Preview of our top selling Japan - Joint Venture Agreement
AMD / Fujitsu Limited - Joint Venture Agreement
JOINT VENTURE AGREEMENT
BETWEEN
ADVANCED MICRO DEVICES, INC.
AND
FUJITSU LIMITED
----------------------------
Confidential portions of this document have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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JOINT VENTURE AGREEMENT
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 "AMD INVESTMENT AGREEMENT". . . . . . . . . . 2
Section 1.2 "APPLICABLE LAW". . . . . . . . . . . . . . . 2
Section 1.3 "ARTICLES OF INCORPORATION" . . . . . . . . . 2
Section 1.4 "ASSOCIATED AGREEMENTS" . . . . . . . . . . . 2
Section 1.5 "BOARD OF DIRECTORS". . . . . . . . . . . . . 2
Section 1.6 "BUSINESS PLAN" . . . . . . . . . . . . . . . 2
Section 1.7 "COMBINED FINANCIAL
CONTRIBUTION". . . . . . . . . . . . . . . . 3
Section 1.8 "CONFIDENTIAL INFORMATION". . . . . . . . . . 3
Section 1.9 "EFFECTIVE DATE". . . . . . . . . . . . . . . 3
Section 1.10 "EPROM". . . . . . . . . . . . . . . . . . . 3
Section 1.11 "FLASH MEMORY" . . . . . . . . . . . . . . . 3
Section 1.12 "FUJITSU INVESTMENT AGREEMENT" . . . . . . . 4
Section 1.13 "GOVERNMENTAL APPROVALS" . . . . . . . . . . 4
Section 1.14 "GOVERNMENTAL AUTHORITY" . . . . . . . . . . 4
Section 1.15 "INDEPENDENT ACCOUNTING FIRM". . . . . . . . 4
Section 1.16 "INVESTMENT AGREEMENTS". . . . . . . . . . . 4
Section 1.17 "JOINT DEVELOPMENT AGREEMENT". . . . . . . . 4
Section 1.18 "JOINT VENTURE LICENSE
AGREEMENT". . . . . . . . . . . . . . . . . 5
Section 1.19 "JV PRODUCT" . . . . . . . . . . . . . . . . 5
Section 1.20 "LAND LEASE" . . . . . . . . . . . . . . . . 5
Section 1.21 "NONDISCLOSURE AGREEMENTS" . . . . . . . . . 5
Section 1.22 "PERCENTAGE INTEREST". . . . . . . . . . . . 5
Section 1.23 "REGULATIONS OF THE BOARD OF
DIRECTORS". . . . . . . . . . . . . . . . . 5
Section 1.24 "TECHNOLOGY CROSS-LICENSE
AGREEMENT". . . . . . . . . . . . . . . . . 5
Article 2. INCORPORATION. . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Formation of JV . . . . . . . . . . . . . . . 5
Section 2.2 The Name of JV. . . . . . . . . . . . . . . . 5
Section 2.3 Articles of Incorporation . . . . . . . . . . 6
Section 2.4 Capital Contributions . . . . . . . . . . . . 6
Section 2.5 Reimbursement of Incorporation
Expenses. . . . . . . . . . . . . . . . . . . 7
Article 3. MANAGEMENT OF JV . . . . . . . . . . . . . . . . . . . . . 7
Section 3.1 Meetings and Resolutions of
Shareholders. . . . . . . . . . . . . . . . . 7
Section 3.2 Election of Directors and
Statutory Auditors. . . . . . . . . . . . . . 8
Section 3.3 Representative Directors and
Directors with Titles . . . . . . . . . . . . 9
Section 3.4 Meetings and Resolutions of the
Board of Directors. . . . . . . . . . . . . . 9
Section 3.5 Statement of Policy.. . . . . . . . . . . . . 12
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Section 3.6 Manufacturing Activity. . . . . . . . . . . . 12
Section 3.7 [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. . . . . . . . . . . . 13
Section 3.8 Accounting and Reporting
Obligations . . . . . . . . . . . . . . . . . 13
Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES. . . . . . . . . . . . . 15
Section 4.1 Financing . . . . . . . . . . . . . . . . . . 15
Section 4.2 Land Lease. . . . . . . . . . . . . . . . . . 15
Section 4.3 Transfer of Shares;
Right of First Refusal. . . . . . . . . . . . 17
Section 4.4 Transfer of Fujitsu Employees . . . . . . . . 19
Section 4.5 Transfer and Assignment of AMD
Employees . . . . . . . . . . . . . . . . . . 19
Section 4.6 Confidentiality . . . . . . . . . . . . . . . 19
Article 5. ASSOCIATED AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 22
Article 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 23
Section 6.1 Representations and Warranties of
Fujitsu . . . . . . . . . . . . . . . . . . . 23
Section 6.2 Representations and Warranties
of AMD. . . . . . . . . . . . . . . . . . . . 24
Article 7. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . 26
Section 7.1 Effective Date. . . . . . . . . . . . . . . . 26
Section 7.2 Term. . . . . . . . . . . . . . . . . . . . . 26
Section 7.3 Triggering Events . . . . . . . . . . . . . . 27
Section 7.4. Causes of Dissolution . . . . . . . . . . . . 28
Section 7.5. Election of Non-Triggering
Party . . . . . . . . . . . . . . . . . . . . 29
Section 7.6 Noncompetition; Nonsolicitation . . . . . . . 29
Section 7.7. Name. . . . . . . . . . . . . . . . . . . . . 30
Section 7.8. Rights Under Associated
Agreements. . . . . . . . . . . . . . . . . . 30
Article 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.1. Force Majeure. . . . . . . . . . . . . . . . 31
Section 8.2. Assignment . . . . . . . . . . . . . . . . . 31
Section 8.3. Survival . . . . . . . . . . . . . . . . . . 31
Section 8.4. Notices. . . . . . . . . . . . . . . . . . . 32
Section 8.5. Export Control . . . . . . . . . . . . . . . 33
Section 8.6. Arbitration. . . . . . . . . . . . . . . . . 34
Section 8.7. Entire Agreement . . . . . . . . . . . . . . 35
Section 8.8. Modification . . . . . . . . . . . . . . . . 35
Section 8.9. Announcement . . . . . . . . . . . . . . . . 35
Section 8.10. Severability . . . . . . . . . . . . . . . . 35
Section 8.11. No Waiver. . . . . . . . . . . . . . . . . . 36
Section 8.12. Governing Law. . . . . . . . . . . . . . . . 36
Section 8.13. Language . . . . . . . . . . . . . . . . . . 36
Section 8.14. No Agency. . . . . . . . . . . . . . . . . . 36
Section 8.15. No Third Party Beneficiaries . . . . . . . . 37
Section 8.16. Headings . . . . . . . . . . . . . . . . . . 37
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Section 8.17. Construction and Reference . . . . . . . . . 37
Section 8.18. Governmental Approvals . . . . . . . . . . . 37
Section 8.19. Counterparts . . . . . . . . . . . . . . . . 37
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JOINT VENTURE AGREEMENT
Joint Venture Agreement ("Agreement") dated as of March 30, 1993, by and between ADVANCED MICRO DEVICES, INC. ("AMD"), a Delaware corporation having its principal place of business at 901 Thompson Place, Sunnyvale, California 94088-3453, U.S.A., and FUJITSU LIMITED ("Fujitsu"), a Japanese corporation having its registered place of business at 1015 Kamikodanaka, Nakahara-ku, Kawasaki-shi, Kanagawa-ken 211, Japan.
INTRODUCTION
A. AMD is engaged in the manufacture and sale of integrated circuit devices and has a wide and rich experience in this field of industry.
B. Fujitsu is also engaged in the manufacture and sale of integrated circuit devices and has a wide and rich experience in this field of industry.
C. AMD and Fujitsu desire to form a company with limited liability (kabushiki kaisha) under the laws of Japan ("JV") for the purpose of manufacturing certain integrated circuit devices, such as certain densities of erasable programmable read only memory ("EPROM") and flash memory ("Flash Memory") as more specifically defined by this Agreement.
D. AMD and Fujitsu desire to collaborate in developing certain process technologies and designs to be utilized in connection with such EPROM and Flash Memory.
E. AMD and Fujitsu desire to license to JV and to cross- license to each other certain technologies which are necessary
1 6 for JV to manufacture such integrated circuit devices.
ACCORDINGLY, in consideration of the foregoing premises and the covenants contained herein, the parties agree as follows:
Article 1. DEFINITIONS.
For the purpose of this Agreement, the following terms shall have the meanings hereinafter set forth:
Section 1.1 "AMD INVESTMENT AGREEMENT" shall have the meaning set forth in Section 5.E.
Section 1.2 "APPLICABLE LAW" shall mean, with respect to a party, any domestic or foreign, federal, state or local statute, law, ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority applicable to such party or its properties, business or assets.
Section 1.3 "ARTICLES OF INCORPORATION" shall mean articles of incorporation of JV written in the Japanese language and attached hereto as Exhibit A-1, as amended from time to time. For the convenience of the parties an English translation of the Articles of Incorporation is attached hereto as Exhibit A-2.
Section 1.4 "ASSOCIATED AGREEMENTS" shall have the meaning ascribed to such term in Article 5.
Section 1.5 "BOARD OF DIRECTORS" shall mean the board of directors of JV as from time to time constituted pursuant to the terms of this Agreement.
Section 1.6 "BUSINESS PLAN" shall mean a business plan of JV agreed to in writing by both parties hereto, as from time to
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7 time amended by a resolution of the Board of Directors.
Section 1.7 "COMBINED FINANCIAL CONTRIBUTION" shall mean, with respect to a party, the sum of (i) capital contributions made by such party pursuant to Section 2.4, (ii) loans to JV guaranteed by such party pursuant to Sections 4.1.C. and 4.1.D. and (iii) loans made directly to, or otherwise arranged by, such party pursuant to Section 4.1.E.
Section 1.8 "CONFIDENTIAL INFORMATION" shall mean any trade secrets, know-how, data, formulas, processes, intellectual property or other information, tangible or intangible, of one party that becomes known by the other party.
Section 1.9 "EFFECTIVE DATE" shall mean the latest to occur of (a) the date of this Agreement, (b) the date on which all requisite Governmental Approvals have been obtained, or (c) the first date on which all of the Associated Agreements, other than the Joint Venture License Agreement, are in effect.
Section 1.10 "EPROM" or "Electrically Programmable Read Only Memory" shall mean a non-volatile semiconductor memory device incorporating floating gate structure cells, which device is electrically programmable and erasable by using ultraviolet light. The device mainly consists of such floating gate structure cells with auxiliary logic circuits, if any, when such logic circuits are used solely for memory operation or interface to other products. OTPROM or One Time PROM, which is a certain non-volatile semiconductor device incorporating the same chip as EPROM and packaged without transparent windows for ultraviolet light, shall be included in the definition of EPROM.
Section 1.11 "FLASH MEMORY" shall mean a non-volatile semiconductor memory device incorporating floating gate structure cells, which device is programmable and erasable by electrically
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8 injecting and electrically discharging electric charges into and from floating gates. The device mainly consists of such floating gate structure cells, with auxiliary logic circuits, if any, when such logic circuits are used solely for memory operation or interface to other products.
Section 1.12 "FUJITSU INVESTMENT AGREEMENT" shall have the meaning set forth in Section 5.D.
Section 1.13 "GOVERNMENTAL APPROVALS" means all approvals, consents, authorizations and similar actions from all Governmental Authorities that the parties agree are desirable in order to consummate the transactions contemplated hereunder or under any of the Associated Agreements.
Section 1.14 "GOVERNMENTAL AUTHORITY" shall mean any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, court, government or self-regulatory organization, commission, tribunal, organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.
Section 1.15 "INDEPENDENT ACCOUNTING FIRM" shall mean a certified public accountant at audit firm qualified under the Japanese Certified Public Accountants Act, Law No. 103, 1948, as amended.
Section 1.16 "INVESTMENT AGREEMENTS" shall have the meaning set forth in Section 5.E.
Section 1.17 "JOINT DEVELOPMENT AGREEMENT" shall have the meaning set forth in Section 5.A.
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Section 1.18 "JOINT VENTURE LICENSE AGREEMENT" shall have the meaning set forth in Section 5.C.
Section 1.19 "JV PRODUCT" shall mean any product listed as a JV Product in the Joint Development Agreement, or so designated by the Board of Directors.
Section 1.20 "LAND LEASE" shall have the meaning set forth in Section 4.2.A.
Section 1.21 "NONDISCLOSURE AGREEMENTS" shall mean the Nondisclosure Agreements between Fujitsu and AMD dated March 12, 1992 and July 20, 1992 and the Confidentiality Agreement between Fujitsu and AMD dated October 16, 1992.
Section 1.22 "PERCENTAGE INTEREST" shall mean with respect to a party, the percentage of JV's issued and outstanding shares held by such party.
Section 1.23 "REGULATIONS OF THE BOARD OF DIRECTORS" shall have the meaning set forth in Section 3.4.F.
Section 1.24 "TECHNOLOGY CROSS-LICENSE AGREEMENT" shall have the meaning set forth in Section 5.B.
Article 2. INCORPORATION.
Section 2.1 Formation of JV. Promptly following the Effective Date, the parties shall form JV in Japan for the purpose of the production, marketing and sale of JV Products.
Section 2.2 The Name of JV. The name of JV shall be as set forth in the Articles of Incorporation in Japanese and "Fujitsu AMD Semiconductor Limited" in English. Fujitsu shall file a temporary application for registration to reserve JV's Japanese
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Section 2.3 Articles of Incorporation. The Articles of Incorporation are hereby incorporated herein and made a part hereof. In the event of any ambiguity or conflict arising between the terms and conditions of this Agreement and those of the Articles of Incorporation, to the extent legally permissible, the terms and conditions of this Agreement shall prevail.
Section 2.4 Capital Contributions.
A. As soon as practicable following the Effective Date, each party shall purchase shares of common stock of JV as follows:
Party Number of Shares Consideration ----- ---------------- ------------- Fujitsu 1,001 Y50,050,000 AMD 999 Y49,950,000
B. Pursuant to a separate schedule to be agreed between the parties, the parties shall make additional capital contributions to JV until the parties' aggregate capital contributions reach Y40,000,000,000, and JV shall issue additional shares reflecting such contributions. Additional contributions shall be made by the parties in cash, in proportion to their respective Percentage Interests.
C. The authorized capital of JV shall initially be Y400,000,000, to be represented by 8,000 shares of common stock with a par value of Y50,000 each. Thereafter, the authorized capital of JV shall be increased from time to time in accordance with a schedule to be agreed upon between the parties. As specified in the Business Plan, the maximum authorized capital of JV shall be Y40,000,000,000, to be represented by 800,000 shares of such common stock.
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D. Unless otherwise agreed by both parties, Fujitsu shall hold 50.05%, and AMD 49.95%, of the issued and outstanding shares of JV. In the event that new shares of JV are issued, each of the parties shall have the right to purchase such shares in an amount that is proportionate to its respective Percentage Interest.
Section 2.5 Reimbursement of Incorporation Expenses. JV shall reimburse Fujitsu for expenses incurred directly by Fujitsu in connection with the incorporation of JV to the extent permitted under the laws of Japan.
Article 3. MANAGEMENT OF JV.
Section 3.1 Meetings and Resolutions of
Shareholders.
A. Each party, in its capacity as a shareholder, shall have the right from time to time to call a meeting of the shareholders.
B. The quorum required for a meeting of the shareholders shall be shareholders representing, in person or by proxy, not less than two thirds (2/3) of the total number of issued and outstanding shares of JV.
C. Unless otherwise required by the laws of Japan or otherwise explicitly provided herein, no shareholders' resolutions shall be effective unless adopted by the affirmative votes of shareholders holding a majority of the shares present at a meeting of the shareholders.
D. Resolutions with respect to the following matters shall be adopted by the affirmative vote of shareholders [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the issued and outstanding
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(1) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
E. Interpreters may attend meetings of shareholders upon the request of either party.
Section 3.2 Election of Directors and Statutory
Auditors.
A. JV shall be administered by a Board of Directors composed of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] directors, [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] directors of whom shall be nominated by AMD, and [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of whom shall be [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of whom shall be nominated by Fujitsu.
B. If a vacancy occurs on the Board of Directors, a new director shall be nominated by the party that nominated the director whose office has been vacated, and an election to fill such vacancy shall be held at a shareholders' meeting to be called without delay.
C. JV shall have two (2) statutory auditors (kansayaku), [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. The full-time statutory auditor (jookin kansayaku) shall be the statutory auditor nominated by Fujitsu.
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D. The parties agree to exercise their respective voting rights as shareholders of JV so as to ensure that the persons nominated as directors and statutory auditors by the parties are elected.
E. Each individual nominated by one party as a director or statutory auditor shall be subject to the reasonable approval of the other party.
Section 3.3 Representative Directors and
Directors with Titles.
A. JV shall have a chairman and a vice chairman, each of whom shall be a representative director. The chairman shall be nominated by Fujitsu and the vice chairman by AMD.
B. Two full-time standing directors (jookin torishimariyaku) shall be elected from among the directors nominated by Fujitsu. The Board of Directors shall determine whether such full-time standing directors shall be representative directors and/or directors with titles such as president, executive vice president, executive director or managing director.
C. Each of the parties shall cause the directors it has nominated to exercise their voting rights as members of the Board of Directors so as to effect the election of the chairman, vice chairman, representative directors and directors with titles in accordance with Sections 3.3.A. and B. above.
Section 3.4 Meetings and Resolutions of the Board
of Directors.
A. A regular meeting of the Board of Directors shall be held once each calendar quarter.
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B. The chairman, the vice chairman, or any two directors acting together shall have the right to call, from time to time, a special meeting of the Board of Directors.
C. The quorum required for a meeting of the Board of Directors shall be two thirds (2/3) of all the directors of JV.
D. Resolutions of the Board of Directors shall be adopted by the affirmative vote of a majority of the members of the Board of Directors present at a meeting, except as provided in Section 3.4.E. below.
E. Resolutions with respect to the following matters shall be adopted by the affirmative vote of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the entire Board of Directors:
(1) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(3) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(4) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
(5) Approval of:
a. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
b. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
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c. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
d. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
e. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
f. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
g. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
h. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(6) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(7) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(8) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(9) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(10) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(11) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
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F. Following the formation of JV, the Board of Directors shall adopt Regulations of the Board of Directors written in the Japanese language, in the form of Exhibit B-1 hereto (the "Regulations of the Board of Directors"). For the convenience of the parties, an English translation of such Regulations is attached hereto as Exhibit B-2.
G. When any issue cannot be resolved by the Board of Directors at two consecutive meetings, the managements of AMD and of Fujitsu (Electronic Devices Group, or its successor) shall consult with each other in a good faith attempt to resolve such issue.
H. Interpreters may attend meetings of the Board of Directors upon the request of either party.
Section 3.5 Statement of Policy.
A. The business and affairs of JV shall be carried on and conducted in a sound, prudent and constructive manner for the purpose of building a successful and financially strong JV corporation.
B. The day-to-day operations of JV shall be managed by the full-time standing directors nominated and elected under Section 3.3.B. above. Such operations shall be conducted in accordance with this Agreement, the Business Plan and the operating and capital budgets approved by the Board of Directors.
Section 3.6 Manufacturing Activity. JV shall construct a semiconductor wafer fabrication facility capable of mass production with eight-inch wafer line, and shall manufacture JV Products in accordance with the Business Plan.
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Section 3.7 [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 3.8 Accounting and Reporting
Obligations.
A. JV's fiscal year shall be the twelve (12) month period ending on March 31. Japanese accounting principles shall be adopted.
B. JV shall provide the following reports and statements to the parties in English and Japanese within the time periods set forth below:
(i) Within twenty (20) days after the closing of each month, a report on booking and billing monthly results, balance sheet, profit and loss statement, cash flow, head count and business operations.
(ii) Within thirty (30) days after the closing of each quarter, a report on booking and billing quarterly results, balance sheet, profit and loss statement, cash flow, head count, financial change and business operations.
(iii) Within three (3) months after the end of each fiscal year, a report on booking and billing annual results, balance sheet, profit and loss statement, cash flow, inventory of major properties, head count, shareholders' equity, business operation, and annual proposals governing appropriation of profits or covering losses.
C. The parties agree that JV shall designate Fujitsu's Independent Accounting Firm, as approved by Fujitsu's shareholders, as the Independent Accounting Firm of JV, unless otherwise determined by the affirmative vote of shareholders holding not less than two-thirds (2/3) of the issued and
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D. The annual accounting report of JV shall be audited at the expense of JV by its Independent Accounting Firm in accordance with the laws of Japan.
E. Each party shall, upon reasonable written notice to JV and to the other party, have access to JV's books, records, procedures, employees and similar sources of data and information concerning JV's financial operations.
F. Upon reasonable written notice to JV and the other party, but not more often than once every twelve (12) months, each party shall have a right to perform a special audit of JV by independent outside auditors, at that party's own cost. In addition, upon such reasonable notice each party shall have the right to perform or have performed, at that party's own cost, such audits as are necessary to meet such party's financial reporting obligations.
G. The JV shall provide to each party full access to the books and records of JV, and shall provide to each party the accounting information such party requires to comply with its own financial reporting requirements, provided that any cost involved in providing such information shall be paid by the requesting party.
H. The JV shall have the right, and each party hereto shall have the right to compel JV, to have independent outside auditors, upon reasonable written notice to the other party and not more than once each twelve (12) months, at JV's cost, examine the books and records of the other party for the purpose of auditing the calculation of sales proceeds or any amounts due to JV.
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19 Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES.
Section 4.1 Financing.
A. Except as otherwise explicitly agreed, the parties shall bear equal responsibility for financing JV.
B. Both parties recognize that, in addition to the capital contributions made pursuant to Section 2.4 above, JV will need additional sums for working capital and for long term capital, which shall be borrowed by JV pursuant to arrangements to be made by the parties.
C. Until JV becomes self-financing, the parties shall guarantee third-party loans made to JV in proportion to their respective Percentage Interests.
D. Both parties shall use their best efforts to arrange for JV to receive loans from Japanese government-related financial institutions for JV's long-term capital. Such loans shall be guaranteed by the parties in proportion to their respective Percentage Interests.
E. In the event that JV is unable to secure necessary financing, the parties themselves shall advance the necessary funds to JV, each party lending that portion of the required amount which is proportionate to such party's Percentage Interest. Each party may arrange third-party financing, with or without such party's guaranty, in lieu of any such advance.
Section 4.2 Land Lease.
A. JV shall construct its semiconductor wafer fabrication facility on land to be leased from Fujitsu pursuant to a 30-year lease (the "Land Lease"), which lease may be renewed
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20 for additional terms in accordance with Japan's Land and House Leasing Act of 1991, as amended, and the terms and conditions of such lease agreement.
B. (i) If all, or substantially all, of the assets of JV are to be offered for sale (whether in connection with a dissolution of JV or otherwise) Fujitsu shall have the right to purchase JV's fabrication facility at a price equal to the book value of such facility, as determined by JV's Independent Accounting Firm as of the close of the preceding quarter, and shall be given written notice of such intended sale not less than one hundred and twenty (120) days prior to any such offering for sale. Fujitsu shall either exercise or decline to exercise such right, by a written statement delivered within one hundred and twenty (120) days following the receipt of such notice. Failure to deliver such notice within such period shall be considered a declination by Fujitsu. If Fujitsu declines to exercise such right to purchase, it will consent to the assignment of JV's interest under the Land Lease to the purchaser of such assets.
(ii) AMD will take all action necessary to assure that if it transfers shares of JV to any person or entity other than Fujitsu or a wholly-owned subsidiary of Fujitsu, the transferee shall agree in writing that Fujitsu shall be entitled to exercise a right of first refusal to acquire all, but not less than all, of the JV shares to be so transferred, at the purchase price at which the transferee intends to sell such shares. AMD agrees to review with Fujitsu the precise language to be incorporated in appropriate documentation under the circumstances, in an effort to perfect such statement of rights to Fujitsu's reasonable satisfaction. Such documentation will include a provision that if Fujitsu declines to acquire such shares: (x) the seller shall be entitled to sell such shares at the reported price, but not less than the reported price, within ninety (90) days after the end of the period within which Fujitsu
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21 may exercise its right to acquire such shares, (y) Fujitsu will consent to the assignment of JV's interest under the Land Lease, and (z) Fujitsu shall give such consents as may be required to continue to operate the facility; provided, however, that Fujitsu will not be required to incur any expense or obligation in order to carry out the provisions of this sentence.
Section 4.3 Transfer of Shares;
Right of First Refusal.
A. Except as otherwise explicitly provided in Section 4.2 or 7.5, no share or any interest therein in JV shall be validly sold, transferred or otherwise disposed of for consideration or otherwise, and no purported transferee shall be recognized as a shareholder of JV for any purpose whatsoever unless such transfer is in accordance with this Section 4.3.
B. Neither party shall pledge or otherwise encumber any of its shares or any interest therein in JV at any time without the prior written consent of the other party.
C. Neither party shall sell or transfer any shares in JV for a period of five (5) years following the Effective Date. In the event that either party (the "Selling Party") desires to sell or transfer its shares in JV following such five (5)-year period, it shall first offer to sell the shares to the other party (the "Nonselling Party") and, upon the request of such Nonselling Party, to any third party designated by such Nonselling Party, at a price equal to the lower of (i) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] or (ii) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. No owner of JV shares may sell or transfer less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of its shares in JV.
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D. (i) A Nonselling Party to which an offer is made pursuant to Section 4.3.C. above and/or any third party designated by such Nonselling Party, shall have one hundred and twenty (120) days from the date of receipt of the offer, during which period such Nonselling Party shall have reasonable access to JV's books and records, within which to accept such offer.
(ii) In the event that the Nonselling Party and/or its designee do not accept the offer to purchase all of the Selling Party's shares, the Selling Party may, within ninety (90) days following the expiration of such one hundred and twenty (120) day period, seek the Board of Directors' approval, by not less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] votes, of a sale or transfer of its shares to a specified third party; provided, however, that in the event that a sale or transfer to such third party is proposed on terms less favorable to the Selling Party than the terms of the offer made pursuant to Section 4.3.C. above, the Nonselling Party and/or a third party designated by such Nonselling Party shall have the right to purchase the shares on such less favorable terms, which right may be exercised by notice to the Selling Party within fourteen (14) d...
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