols of all coordination meetings. However, Contractor shall not be liable and responsible for conduct of such persons acting on behalf of Company ( Erfüllungsgehilfen des Auftraggebers ) unless such conduct is caused by Contractor . Company shall instruct and inform any such person accordingly. The obligations of Contractor shall include, but shall not be limited to, coordinating the timing of work done by Contractor with that carried out by third parties,

 

•

coordinating the physical location and personnel allocation arrangements for work done by Contractor and third party works,

 

•

harmonizing the structural engineering aspects of the work done by Contractor with third party contributions to the project and

 

•

coordinating works and firms, so that all aspects of the construction project will proceed in accordance with the accident prevention regulations.

 

2.6.7.

Planning, Engineering, Designing, Architectural and like Works

 

The obligations of Contractor shall include all and any planning, engineering, designing, architectural and like works or services necessary or expedient for the execution or completion of the Works and Fab X in accordance with this Agreement . Contractor shall be obliged to deliver the completed design for Fab X .

 

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These planning, engineering, designing, architectural and like works, include, but shall not be limited to, preparation and submission of all and any Design Documents defined in Exhibit 5 Design Documents.

 

2.6.8.

Operation and Maintenance Data

 

With respect to the obligation of Contractor regarding Operation and Maintenance Data, the provisions of Exhibit 8 Operation and Maintenance Data shall apply to the extent reasonably applicable unless explicitly provided for otherwise in this Document .

 

2.6.9.

Mechanical, Electrical, Processing Components

 

The obligations of Contractor shall include, but shall not be limited to, all and any Works necessary or expedient for planning, designing, constructing, erecting, installing, equipping, starting up, calibrating, adjusting and turning over the completed shell and all mechanical, electrical and processing components of Fab X in a turn-key and functional manner and in a ready for unrestricted hook up condition in accordance with this Agreement .

 

2.6.10.

Letter of Intent

 

The works and services rendered under the letter of intent of May 16, 2003 as amended under the letters of August 13, 2003 and November 3, 2003.

 

2.6.11.

Health and Savety Plan/Site Rules

 

Contractor shall formulate a health and safety plan and a set of site rules, and shall make the required prior notification to the competent factory inspectorate authority ( Gewerbeaufsichtsamt) .

 

2.6.12.

Environmental, Health, Safety and Security Requirements

 

Contractor shall meet all environmental, health, safety and security requirements provided for in Exhibit 9 EHS Program .

 

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2.6.13.

Obligation to observe Rules

 

Contractor shall place its employees and any subcontractors employed under a written obligation to observe the safety and discipline rules in force at that location and Contractor shall clearly mark the rooms and areas used by it with its company name.

 

2.6.14.

Acceptances by Authorities

 

Contractor shall carry out, or have carried out, acceptances by authorities ( Behördenabnahmen ).

 

2.6.15.

Health and Savety Coordinator

 

Contractor shall appoint and commission the services of a health and safety coordinator (HSC), at its expense, pursuant to the Construction Site Regulations ( Baustellenverordnung ), VBG 1 and of the Industrial Safety Law ( Arbeitsschutzgesetz ). Moreover, Contractor shall provide suitable training for his personnel in all health and safety requirements, including, but not limited to, disposal of hazardous or toxic waste. Contractor shall not remove the safety and health engineer prior to completion of all and any Works on the site. This shall not be prior to remedying – and formally accepting by Company that the defects had properly been remedied – all defects which had been detected in the course of the final acceptance. Contractor may, upon Company´s prior written consent, appoint another person as health and safety coordinator.

 

2.6.16.

Clean Site

 

The Site must be kept tidy, in accordance with accident prevention regulations, for the entire duration of the Works . Rubbish and packaging material is generally to be disposed of immediately. Rubbish containers shall be emptied regularly. In particular, care shall be taken to ensure that there is no lasting impact on subsequent works from rubbish, dust and other contamination. The Site is generally to be kept clean both inside and outside. The Site shall be cleaned to the extent provided for in the clean protocol ( Exhibit 10 Clean Protocol ).

 

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2.6.17.

Construction Supervisor

 

The construction supervisor’s rights and obligations pursuant to the Building Regulations of Saxony ( sächsische Bauordnung) apply to the Contractor . Company shall be notified of the name, address and contact details of the construction supervisor in good time and may only object to such person for good cause.

 

2.6.18.

Clean Roads

 

Public roads and works roads shall be kept clean at all times, with any soiling to be cleaned up immediately.

 

2.6.19.

Security

 

Contractor shall be solely and completely responsible for, and shall establish and maintain, the security of the Site , including protection of personnel, the work and materials.

 

3.	Remuneration

 

3.1.	Lump Sum Price

 

As consideration in full for the Works to be executed and all obligations of Contractor under this Agreement Company shall pay to Contractor a fixed lump sum ( Pauschalfestpreis ) of Euro 380,500,000.00 plus VAT as applicable from time to time.

 

The lump sum price shall be fixed up to and including final acceptance of the entirety of Works ( Der Pauschalfestpreis gilt bis einschließlich der Schlußabnahme der Gesamtleistung ).

 

The parties acknowledge and confirm that the payments to be rendered under the letter of intent of May 16, 2003 as amended under the letters of August 13, 2003 and November 3, 2003 shall form part of the aforementioned lump sum

 

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and no additional remuneration shall be paid for these works and services which shall form part of the Works .

 

3.2.	Payments on Account

 

Contractor shall be entitled to payments on account as provided in Exhibit 7 Payment Schedule . All payments except for the final payment shall be considered payments on account ( Abschlagszahlungen ) and shall not be deemed to signify or imply acknowledgement ( Anerkenntnis ) or acceptance of the Works to which the particular payment on account relates. Invoices regarding payments on account ( Abschlagsrechnungen ) shall – to the extent provided for in no 10.1 and if the respective underlying Works were completed—become due for payment within 45 days from being received by Company.

 

On Company ’s request Contractor shall – within one week from receipt of the request – provide Company with invoices on account relating to Works which Company requests to be invoiced.

 

If mutually agreed upon by the parties Contractor has the right to submit to Company a partial final invoice ( Teilschlußrechnung ) relating to parts being subject to prior use or partial acceptance, provided that such partial final invoice does not constitute acceptance or transfer of risk to Company (unless provided otherwise in this Agreement ).

 

3.3.	German Income Tax Act

 

The parties clarify that the remuneration to be paid under this Agreement is subject to the provisions under section 48 German Income Tax Act ( Freistellungserkärung nach § 48 Einkommenssteuergesetz ), including the deduction provided for therein, to the extent applicable.

 

3.4.	Presupposition for Payments becoming due

 

No payment whatsoever shall become due prior to Contractor submitting to Company the performance guarantee provided for in no. 10.2, the refined lump sum price estimate provided for in no. 4 and Contractor submitting to Company a declaration ( Freistellungserklärung ) meeting the requirements of

 

19

section 48 German Income Tax Act ( Einkommenssteuergesetz ) or a declaration – justified—that Contractor will not submit such declaration.

 

Except for the first payment on account of [***]* (plus VAT as applicable from time to time) no payment whatsoever shall become due prior to an equity injection security ( belastbare Durchfinanzierungszusage being submitted to Company .

 

4.

Changes

 

Company shall be entitled to – in writing – request Contractor to execute changes or additional works, services and deliveries (“ Additional Works ”). Such changes or Additional Works shall be executed even if at the time of the written request agreement on the impact of the change or the Additional Works on the remuneration to be paid to Contractor has not been reached. In that case the impact on the remuneration shall be determined within a reasonable time from the Company´s request to execute changes or Additional Works.

 

The execution of changes or Additional Works prior to an agreement on the impact on the price shall not lead to a detrimental financial impact on Contractor . However, Contractor shall, prior to the execution notify Company in writing of the price impact, otherwise Contractor shall not be entitled to an increase of the remuneration.

 

If an order of Company for changes or Additional Works leads to the project being held up, interrupted or an extension of time, Contractor shall notify Company in writing prior to the commencement of the execution of the changes or of the Additional Works on the – fifth (5) working day from receipt of the written request. If Contractor fails to give such written notification in time, Contractor shall not be entitled to an extension of time.

 

Unless provided otherwise in this Agreement all provisions relating to Works and the execution of Works under this Agreement shall also apply to changes or Additional Works .

 

Company is, at any time, entitled to request Contractor not to execute certain Works or to reduce the scope of work. In this case Contractor is obliged to

*	Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004.

 

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immediately stop Works which Contractor is requested not to execute. The Parties clarify that this does not lead to a reduction of the remuneration Contractor is entitled to for Works already executed (the Parties clarify that works which are in progress are remunerated to the extent already carried out) in accordance with this Agreement prior to receipt of the request. Only in case and to the extent Contractor is in the course of duly executing the Works obliged to remunerate subcontractors or render other payments to third parties, which remuneration or payment can not be avoided (for example can be avoided since the change leads – in total—to an increased remuneration or payment) Company shall reimburse Contractor for such expenditures (such reimbursement shall be limited to the remuneration if the portion had be executed).

 

The Parties clarify that changes of quantities ( Massen and Mengen ) within the scope of work (the scope of work which relates to the lump sum provided for in no. 3.1) shall not lead to an adjustment of the remuneration.

 

The remuneration provided in no 3.1 of this Agreement shall – in case change or Additional Works are executed – be adjusted as follows:

 

4.1.	Adjustment can be calculated based on lump sum price calculation

 

Contractor based the lump sum provided for in no. 3.1 on the lump sum price calculation attached as Exhibit 11 Lump Sum Price Calculation .

 

4.1.1.

Works to be executed in addition

 

If due to a request for changes or Additional Works works, services or deliveries which are not part of the Works which form part of the wafer fabrication facility to be completed as described under no. 2.1 but which are equal to items, other parts of the Works or components etc. covered by the lump sum price calculation or the refined lump sum price calculation are requested to be executed and not part of the Works to be executed for the initial lump sum the remuneration is increased by the amount for the respective part of the change or Additional Works to be executed contained in the lump sum price calculation or, the refined lump sum price calculation (which based on and in line with the lump sum price calculation further details the lump sum price calculation and in which unit prices are allocated to all components, items etc.) if already delivered at the time of requesting the change or Additional Works

 

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underlying the works, services or deliveries to be executed or rendered in addition. The refined lump sum price calculation shall be submitted to Company by Contractor no later than November 30, 2003 and replace the the lump sum price calculation.

 

4.1.2.

Works not to be executed

 

If due to a request for changes or Additional Works , Wor