COOPERATION AGREEMENT DATED NOVEMBER 20, 2005Cooperation Agreement |
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Exhibit 10.48
Redacted Version
Confidential Treatment Marked
Cooperation Agreement
(hereinafter referred to as the “Agreement”)
between
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1. |
The Free State of Saxony, represented by the Saxon State Ministry of Finance and the Saxon State Ministry for Economic Affairs and Labor, represented by the Minister Dr. Horst Metz and Undersecretary Mrs. Andrea Fischer |
- hereinafter referred to as “Saxony” -
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and |
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2. |
Advanced Micro Devices, Inc., One AMD Place, Sunnyvale, CA 94088, USA |
- hereinafter referred to as “AMD” -
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and |
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3. |
M+W Zander Fünfte Verwaltungsgesellschaft mbH, Lotterbergstr. 30, 70499 Stuttgart, entered under HRB 23351 in the Commercial Register of the Stuttgart Local Court (Amtsgericht) |
- hereinafter referred to “M+W” -
Saxony, AMD and M+W will each be hereinafter referred to as a “Party” and together as the “Parties”.
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of the exhibit has been filed separately with the Securities and Exchange Commission.
Contents
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Preamble |
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3 |
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§ 1 |
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Objectives |
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4 |
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§ 2 |
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Formation of a Joint Undertaking |
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5 |
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§ 3 |
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Evaluation of the Joint Undertaking |
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5 |
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§ 4 |
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Capital Contribution; Holding Company |
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6 |
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§ 5 |
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Financing |
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10 |
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§ 6 |
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Grants and Allowances |
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12 |
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§ 7 |
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Counter Guarantees |
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12 |
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§ 8 |
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Accession of an Additional Industrial Partner |
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12 |
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§ 9 |
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Research and Development |
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13 |
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§ 10 |
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Agreement on Acceptance / Cost Plus Agreement |
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13 |
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§ 11 |
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Service Agreements |
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14 |
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§ 12 |
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Arbitrator |
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14 |
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§ 13 |
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Non-Discrimination |
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15 |
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§ 14 |
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Warranty by AMD |
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15 |
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§ 15 |
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Liability |
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15 |
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§ 16 |
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Interest |
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16 |
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§ 17 |
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EU Reservation |
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16 |
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§ 18 |
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Conditions Precedent |
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16 |
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§ 19 |
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Duration and Termination |
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17 |
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§ 20 |
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Confidentiality |
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18 |
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§ 21 |
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Responsibility for Costs and Expenses |
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20 |
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§ 22 |
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Press Release |
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20 |
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§ 23 |
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Arbitration Agreement |
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20 |
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§ 24 |
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Final Provisions |
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21 |
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PREAMBLE
The maintenance and development of Saxony as a center for microelectronics, in particular, of Dresden as a high-technology location, is a top priority political and structural goal of Saxony, in order to maintain existing and secure new qualified jobs. AMD intends to build a new facility in Dresden for the production of 300mm silicon wafers on which integrated circuits, particularly for microprocessors, will be manufactured (the “Wafers”). In addition to production, own research and development on a considerable scale to develop up to suitability for industrial production semiconductor manufacturing technology will be carried out at the new facility.
In December 2002, AMD entered into an extensive agreement with IBM for joint development (the Joint Development Agreement, hereinafter referred to as the “JDA”) of a technological basis for the production of chips for high-performance products of the future. The JDA encompasses cooperation on the 65- and 45 nm technology generations with the possibility of even smaller sized structures. This groundwork will be carried out on the basis of the 300 mm Wafers. AMD intends to use the results of this groundwork under the JDA in a new wafer production facility in particular for micro processors to be built in Dresden (hereinafter referred to as “Fab X”) with the support and participation of Saxony, to develop them to the industrial production stage and to manufacture them. The manufacturing technology is intended to be adjusted, by continuous and rapid improvement, to the requirements of mass production and further developed in accordance with market requirements. The management consultancy Arthur D. Little GmbH has on the instructions of Saxony examined and confirmed the technical and economic feasibility of Fab X in a report (hereinafter referred to as the “ADL Report”).
Fab X is intended to be built beside the existing Fab 30. The commencement of industrial production is planned for 2006. The full capacity for the exclusive requirements of AMD is intended to be 13,000 Wafer outs per month. Buildings and clean room are designed for a capacity of 20,000 Wafer outs per month, which is to be used [***]*. Up to approx. 1,035, and [***]* up to 1,400 -qualified new jobs are intended to be created in Fab X. Additional jobs at suppliers will also result. Saxony attaches particular importance on the fact that the technological and financial basis of Fab X is secured as much as possible and will be further developed in Fab X and furthermore that its capital bears
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Confidential treatment has been requested for portions of this exhibit. |
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reasonable interest (“stand alone”). A declaration of intent was entered into between Saxony and AMD on June 4, 2003, concerning the cooperation. The said declaration of intent is attached as Appendix A to this Agreement, the purpose of which is to implement the declaration of intent.
Fab X is intended to be built and operated by a special purpose entity in the form of a German limited partnership. The Parties intend to hold capital interests in such entity, and it is up to them whether they hold such interests directly or through separate holding companies, however, the contribution of Saxony and of M+W will partly be made in the form of a limited partner participation, and partly in the form of a typical silent partner participation. In addition, M+W simultaneously enters into a general contractor’s agreement for the construction of the necessary building modules and infrastructure. The general contractor’s agreement is attached as Appendix B hereto.
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§ 1 |
Objectives |
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1.1 |
The Parties intend to cooperate as direct or indirect partners for the purpose of the construction and operation of Fab X as further set out in the draft limited partnership agreement attached hereto as Appendix 1.1(a) (the “Limited Partnership Agreement”), and to create the financial bases for this. Besides, in accordance with the draft agreement attached hereto as Appendix 1.1(b) on the formation of a silent partnership (the “Silent Partnership Agreement”), Saxony and M+W will participate as typical silent partners in the joint undertaking (both agreements hereinafter together referred to as the “Partnership Agreements”). With respect to the limited partner participations and the silent partner participations of Saxony and M+W, the purchase agreements which are attached in their draft versions as Appendix 1.1(c) and Appendix 1.1(d) will be executed. |
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1.2 |
The joint undertaking is to be provided within the framework of this Agreement with the tangible and intangible resources and personnel so that a stand-alone operation of Fab X is ensured to the extent possible and financially reasonable. This also includes the License Agreement attached as Appendix 1.2. |
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1.3 |
The details of the project including the expected investment costs shall be in accordance with the project description attached hereto as Appendix 1.3. |
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§ 2 |
Formation of a Joint Undertaking |
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2.1 |
AMD has formed a limited liability partnership Limited Liability Company & Co. KG for the realization of the project. |
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2.2 |
The joint undertaking will be conducted in the name of AMD Fab X Limited Liability Company & Co. KG (hereinafter referred to as “AMD Fab X”). |
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2.3 |
Immediately upon taking effect of this Cooperation Agreement (see § 18), Saxony and M+W shall, in accordance with the Limited Partnership Agreement attached hereto as Appendix 1.1(a), join AMD Fab X as limited partners with legal and economic effect as of the day on which they are both entered in the Commercial Register. The Parties agree to execute the Limited Partnership Agreement of Fab X and to effect the registration in the Commercial Register immediately upon taking effect of this Cooperation Agreement. The Parties agree to sign the Silent Partnership Agreement attached hereto as Appendix 1.1(b) immediately upon taking effect of this Cooperation Agreement. |
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2.4 |
The capital contributions of the Parties will amount to a total of € 905 million, as specified in more detail in Section 4. |
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2.5 |
AMD Fab X LLC will conduct the business of AMD Fab X as the general partner with sole power of management and representation. In addition to those mentioned in Section 2.3 above, AMD Fab X Holding GmbH and AMD Fab X Admin GmbH shall be limited partners of AMD Fab X. The conduct of the operative business shall be the sole responsibility of the general partner AMD Fab X LLC, subject to the Limited Partnership Agreement. The other general partner will be a German limited liability company [GmbH] whose shares will be held by Saxony or the Saxony Holding Company (“Second General Partner”); the Second General Partner shall have no power of management and no power of representation and will participate neither in the assets nor in the results of AMD Fab X. |
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§ 3 |
ADL Report |
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On the instructions of Saxony and on the basis of information and intended plans provided by AMD and AMD’s subsidiaries – in particular the business plan provided, ADL has prepared the ADL Report on the economic and technological feasibility. For reasons of strict confidentiality, the ADL Report is not |
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attached to this Agreement, but one copy each will be provided to Saxony as principal, AMD and M+W. Saxony will grant to AMD Fab X a right of co-use in the ADL Report. The ADL Report is to be treated with the strictest confidentiality within the recipients’ organizations. AMD warrants that the information provided to ADL by AMD and AMD subsidiaries for the purpose of ADL preparing the expert opinion was given to the best of their knowledge and belief and that the business plan was drawn up according to recognized commercial principles. If the forecasts do not come to pass and/or the plans are not achieved, even though the information provided to ADL for the purpose of their preparing the report was correct and complete to AMD’s best knowledge and belief and even though the business plan was drawn up according to recognized commercial principles, this shall not affect the reciprocal rights of the Parties.
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§ 4 |
Capital Contributions, Holding Company |
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4.1.1 |
The parties undertake within the framework of their limited partner participation, to make the following capital contributions to AMD Fab X: |
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4.1.2 |
Limited Partners’ Capital Contributions I |
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AMD subsidiaries |
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Capital Contribution |
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€ |
3,232,000 |
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Saxony or Holding Company |
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Capital Contribution |
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1,105,000 |
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M+W |
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Capital Contribution |
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663,000 |
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Total |
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Limited Partners’ Capital Contributions I |
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€ |
5,000,000 |
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Of the Limited Partners’ Capital Contribution I initially a total of € 500,000, i.e. € 323,200 for the AMD subsidiaries and € 110,500 for Saxony, and € 66,300 for M+W, will be entered in the Commercial Register as the liability capital sums of those partners after taking effect of this Cooperation Agreement. The entry of the liability capital, which has been increased by € 4,500,000 up to € 5,000,000, will be caused simultaneously for all partners upon achievement of Saxony’s first milestone (LM I) according to the milestone regulation attached as Appendix 4.1.1. |
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The AMD subsidiaries have the right to increase prematurely the liability contribution to be made by them. The Limited Partners’ Capital Contribution I will become due at the dates set out in Appendix 4.1.1. The second sentence of Section 4.1.3 shall also apply to the Limited Partners’ Capital Contributions I. |
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4.1.3 |
Limited Partners’ Capital Contributions II |
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AMD subsidiaries |
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Capital Contribution |
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€ |
581,768,000 |
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Saxony or Holding Company |
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Capital Contribution |
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118,895,000 |
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M+W |
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Capital Contribution |
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59,337,000 |
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Total |
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Limited Partners’ Capital Contributions II |
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€ |
760,000,000 |
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The Capital Contributions II shall become due at the dates set out in Appendix 4.1.1 and will be paid in the installments as specified therein in more detail. t However, the Capital Contribution I and the first installment of Capital Contribution II by Saxony and by M+W will become due no earlier than at such date when transfer of title to the real estate as described in Appendix 4.2.2 of AMD Saxony Limited Liability Company & Co. KG (“AMD Saxony”) to AMD Fab X has been effected or instead the title re-registration has been applied for and the entry of such re-registration merely only requires issuance of the official record of changes by the municipal surveying authority and conveyance on the basis of such official record of changes. |
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4.2 |
Saxony and M+W agree to make the following typical silent partner capital contributions. |
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Saxony or Holding Company |
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Capital Contribution |
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€ |
80,000,000 |
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M+W |
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Capital Contribution |
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