AMD 2004 Annual Report Download - page 236

10.6 Effect of Breach of Operations Shortfall Funding Requirement
Until the expiration of the 4-Year Period, either AMD Member’s or Fujitsu Member’s failure to fund its pro rata portion of (i) an Operations
Shortfall Amount pursuant to Section 4.4 or (ii) any other financing required pursuant to the terms of this Agreement shall be a “Breach” (such Member so
failing to fund, the “Breaching Member”). Upon the occurrence of a Breach, the non-breaching Member (the “Non-Breaching Member”) shall have the
following rights and remedies:
10.6.1Non-Material Breach: In the event of a Breach by the Breaching Member, the Non-Breaching Member shall have the following rights:
(a) without being deemed a Breach, the Non-Breaching Member may elect to withhold the funding of its pro rata portion of the Operations
Shortfall Amount (the “Non-Breaching Member’s Amount”), or if the Non-Breaching Member elects to withhold the Non-Breaching Member’s Amount but
has already advanced the Non-Breaching Member’s Amount to the Company, then AMD Member and Fujitsu Member shall cause the Company to refund the
Non-Breaching Member’s Amount to the Non-Breaching Member; however, it is understood that AMD Member, Fujitsu Member and the Company shall
reasonably agree upon a mechanism to prevent such an advance by a Non-Breaching Member; or
(b) Within ten (10) days of the Breach, the Non-Breaching Member may elect to fund the Non-Breaching Member’s Amount and a portion
or all of the Breaching Member’s pro rata portion of the Operations Shortfall Amount (such amount actually funded by the Non-Breaching Member on behalf of
the Breaching Member, the “Breaching Member’s Amount”). In exchange for funding the Breaching Member’s Amount, the Company will issue to the
Non-Breaching Member a convertible note in the form attached hereto as Exhibit F (a “Breach Convertible Note”) with a principal amount equal to the
Breaching Member’s Amount.
(1)Interest. Each Breach Convertible Note shall bear interest at a per annum rate described in Exhibit F.
(2)Ranking. Notwithstanding anything in Article 5 or any other provisions of this Agreement to the contrary, each Breach
Convertible Note shall rank senior to all other amounts payable by the Company to the Breaching Member (other than payments in respect of Taxes in
accordance with Section 5.1.1(a)). Accordingly, to the extent that any amounts are payable by the Company to the Breaching Member in respect of any other
debt or distributions of any kind, such amounts shall be paid to the Non-Breaching Member to be applied (i) first, against accrued interest under the Breach
Convertible Note and (ii) second, against outstanding principal under the Breach Convertible Note.
(3)Conversion. Notwithstanding the maturity date of any Breach Convertible Note, such Breach Convertible Note shall be
convertible on or after the date that is the earlier of (a) the date of delivery of an Offer Notice by the Breaching Member and (b) the date first after the expiration
of the Cure Period; provided, however, that when the Cure
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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.
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005