Amd Holding Research, Design & Development

EXHIBIT 10.50(k)


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AMD HOLDING
RESEARCH, DESIGN AND DEVELOPMENT AGREEMENT


Dated 11 March 1997


between


AMD SAXONY HOLDING GMBH,


and


ADVANCED MICRO DEVICES, INC.


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AMD HOLDING
RESEARCH, DESIGN AND
DEVELOPMENT AGREEMENT


THIS AMD HOLDING RESEARCH, DESIGN AND DEVELOPMENT AGREEMENT (this "Agreement") dated as of 11 March, 1997 is entered into between AMD SAXONY HOLDING GmbH, a limited liability company organized and existing under the laws of Germany and registered in the Commercial Register of the Dresden County Court, HRB 13931 ("AMD Holding"), and ADVANCED MICRO DEVICES, INC., a corporation organized and ----------- existing under the laws of the State of Delaware, U.S.A. ("AMD Inc.").
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WHEREAS, AMD Saxony Manufacturing GmbH ("AMD Saxonia") is a wholly-owned
----------- Subsidiary of AMD Holding, which in turn is a wholly-owned Subsidiary of AMD Inc., and


WHEREAS, AMD Saxonia, AMD Holding and AMD Inc. (together, the "AMD Companies")
------------- are currently involved in the initial planning stages of a project pursuant to which AMD Saxonia will construct, own and operate inter alia a Plant to manufacture Wafers using high-volume semiconductor Wafer fabrication processes along with an adjoining Design Center, each of which is to be located in Dresden, Germany, and


WHEREAS, it is expected that the Design Center will employ qualified individuals, mostly hired from local colleges, universities and technical institutes and having advanced educational degrees, to conduct bona fide research on advanced semiconductor products and on the redesign and development of variants of existing semiconductor products, and


WHEREAS, this research is expected to focus on system architecture of microprocessors, circuit designs and improvements of computation and compression algorithms, and the products involved are expected to cover a range of advanced logic devices such as microprocessors and circuits for telecommunications and multimedia applications, and


WHEREAS, AMD Inc. is engaged in research, development, design, manufacturing and marketing of semiconductor products, and


WHEREAS, concurrently herewith AMD Holding and AMD Saxonia are entering into an AMD Saxonia Research, Design and Development Agreement (as amended, supplemented or otherwise modified from time to time, the "AMD Saxonia Research Agreement"),
------------------------------ pursuant to which AMD Holding will obtain, and AMD Saxonia will provide, assistance in the area of research, design and development of semiconductor products, and


WHEREAS, AMD Inc. wishes to obtain assistance in the area of research, design and development of semiconductor products from AMD Holding, and AMD Holding is willing to provide such assistance, in each case on the terms and subject to the conditions of this Agreement, and


WHEREAS, concurrently herewith (i) AMD Holding and AMD Saxonia are entering into that certain AMD Saxonia Wafer Purchase Agreement (as amended, supplemented or otherwise modified from time to time, the "AMD Saxonia Wafer Purchase
-------------------------- Agreement"), and (ii) AMD - ---------


Saxonia, AMD Holding and AMD Inc. are entering into that certain License Agreement (as amended, supplemented or otherwise modified from time to time, the "License Agreement"), and ----------------- WHEREAS, capitalized terms not defined herein shall have the meaning assigned to them in the AMD Saxonia Research Agreement.


NOW, THEREFORE, in consideration of the mutual covenants expressed herein, the parties hereby agree as follows:


ARTICLE I
Statement of Work


(a) On the terms and subject to the conditions provided herein, (i) AMD
Inc. hereby retains AMD Holding to provide, or to arrange for AMD Saxonia
to provide, research, design and development services ("Services") related
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to semiconductor products to or for the benefit of AMD Inc. or, at its
request, to or for the benefit of Fujitsu AMD Semiconductor Limited
("FASL") or Subsidiaries of AMD Inc. other than AMD Holding and AMD
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Saxonia, and (ii) AMD Holding hereby agrees to use its reasonable
commercial efforts to provide, or to arrange for AMD Saxonia to provide,
the Services. In furtherance of the foregoing, AMD Holding shall furnish,
or shall cause AMD Saxonia to furnish, all personnel, facilities, labor,
materials, tools, equipment and supervision as may be necessary and
commercially reasonable to provide, or to arrange for AMD Saxonia to
provide, the Services, including without limitation to research, design and
develop custom circuits, schematics and layouts, and to perform such other
activities, as AMD Inc. shall from time to time reasonably request (the
"Design Activity"); it being understood and agreed that, for all purposes
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of this Agreement, the Services and the Design Activity shall be in all
respects comparable and consistent with the "Services' and the "Design
Activity" under, and as defined in, the AMD Saxonia Research Agreement.


(b) AMD Inc. acknowledges that AMD Holding's obligation is to use its
reasonable commercial efforts to provide, or to arrange for AMD Saxonia to
provide, the Services and Design Activities, and that AMD Holding therefore
does not undertake and cannot guarantee that the results of the Services
and Design Activities will achieve the goals set therefor or that such
results will have any commercial value. AMD Inc. further acknowledges and
agrees that AMD Holding shall not be required at any time to take any steps
hereunder to provide the Services and/or Design Activities to the extent
such steps at such time could reasonably be expected to delay the
"Completion Date" under, and as defined in, the AMD Saxonia Wafer Purchase
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Agreement.


(c) AMD Holding further agrees, during the term of this Agreement, (i) only
to perform Services and engage, or to arrange for AMD Saxonia to perform
and engage, in Design Activities specifically requested by AMD Inc. which
request may be made by AMD Inc., FASL or one of AMD Inc.'s Subsidiaries
acting pursuant to authorization from AMD Inc. hereunder and (ii) not to
provide research, design and development services for persons or entities
other than AMD Inc., its Subsidiaries or FASL, without the prior consent of
AMD Inc.


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(d) AMD Holding and AMD Inc. agree that this Agreement is limited to
research, design and development of semiconductor products. AMD Holding
further agrees that during the term of this Agreement it shall cause AMD
Saxonia to comply with AMD Saxonia's obligations under the AMD Saxonia
Research Agreement.


ARTICLE II
Payments


(a) AMD Inc. agrees to pay AMD Holding for the Services and Design
Activities performed under this Agreement an amount equal to the amount
charged to AMD Holding under the AMD Saxonia Research Agreement, plus Value
Added Tax, if applicable.


(b) AMD Inc. will authorize the commencement of Services at such time as
AMD Holding is able to cause AMD Saxonia to perform the Services
contemplated under the AMD Saxonia Research Agreement, but in any event no
later than when the Design Center is completed to AMD Holding's reasonable
satisfaction. The parties may agree that the Services and Design Activity
may be phased in over a period of time prior to the completion of the
Design Center.


(c) AMD Holding shall within 30 days after the end of each of its fiscal
months, provide AMD Inc. with an installment invoice in respect of such
fiscal month detailing the Services rendered and the Design Activity
undertaken and specifying costs with respect to such Services and Design
Activity, and the amount payable by AMD Inc. under this Article II with
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respect thereto. Some of these costs may be estimated, budgeted or accrued
costs, but shall be subject to a quarterly adjustment to reflect actual
costs when finally determined.


(d) Under this Agreement, invoices shall be rendered and payments shall be
made in the lawful currency of the Federal Republic of Germany ("DM").
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Invoices shall be paid in full within thirty (30) days of the receipt of
such invoice. Payments under this Agreement from AMD Inc. to AMD Holding
shall be made by wire transfer deposited into [*], or such other account of
AMD Holding specified by AMD Holding with the prior written consent of the
Agent (a copy of which consent shall be delivered by AMD Holding to AMD
Inc.) with not less than 15 days written notice to AMD Inc. All amounts
under this Agreement not paid when due from AMD Inc. shall bear interest at
the rate of 7.0% per annum from the date due until paid, calculated on the
basis of actual days and months elapsed. Accrued interest hereunder shall
be due and payable at the end of each calendar month.


(e) The obligations of AMD Inc. hereunder, including, without limitation,
the obligation to pay for any Services or Design Activity performed by or
on behalf of AMD Holding, are intended to be absolute and unconditional.
The parties hereto hereby expressly acknowledge, agree, and understand that
the payment by AMD Inc. of all amounts payable by it hereunder shall in no
way be prevented, delayed, or otherwise affected as a result of any dispute
between the parties (or between any of their Affiliates) nor by any breach
of this Agreement or any other agreement entered into in connection
herewith and/or any


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* CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


adverse change in the financial or economic condition of AMD Holding, AMD
Saxonia or any Affiliate thereof, including situations or conditions which
would render any or all of AMD Holding, AMD Saxonia or any Affiliate
thereof in liquidation, bankruptcy, or any kind of insolvency. All
obligations of AMD Inc. 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, any rights or remedies
that are available to AMD Inc. under any other agreements or any applicable
laws. The foregoing notwithstanding, AMD Inc. shall be entitled to setoff,
and to raise rights of retention, in respect of payment claims due from it
hereunder only to the extent its counterclaim is undisputed by AMD Holding
or has been the subject of a final, binding arbitral or court decision.


(f) AMD Holding shall keep and maintain, in accordance with German
generally accepted accounting principles, books of account and other
records with respect to the costs and other amounts charged by AMD Holding
to AMD Inc. under this Agreement.


(g) AMD Inc. shall, upon reasonable written notice to AMD Holding, have a
right to perform special audits of AMD Holding by either outside auditors
or one or more of the internal auditors of the AMD Companies, at AMD Inc.'s
own cost. In addition, AMD Holding shall cause AMD Saxonia to permit AMD
Inc. to perform special audits of AMD Saxonia by either outside auditors or
one or more of the internal auditors of the AMD Companies, at AMD Inc.'s
own cost. The scope of the foregoing audits shall not be limited in any
manner.


(h) AMD Holding and AMD Inc. agree that the purpose of this Agreement and
the related Services and Design Activity is the creation of intellectual
property. However, from time to time, such intellectual property may be
transferred in the form of tangible personal property. The transfer of any
tangible personal property is solely for the purpose of conveying or
exchanging intellectual property or "Ideas". Examples of such tangible
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personal property may include, but are not limited to, magnetic tapes,
pattern generation tapes, test tapes, schematic diagrams, prototypes and
prototype tooling. Both parties agree that, in the aggregate, the fair
market value of such tangible property transferred to AMD Inc. shall not
exceed U.S. $5,000 dollars per year. The provisions of this paragraph are
intended solely for valuation purposes under the various state sales and
use tax rules in the U.S.A. and do not in any way alter the compensation
provisions of this Article II, which is the sole and controlling provision
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for the compensation to AMD Holding for the Services and Design Activities
under this Agreement.


ARTICLE III
Work Performed Outside Germany


(a) The parties recognize that to implement the intent and purpose of this
Agreement, and to bring the research, design and development efforts of AMD
Holding to the stage at ...