{\rtf1\deflang1033\deflangfe1033\margl720\margr720\margt360\margb360{\stylesheet{\fs20\lang1033\snext0 Normal;} {\s1\sb240\keepn{\*\pn \pnlvl1\pndec\pnprev1\pnstart1\pnsp144}\b\f0\fs30\lang1033 \sbasedon0\snext0 heading 1;} {\s2\sb200\keepn{\*\pn \pnlvl2\pndec\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs26\lang1033 \sbasedon0\snext0 heading 2;} {\s3\sb180\keepn{\*\pn \pnlvl3\pndec\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs22\lang1033 \sbasedon0\snext0 heading 3;} {\s4\sb160\keepn{\*\pn \pnlvl4\pnucltr\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs22\lang1033 \sbasedon0\snext0 heading 4;} {\s5\sb140\keepn{\*\pn \pnlvl5\pncltr\pnprev1\pnstart1\pnsp144}\b\f0\fs20\lang1033 \sbasedon0\snext0 heading 5;} {\s6\tqc\lang1033\sbasedon0\snext6 footer;} {\*\cs16 \additive\super\sbasedon10 footnote reference;} {\*\cs18 \additive\sbasedon10 page number;}} {\fonttbl{\f0\fnil Times New Roman;}{\f1\fnil Courier New}{\f2005\fnil Courier New;}{\f2010\fnil Wingdings;}{\f2020\fnil Webdings;}{\f2\fnil Arial;}{\f3\fnil Arial;}{\f4\fnil LucidaHandwriting;}{\f5\fnil Symbol;}{\f6\fnil Symbol;}{\f7\fnil Ferdsch;}{\f30\fnil Myriad Cn Semibold;}{\f31\fnil Myriad Roman;}{\f50\fnil Courier New;}{\f51\fnil Times New Roman;}{\f52\fnil Arial;}{\f53\fnil Symbol;}{\f54\fnil Wingdings;}{\f55\fnil Wingdings 2;}{\f56\fnil Wingdings 3;}{\f57\fnil Webdings;}{\f58\fnil Arial Narrow;}{\f59\fnil Arial Unicode MS;}{\f60\fnil Cyberbit;}{\f61\fnil Morningstar 1U Light;}{\f62\fnil Calibri;}} {\colortbl;\red0\green0\blue0;\red127\green0\blue0;\red0\green0\blue255;\red127\green127\blue127;\red0\green51\blue153;\red255\green204\blue0;\red255\green255\blue255;\red246\green244\blue236;\red0\green0\blue0;} {\*\bkmkstart filing_1}{\*\bkmkend filing_1}{\*\bkmkstart doc_1_1}{\*\bkmkend doc_1_1} \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WASHINGTON, D.C. 20549 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (MARK ONE) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES EXCHANGE ACT OF 1934. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR THE FISCAL YEAR ENDED DECEMBER 25, 1994 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THE SECURITIES EXCHANGE ACT OF 1934 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR THE TRANSITION PERIOD FROM TO \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION FILE NUMBER 1-7882 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Exact name of registrant as specified in its charter) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELAWARE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (State or other jurisdiction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporation or organization) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 94-1692300 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (IRS Employer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Identification Number) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONE AMD PLACE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUNNYVALE, CALIFORNIA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Address of principal executive offices) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Zip Code) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrant's telephone number, including area code: (408) 732-2400 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities registered pursuant to Section 12(b) of the Act: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TITLE OF EACH CLASS) (NAME OF EACH EXCHANGE ON \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHICH REGISTERED) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $.01 PAR VALUE COMMON STOCK NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEPOSITARY CONVERTIBLE EXCHANGEABLE NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREFERRED STOCK \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities registered pursuant to Section 12(g) of the Act: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NONE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate by check mark whether the registrant (1) has filed all reports \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be filed by Section 13 or 15(d) of the Securities Exchange Act of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1934 during the preceding 12 months (or for such shorter period that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registrant was required to file such reports), and (2) has been subject to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing requirements for the past 90 days. Yes X No \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- --- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate by check mark if disclosure of delinquent filers pursuant to Item \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 405 of Regulation S-K is not contained herein, and will not be contained, to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql best of registrant's knowledge, in definitive proxy or information statements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference in Part III of this Form 10-K or any amendment to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K. [X] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Aggregate market value of the voting stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by nonaffiliates as of February 27, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $2,813,646,457 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate the number of shares outstanding of each of the registrant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classes of common stock, as of the latest practicable date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 95,942,821 SHARES AS OF FEBRUARY 27, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DOCUMENTS INCORPORATED BY REFERENCE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Portions of the Annual Report to Stockholders for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 25, 1994, are incorporated into Parts I, II and IV hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Portions of the Proxy Statement dated on or before March 31, 1995, for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Meeting of Stockholders to be held on May 9, 1995, are incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into Part III hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16{\*\bkmkstart part_1_2_1}{\*\bkmkend part_1_2_1}\pard\plain\cf1\f50\fs16\ql PART I \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_1}{\*\bkmkend item_1_3_1}\pard\plain\cf1\f50\fs16\ql ITEM 1. BUSINESS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERAL \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. was incorporated under the laws of the state \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Delaware on May 1, 1969. The mailing address of its executive offices is One \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Place, P.O. Box 3453, Sunnyvale, California 94088-3453, and its telephone \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number is (408) 732-2400. Unless otherwise indicated, the terms the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Corporation" and "AMD" in this report refer to Advanced Micro Devices, Inc. and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation designs, develops, manufactures and markets complex \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monolithic integrated circuits for use by manufacturers of a broad range of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronic equipment and systems. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRODUCTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's products primarily consist of standard or catalog items \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or are made from designs based on such items, as opposed to custom circuits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designed for a single customer. While a substantial portion of AMD's products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are standard or catalog items, increasingly many of its recently developed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products are designed for specific applications such as telecommunications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal computers, engineering workstations, optical disk memory or local area \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql networks. As a service to certain major customers, the Corporation modifies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portions of these application-specific devices to meet specific customer needs. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The resulting devices are produced in significant volumes for such customers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD began as an alternate-source manufacturer of integrated circuits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally developed by other suppliers and has gradually shifted to proprietary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products (i.e., products resulting from the Corporation's design or technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql innovations). The Corporation has made a significant commitment to research and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development which has contributed toward its becoming a leader in manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and process technology within the integrated circuit industry. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has focused its product development activities on the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql areas of its business: (1) X86, K86 and other microprocessors and related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embedded processors for personal computers, (2) applications solutions products, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (3) high-volume commodity products such as programmable logic and non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql volatile memory devices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Personal computer (PC) products include microprocessors and related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embedded processors used in computers. AMD's applications solutions products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are focused on networks, voice/data communications (WORLD NETWORK/R/), and on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer peripherals, computer interfaces and mass storage. High-volume \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commodity products include programmable logic devices ("PLDs") and other non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql volatile memory devices (such as FLASH Memory). PLDs and FLASH Memory devices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are typically produced by more than one manufacturer, subject to intense \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competition, and broadly applicable across a wide customer base. Since most of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's products are utilized in personal computers and related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql peripherals, the Corporation's future growth is closely tied to the performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the PC industry. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microprocessors \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X86 Microprocessors. A microprocessor is the central processing unit (CPU) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a computer. A microprocessor processes system data and controls \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql input/output, peripheral and memory devices. A microprocessor may also be used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with other processors such as microcontrollers which are embedded \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors contained in peripherals or other coprocessors which perform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain functions such as arithmetic calculations. The X86 architecture, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally developed by Intel Corporation, has been the leading architecture for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal computer microprocessors. AMD's X86 microprocessor strategy has been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to serve as an alternative source for X86 microprocessors, introducing products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at comparable prices to competitive products, but with additional customer- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql driven features. In 1993, the Corporation entered into a license agreement with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microsoft/R/, the personal computer industry's leading supplier of operation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql systems software, pursuant to which the Microsoft Windows/TM/ compatible logo \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql now appears on AMD's microprocessor packaging and advertising indicating that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's product is compatible with such software. The Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believes that this approach is consistent with what it perceives to be the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer industry's shift from an emphasis on hardware compatibility to software \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compatibility. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the second quarter of 1993, the Corporation began to offer its Am486/TM/ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql family of products. The Corporation began shipping Am486DX products in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql second quarter of 1993, and began volume shipment of its Am486SX products in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994. The 486DX family of microprocessors accounted for approximately thirty- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seven percent (37%) of the Corporation's 1994 revenues. A significant portion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation's total revenues, profits, and margins were attributable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am486 products. Prior to a settlement with Intel Corporation in January, 1995, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Am386 and Am486 products were the subject of microcode \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql litigations with Intel Corporation. (For more information see Item 3, Legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Proceedings, Number 2.). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Embedded Control Microprocessors. The Corporation's proprietary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am29000/TM/ family of RISC microprocessors is used extensively by a wide range \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of customers for embedded control applications. Examples of these applications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include high-performance laser printer controllers, high-resolution graphics \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql controllers, communications controllers, and accelerator cards. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K86 Microprocessors. The Corporation expects that, in the second half of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1995, it will offer its next generation of microprocessor products known as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K86, based on superscalar RISC-type architecture. The K86 products are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designed to be compatible with operating system software such as Microsoft \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Windows. Production of the initial K86 products, known as K-5, is presently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scheduled to commence in the second half of 1995. The Corporation is currently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the process of developing additional K86 products. The K86 products are not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designed to use any Intel copyrighted microcode; however, they do rely on patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses from several companies, including Intel Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applications Solutions Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Computer Systems, Interfaces and Mass Storage. The Corporation offers a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql range of products which are utilized in a variety of computer systems. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products include integrated circuits that work with central processing units to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manage selected input/output system functions such as to control disk drives, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql keyboards, printers and communications and networking devices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation also supplies a range of products specially designed to add \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional functions, improve performance and reduce costs in computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql peripheral, interface or mass storage applications. These are generally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql special-purpose products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are designed for a specific application. In the case of some large \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers, these products are tailored for specific customer needs. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Networks and Voice/Data Communications. The Corporation provides a wide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql variety of products for a broad spectrum of connectivity solutions. These \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include applications in central office switches, PBX equipment, voice/data \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminals, and different performance classes of Local Area Networks (LANs) used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to connect workstations and personal computers. In addition to providing the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuits for these applications, the Corporation also provides \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql various forms of hardware evaluation tools, development software and interface \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql software. The Corporation offers several Ethernet products designed for use on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal computer motherboards and add-in cards. AMD also is a supplier of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql chip sets to support the 100-megabit-per-second Fiber Distributed Data Interface \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (FDDI) local area network standard which is primarily used in network backbones \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to connect high performance workstations and servers. The Corporation has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also developed, in cooperation with systems manufacturers, a family of devices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the 10Base-T standard, which allows transmission of data using Ethernet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protocols on twisted-pair wiring, rather than on the more expensive coaxial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cable. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Subscriber Line Interface Circuit (SLIC) and the Subscriber Line Audio- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Processing Circuit (SLAC/TM/) are an integral part of a design for digital \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telephone switching equipment. The SLIC connects the user's telephone wire to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the telephone company's digital switching equipment. The SLAC is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coder/decoder which converts analog voice signals to a digital format and back. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql High-Volume Commodity Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Programmable Logic Devices (PLDs). The Corporation is a supplier of high- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql speed, field-programmable integrated circuits. PLDs generally afford a user \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased design flexibility relative to standard logic devices. The initial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql design time and design cost in customizing a programmable device is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significantly less than designing a custom integrated circuit or customizing a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gate array logic device. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Volatile/Volatile Memories. Memory components are used to store \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer programs and data entered during system operation. There are two types \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of memory storage capability, volatile and non-volatile. Volatile memories \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include Dynamic and Static Random Access Memories (DRAMs and SRAMs). Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql volatile memories retain data when system power is shut off, while volatile \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memories do not. Non-volatile memories include Erasable Programmable Read-Only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memories (EPROMs) and FLASH Memory. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's memory products are primarily non-volatile memories used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a wide range of applications such as PCs, workstations, peripherals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrumentation, PBX equipment, avionics and a variety of other equipment where \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programmed data storage is needed. The Corporation offers a family of CMOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EPROM devices from 64K (64,000 bits) to 4 megabits (4,000,000 bits) in density. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has also developed a family of FLASH Memories to address \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the emerging market for PC memory cards, solid-state disks, cellular \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communications and networking applications. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture with Fujitsu Limited. In 1993, AMD and Fujitsu Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Fujitsu) formed a joint venture for the development, manufacture and sale of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuits. Through the joint venture, the two companies have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constructed and are operating an $800 million wafer fabrication facility in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Aizu-Wakamatsu, Japan to produce non-volatile memory devices such as EPROMs and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FLASH Memories. The new facility is presently scheduled to begin volume \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production in late 1995, and will utilize eight-inch wafers and process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technologies capable of producing products with geometries of one-half (0.5) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql micron or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql smaller. AMD and Fujitsu will not independently produce EPROM and FLASH Memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products with geometries of one-half (0.5) micron or smaller outside of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joint venture. Currently, the primary mission of the joint venture is the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production of FLASH Memory devices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The percentages of the equity of the joint venture owned by the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Fujitsu are 49.95% and 50.05%, respectively. Each company contributes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql toward funding and supporting the joint venture in proportion to its ownership \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage. AMD is expected to contribute approximately one-half of its share \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of funding in cash as equity investment, and may be required to guarantee third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party loans made to the joint venture for the remaining one-half. Each company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is obligated to invest up to approximately $200 million as equity in the joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql venture. (For more information, see Item 7, Management's Discussion and Analysis \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Results of Operations and Financial Condition contained in the 1994 Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report to Stockholders ("Management's Discussion").) In connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joint venture, the Corporation and Fujitsu have entered into various joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development, cross-license and investment arrangements. Accordingly, AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu will provide their product designs and process and manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technologies to the joint venture. In addition, both companies will collaborate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in developing manufacturing processes and designing integrated circuits for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joint venture. The right of each company to use the licensed intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property of the other with respect to certain products is limited to certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql geographic areas. Consequently, AMD's ability to sell certain products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporating Fujitsu intellectual property, whether or not produced by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joint venture, is also limited in certain territories, including the United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kingdom and Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MARKETING AND SALES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD markets and sells its products primarily to original equipment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturers (OEMs) of computation and communication equipment. AMD's products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are sold under the AMD/R/ trademark. The Corporation has an agreement with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq Computer Corporation (Compaq) under which the Corporation supplies Compaq \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with microprocessor products; however, the agreement does not require Compaq to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase microprocessor products from the Corporation. The Corporation sells to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a broad base of customers; no single customer accounted for more than ten \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent (10%) of sales during the fiscal year ended December 25, 1994. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation employs a direct sales force through its principal facilities in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Santa Clara County, California, and field offices throughout the United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and abroad (primarily Europe and the Asia-Pacific Basin). The Corporation also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sells its products through third-party distributors and independent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives in both domestic and international markets pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nonexclusive agreements. The distributors also sell products manufactured by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's competitors, including those products for which the Corporation is an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternate source. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Distributors typically maintain an inventory of AMD's products. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, pursuant to its agreements with the distributors, employs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures which provide protection to the distributors for their inventory of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's products against price reductions as well as products that are slow moving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or have been discontinued by the Corporation. These agreements, which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql canceled by either party on a specified notice, generally contain a provision \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the return of AMD's products to the Corporation in the event the agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the distributor is terminated. (See Note 1 of Notes to Consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Statements contained in the 1994 Annual Report to Stockholders.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD has established sales subsidiaries that have offices in Belgium, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Canada, China, France, Germany, Hong Kong, Italy, Japan, Korea, Singapore, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sweden, Switzerland, Taiwan, and the United Kingdom. (See Note 11 of Notes to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Financial Statements contained in the 1994 Annual Report to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stockholders.) The international sales force also works with independent sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives and distributors in approximately 34 countries, including those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where AMD has sales subsidiaries. The Corporation's \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql international sales operations entail political and economic risks, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expropriation, currency controls, exchange fluctuations, changes in freight \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rates, and changes in rates and exemptions for taxes and tariffs. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation has not experienced any material adverse effects associated with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such risks. (For more information, see Item 7, Management's Discussion.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BACKLOG \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD manufactures and markets a standard or catalog line of products. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consequently, a significant portion of its sales are made from inventory on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current basis. Sales are made primarily pursuant to (1) purchase orders for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current delivery of standard items, or (2) agreements covering purchases over a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of time, which are frequently subject to revision and cancellation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generally, in light of current industry practice and experience, the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not believe that such agreements provide meaningful backlog figures or are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessarily indicative of actual sales for any succeeding period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMPETITION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Historically, the semiconductor industry has experienced rapid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technological advances together with substantial price reductions in maturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. After a product is introduced, prices normally decrease over time as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production efficiency and competition increase, and a successive generation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products is developed and introduced for sale. Competitive factors in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor industry center primarily around market acceptance, timing of new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products and a product's performance, price and availability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Numerous firms compete with AMD in the manufacture and sale of integrated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits. Some of these firms have resources greater than those of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and do not depend upon integrated circuits as their principal source \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of revenue. There is also significant captive production by certain large users \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of integrated circuits, such as manufacturers of computers, telecommunications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment and consumer electronics products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD competes for integrated circuit market share with Texas Instruments, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Motorola, National Semiconductor, Intel, North American Philips, and with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql several prominent Japanese firms. These firms include Nippon Electric Co., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hitachi, Toshiba, Fujitsu, Matsushita and Mitsubishi, all of whom are making \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql active efforts to increase their respective and collective worldwide market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares. (For more information concerning Fujitsu, see the discussion on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joint venture with Fujitsu above.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All of the above-mentioned competitors are either substantially larger in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both gross sales and total assets than AMD or are part of larger corporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enterprises to whose resources, financial and other, the competitors have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql access. In addition to the above, many other companies dedicated to only one or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two process technologies and product types compete with the Corporation in those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technologies and product types. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESEARCH AND DEVELOPMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's expenses for research and development in 1992, 1993 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994, were $227,860,000, $262,802,000, and $279,984,000, respectively. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses represented 15.0%, 16.0% and 13% of sales in 1992, 1993 and 1994, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively. AMD's research and development expenses are charged to operations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as incurred. Most of the research and development personnel are integrated into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the engineering staff. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MANUFACTURING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product design and development, and wafer fabrication activities are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently conducted at AMD's facilities in California and in Texas. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary of Sony \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation manufactures bipolar products for the Corporation in San Antonio, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas, using equipment owned by AMD. Nearly all product assembly and final \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql testing are performed at the Corporation's manufacturing facilities in Penang, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Malaysia; Singapore; and Bangkok, Thailand, or by subcontractors in Asia. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited amount of testing of products destined for delivery in Europe and Asia \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is performed at the Corporation's facilities in Basingstoke, England. (See also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the discussion on the joint venture with Fujitsu above.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Foreign manufacture entails political and economic risks, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql political instability, expropriation, currency controls and fluctuations, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changes in freight rates and in interest rates, and exemptions for taxes and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tariffs. For example, if the Corporation were not able to assemble and test its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products abroad, or if air transportation between the United States and these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities were disrupted, there could be a material adverse effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's operations. The Corporation has not experienced any material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse effects associated with such risks. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In July 1993, the Corporation commenced construction of its 700,000 square \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foot submicron semiconductor manufacturing facility in Austin, Texas (FAB 25). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation estimates that the cost of this facility will be approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1.3 billion when fully equipped. The facility is presently scheduled to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commence volume production in late 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In early 1994, the Corporation entered into an agreement with Digital \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment Corporation ("Digital") under which Digital agreed to provide a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundry in Queensferry, Scotland, for production of the Corporation's Am486 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. In late 1994, Digital commenced production of Am486 wafers for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. The Digital foundry was acquired in late 1994 by Motorola, Inc. and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foundry arrangement has been assumed by Motorola. The Corporation also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entered into a foundry arrangement in the third quarter of 1994 with Taiwan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Manufacturing Corporation, Ltd. (TSMC) for production of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am486 microprocessors. Volume production under the TSMC arrangement is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presently scheduled to commence before the end of 1995. The TSMC arrangement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extends through 1997. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Raw Materials. Certain of the raw materials used by the Corporation in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the manufacture of its products are available from a limited number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suppliers in the United States and elsewhere. For example, for several types of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the integrated circuit packages that are purchased by AMD, as well as by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority of other companies in the semiconductor industry, the principal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suppliers are Japanese companies. Shortages could occur in various essential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials due to interruption of supply or increased demand in the industry. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD were unable to procure certain of such materials from any source, it would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be required to reduce its manufacturing operations. To date, the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has not experienced significant difficulty in obtaining the necessary raw \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Environmental Regulations. The Corporation is subject to a variety of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental regulations related to the use, storage, handling, discharge or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposal of toxic, volatile or otherwise hazardous chemicals used in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing process. The Corporation believes that it is currently in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance in all material respects with these regulations and that it has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained all necessary environmental permits to conduct its business, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permits generally relate to the discharge of hazardous wastes. Nevertheless, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure to comply with present or future regulations could result in fines being \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposed on the Corporation, suspension of production, alteration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's manufacturing processes or cessation of operations. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations could require the Corporation to acquire expensive remediation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment or to incur other expenses to comply with environmental regulations. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (See Item 3, Legal Proceedings, Number 1.) Any failure by the Corporation to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control the use, disposal or storage of, or adequately restrict the discharge \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, hazardous substances could subject the Corporation to future liabilities. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY AND LICENSING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation and its subsidiaries have been granted 820 United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patents, and approximately 469 patent applications are pending in the United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States. In certain cases, the Corporation has filed corresponding applications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in foreign jurisdictions. The Corporation expects to file future patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications in both the United States and abroad on significant inventions as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it deems appropriate. The Corporation has entered into numerous cross-licensing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and technology exchange agreements under which it both transfers and receives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology and intellectual property rights. Although the Corporation attempts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to protect its intellectual property rights through patents, copyrights, trade \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secrets and other measures, there can be no assurance that the Corporation will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be able to protect its technology adequately or that competitors will not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql able to develop similar technology independently. There can be no assurance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any patent applications that the Corporation may file will be issued or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that foreign intellectual property laws will protect the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intellectual property rights. There can be no assurance that any patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensed by or issued to the Corporation will not be challenged, invalidated or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumvented or that the rights granted thereunder will provide competitive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advantages to the Corporation. Furthermore, there can be no assurance that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others will not independently develop similar products, duplicate the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's products or design around the patents licensed by or issued to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql From time to time AMD has been notified that it may be infringing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intellectual property rights of others. If any such claims are asserted against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation, the Corporation may seek to obtain a license under the third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party's intellectual property rights. The Corporation could decide, in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternative, to resort to litigation to challenge such claims. Such challenges \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could be extremely expensive and time consuming and could materially adversely \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the Corporation's business, financial condition and results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations. No assurance can be given that all necessary licenses can be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained on satisfactory terms, nor that litigation may always be avoided. (See \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also Item 3, Legal Proceedings, Number 2.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EMPLOYEES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 25, 1994, AMD and its subsidiaries employed approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11,800 employees. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I{\*\bkmkstart item_1_3_2}{\*\bkmkend item_1_3_2}\plain\cf1\f50\fs16\ql TEM 2. PROPERTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's principal engineering, manufacturing, warehouse and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative facilities comprise approximately 2 million square feet and are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located in Santa Clara County, California and in Austin, Texas. (See Item 1, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Manufacturing and Item 7, Management's Discussion). Over 1.25 million square \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql feet of this space is in buildings owned by the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In 1992, the Corporation entered into certain operating leases and an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement for the purchase of certain property containing a building with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 318,000 square feet, located on 45.6 acres of land in Sunnyvale, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California (One AMD Place). In early 1994, the Corporation began utilizing One \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Place for its corporate sales, marketing and administrative offices. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement provides the Corporation with the option to purchase One AMD Place \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the lease term. At the end of the lease term, the Corporation is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligated to either purchase One AMD Place or arrange for the sale of One AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Place to a third party with a guarantee of residual value to the seller of One \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Place. In 1993, the Corporation entered into a lease agreement for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 175,000 square feet located adjacent to One AMD Place to be used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with One AMD Place. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation also owns or leases facilities containing approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 722,800 square feet for its operations in Malaysia, Singapore and Thailand. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (See Item 1, Manufacturing and Item 7, Management's Discussion). Of the entire \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql worldwide facilities owned or leased by the Corporation, approximately 588,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql square feet are currently vacant. In addition, approximately 700,000 square feet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are currently vacant until the construction of the Corporation's new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing facility in Austin, Texas (FAB 25) is completed in 1995. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation holds 74 undeveloped acres of land in the Republic of Ireland. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation also has an equity interest in 58 acres of land in Albuquerque, New \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mexico. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation leases 33 sales offices in North America and 16 sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offices in Asia and Europe for its direct sales force. These offices are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located in cities in major electronics markets where concentrations of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers are located. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases covering the Corporation's facilities expire over terms of generally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 to 20 years. The Corporation anticipates no difficulty in either retaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occupancy of any of its facilities through lease renewals prior to expiration or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through month-to-month occupancy, or replacing them with equivalent facilities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (See Note 13 of Notes to Consolidated Financial Statements contained in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994 Annual Report to Stockholders.) \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_3}{\*\bkmkend item_1_3_3}\pard\plain\cf1\f50\fs16\ql ITEM 3. LEGAL PROCEEDINGS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Environmental Matters. Since 1981, the Corporation has discovered, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigated and begun remediation of three sites where releases from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underground chemical tanks at its facilities in Santa Clara County, California \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely affected the groundwater. The chemicals released into the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql groundwater were commonly in use in the semiconductor industry in the wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fabrication process prior to 1979. At least one of the released chemicals \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (which is no longer used by the Corporation) has been identified as a probable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carcinogen. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In 1991, the Corporation received four Final Site Clean-up Requirements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders from the California Regional Water Quality Control Board, San Francisco \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bay Region (RWQCB) relating to the three sites. One of the sites (Final Site \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clean-up Requirements Order No. 91-102) includes clean-up of groundwater \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination from TRW Microwave, Inc. (TRW), Philips Semiconductor (formerly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signetics Corporation) and the Corporation, which the RWQCB claims merged. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation is proceeding jointly with Philips and TRW to clean up the merged \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination and the parties are contributing to the clean-up equally. However, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there has been no allocation of responsibility for the contamination between the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. Another of the sites (Final Site Clean-up Requirements Order Nos. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 91-139 and 91-140) includes clean-up of groundwater contamination from National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Corporation, the Corporation and others, which the RWQCB claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql merged. National Semiconductor Corporation and the Corporation have been named \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the orders as primarily responsible and have commenced clean-up efforts in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with their respective orders. However, there has been no allocation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of responsibility for the groundwater contamination. The third site (Final Site \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clean-up Requirements Order No. 91-101) is primarily the responsibility of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In each instance mentioned above, the Corporation conducted appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programs of remedial action that involved soil removal, installation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monitoring and extraction wells and water treatment systems, disposal of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inoperative tank systems, and repair and alterations to existing facilities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The final clean-up plans include continued groundwater monitoring, extraction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and treatment and, in one instance, soil vapor extraction. Federal and state \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental agencies have approved the final clean-up plans being implemented. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has not yet determined to what extent the costs of such remedial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions will be covered by insurance. The three sites are on the National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Priorities List (Superfund). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Corporation fails to satisfy federal compliance requirements or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inadequately performs the compliance measures, the government (a) can bring an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action to enforce compliance, or (b) can undertake the desired response actions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql itself and later bring an action to recover its costs and penalties, up to three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql times the costs of clean-up activities, if appropriate. It is expected that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these matters will not have a material adverse effect on the financial condition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or results of operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A notice dated October 3, 1994 was received by the Corporation from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Department of Ecology of the State of Washington indicating that the Department \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql had determined the Corporation to be a potentially liable person for the release \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of hazardous substances on a site located in Yakima, Washington. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation is currently investigating this claim. The Corporation believes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the foregoing environmental matter will not have a material adverse effect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the financial condition or results of operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. AMD/Intel Litigations and Settlement. On January 11, 1995, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation reached an agreement with Intel Corporation ("Intel") to settle all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently outstanding litigation between the companies. The terms of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement include the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) AMD will have a fully paid-up, nonexclusive, world-wide, royalty- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql free, perpetual license to copy and distribute the microcode and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control code in the Intel287(TM), Intel386(TM) and Intel486(TM) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor product families. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) AMD agreed that it has no right to copy any other Intel microcode \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the Pentium(TM) Processor microcode, the P6 microcode and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 486 ICE (in-circuit emulation) microcode. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) The companies agreed to negotiate a new patent cross-license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement to become effective January 1, 1996. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) AMD agreed to pay Intel $58 million in settlement of claims for past \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages related to AMD's distribution of Am486(R) microprocessors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing Intel's 486 ICE microcode. As ordered in a 1992 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitration between the companies, Intel will pay AMD approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $18 million in damages (which includes interest) awarded by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrator for breach of contract and will not contest certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights granted AMD in the arbitration which are described more fully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below under "AMD/Intel Technology Agreement Arbitration." The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation recorded both the ICE case damages and the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award in 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) Intel and AMD will drop all cases against each other, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appeals, currently pending in the courts. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) AMD will have the right to use foundries for Am486 products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing Intel microcode for up to 20 percent of annual total unit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shipments of Am486 microprocessors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) AMD and its customers will receive a license for Intel's "Crawford \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql '338" patent, covering memory management. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (8) The two companies agreed not to initiate legal action against one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another for any activity occurring prior to January 6, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The settlement agreement resolved the following legal proceedings which had \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been pending between the companies: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a. AMD/Intel Technology Agreement Arbitration. A 1982 technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange agreement between AMD and Intel had been the subject of a dispute \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which was submitted to arbitration through the Superior Court of Santa Clara \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql County, California. The dispute centered around issues relating to whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel breached its agreement with AMD and whether that breach injured AMD, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql well as the remedies available to AMD for such a breach. In February 1992, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrator awarded AMD several remedies, including the following: monetary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages and interest, a permanent, royalty-free, nonexclusive, nontransferable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql worldwide right to all Intel copyrights, patents, trade secrets and mask work \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, if any, contained in the then-current version of AMD's Am386 family of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors; and a two-year extension, until December 31, 1997, of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyright and patent rights granted to AMD under a 1976 Cross License Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between AMD and Intel, insofar as those rights concern the Am386 microprocessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql family. Intel appealed the decision as it related to the technology award. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ultimately a judgment on the award was entered in the Corporation's favor, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the judgment was affirmed by the California Supreme Court. Pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql settlement, Intel will pay AMD $18 million in damages and interest pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the arbitrator's award and will drop further appeals of the judgment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b. 287 Microcode Litigation. (Case No. C-90-20237, N.D. Cal.) On \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 23, 1990, Intel filed an action against the Corporation in the U.S. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql District Court, Northern District of California, seeking an injunction and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages with respect to the Corporation's 80C287, a math coprocessor designed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql function with the 80286. Intel's suit alleged several causes of action, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including infringement of Intel copyright on the Intel microcode used in its 287 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql math coprocessor, mask work infringement, unfair competition by means of false \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advertising and unauthorized copying of the Intel 287 microcode by the third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party developer of the AMD 80C287. Pursuant to the settlement, AMD will have a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully paid-up, non-exclusive, world-wide, royalty-free, perpetual license to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microcode in the Intel287 microprocessor product family. A stipulation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dismissal was filed January 26, 1995 and all claims, counterclaims and defenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising out of this action were dismissed with prejudice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c. 386 Microcode Litigation. (Case No. A-91-CA-800, W.D. Tex. and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Case No.C-92-20039, N.D. Cal.) On October 9, 1991, Intel filed an action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Corporation in the U.S. District Court for the Western District of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas (Case No. A-91-CA-800, W.D. Tex.), This action was transferred to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S. District Court, Northern District of California (Case No. C-92-20039, N.D. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cal.). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In this action, Intel claimed copyright infringement of what Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described as: (1) its 386 microprocessor microcode program and revised programs, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) a "control program" stored in a 386 microprocessor programmable logic array \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (3) Intel In-Circuit Emulation (ICE) microcode. The complaint sought \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages and injunctive relief arising out of the Corporation's development, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture and sale of its Am386 microprocessors and sought a declaratory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment concerning two license agreements between the companies, including a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claim for a declaratory judgment that AMD's license rights to Intel's microcodes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would expire on December 31, 1995, and that AMD would no longer be able sell \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product containing Intel microcode after that date. Pursuant to the settlement, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD will have a fully paid-up, non-exclusive, world-wide, royalty-free, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perpetual license to the microcode in the Intel386 microprocessor product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql family. A stipulation of dismissal was filed January 20, 1995 and all claims, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterclaims and defenses arising out of this action were dismissed with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prejudice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql d. 486 Microcode Litigation. (Case No. C-93-20301 PVT, N.D. Cal.) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On April 28, 1993, Intel filed an action against AMD in the U.S. District Court, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Northern District of California, seeking an injunction and damages with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Corporation's Am486 microprocessor. The suit alleged several causes of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action, including infringement of various Intel copyrighted computer programs. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel sought damages and injunctive relief based on the following claims: (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's alleged copying and distribution of 486 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Processor Microcode Programs" and "Control Programs"; and (2) AMD's alleged \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copying of 486 "Processor Microcode" as an intermediate step in creating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary microcodes for the AMD version of the 486. Intel also sought a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declaratory judgment that (1) AMD had induced third-party copyright infringement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through encouraging third parties to import Am486-based products ; (2) AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license rights to Intel microcode would expire as of December 31, 1995, and AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could no longer sell any products containing Intel microcode after that date ; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) AMD's license rights to Intel microcodes would not extend to In-Circuit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Emulation (ICE) microcode ("ICE Claim"); and (4) AMD would not be licensed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorize third party foundries to copy the Intel microcode. Intel also sought \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages and injunctive relief based on AMD's alleged copying and distribution of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel's "386 Processor Microcode Program" in AMD's 486 microprocessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the settlement, the parties agreed to dismiss all claims, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterclaims and defenses raised in this action with the exception of the ICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Claim. AMD consented to the entry of a permanent injunction prohibiting its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution of 486 products containing the ICE microcode after January 15, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and agreed to pay $58 million to Intel for past damages relating to the ICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Claim. AMD will have a fully paid-up, non-exclusive, world-wide, royalty-free, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perpetual license to the microcode in the Intel486 microprocessor product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql family, excluding the 486 ICE microcode. AMD will have the right to use outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundries to produce Am486 microprocessors containing Intel microcode for up to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 percent of its annual total unit shipments of Am486 microprocessors. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties have filed with the court a stipulation for the dismissal with prejudice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for this action and the entry of a permanent injunction relating to the ICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Claim. The Corporation anticipates that the dismissal and the permanent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injunction will be entered by the court in accordance with the stipulation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql e. Antitrust Case Against Intel. On August 28, 1991, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation filed an antitrust complaint against Intel in the U.S. District \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court for the Northern District of California (Case No. C-91-20541-JW-EAI), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleging that Intel engaged in a series of unlawful acts designed to secure and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintain a monopoly in iAPX microprocessor chips. The complaint alleged that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel illegally coerced customers to purchase Intel chips through selective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allocations of Intel products and tying availability of the Intel 80386 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchases of other products from Intel, and that Intel filed baseless lawsuits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against AMD in order to eliminate AMD as a competitor and to intimidate AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. The complaint requested significant monetary damages, and an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injunction requiring Intel to license the 80386 and 80486 to AMD, or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate relief. Pursuant to the settlement, a stipulation of dismissal was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed January 20, 1995 and all claims, counterclaims and defenses arising out of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this action were dismissed with prejudice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql f. Business Interference Case Against Intel. On November 12, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992, the Corporation filed a proceeding against Intel in the Superior Court of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Santa Clara County, California (Civil Case No. 726343), for tortious \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interference with prospective economic advantage, violation of California's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unfair Competition Act, breach of contract and declaratory relief arising out of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel's efforts to require AMD's customers to pay to Intel patent royalties if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they purchased 386 and 486 microprocessors from AMD. The patent involved, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to as the Crawford '338 patent, covered various aspects of how the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel 386 microprocessor, the Intel 486 microprocessor and future X86 processors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manage memory and how these microprocessors generate memory pages and page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tables when combined with external memory and multi-tasking software such as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microsoft Windows(TM), OS/2(R) or UNIX(R). The action was removed to the Federal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql District Court (Case No. C-92-20789, (N.D. Cal.) where AMD amended its complaint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to include causes of action for violation of the Lanham Act and a declaration of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patent invalidity and unenforceability. The complaint alleged that Intel was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demanding royalties for the use of the Intel patents from the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers, without informing the Corporation's customers that the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license arrangement with Intel protected the Corporation's customers from an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel patent infringement lawsuit. No royalties for the license were charged to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers who purchased these microprocessors from Intel. Intel filed a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterclaim against AMD for inducing infringement of the Crawford '338 patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by computer manufacturers and others. This case was stayed pending resolution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the International Trade Commission Proceeding, discussed below. Pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the settlement, AMD and its customers will have a license for the Crawford '338 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patent. A stipulation of dismissal was filed January 19, 1995 and all claims, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterclaims and defenses arising out of this action were dismissed with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prejudice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql g. International Trade Commission Proceeding. The United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql International Trade Commission Proceeding (the "ITC Proceeding") (Investigation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 337-TA-352) was filed by Intel on May 7, 1993, against two respondents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Twinhead International and its U.S. subsidiary, Twinhead Corporation. Twinhead \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is a Taiwan-based manufacturer which is a customer of both AMD and Intel. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Twinhead purchases microprocessors from AMD and Intel, and incorporates these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors into computers sold by Twinhead. Intel claimed that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respondents induce computer end-users to infringe the Crawford '338 patent when \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the computers containing AMD microprocessors are used with multi-tasking \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql software such as Windows, UNIX or OS/2. Intel was seeking a permanent exclusion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order from entry into the United States of certain Twinhead personal computers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and an order directing Twinhead to cease and desist from demonstrating, testing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise using such computers in the United States. AMD intervened in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ITC Proceeding as a real party in interest. Pursuant to the settlement AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its customers will have a license under the Crawford '338 patent, which, insofar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as AMD and its products are concerned, eliminates the basis on which Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sought relief against the respondents in the ITC Proceeding. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. In Re AMD Securities Litigation. Between September 8 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 10, 1993, five class actions were filed, purportedly on behalf of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers of the Corporation's stock, alleging that the Corporation and various \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its officers and directors violated Sections 10(b) and 20(a) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Exchange Act of 1934, 15 U.S.C. ((S))((S)) 78j(b) and 78t(a), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, and Rule 10b-5 promulgated thereunder, 17 C.F.R. ((S)) 240.10b-5, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by issuing allegedly false and misleading statements about the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development of its 486SX personal computer microprocessor products, and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent to which that development process included access to Intel's 386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microcode. Some or all of the complaints alleged that the Corporation's conduct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also constituted fraud, negligent misrepresentations and violations of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California Corporations Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The class actions have been settled and dismissed with prejudice. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cost of the settlements was $34 million, which was recorded in 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. George A. Bilunka, et al. v. Sanders, et al. (Case No. 93- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20727JW, N.D. Cal.) On September 30, 1993, an AMD shareholder, George A. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bilunka, purported to commence an action derivatively on the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf against all of the Corporation's directors and certain of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's officers. The Corporation was named as a nominal defendant. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purported derivative action essentially alleged that the individual defendants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breached their fiduciary duties to the Corporation by causing, or permitting, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation to make allegedly false and misleading statements (described in \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In re AMD Securities Litigation above) about the Corporation's development of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its 486SX personal computer microprocessor products, and the extent to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that development process included access to Intel's 386 microcode. This action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleged that a pre-suit demand on the Corporation's Board of Directors would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been futile because of alleged director involvement. Damages were sought \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the individual defendants in an unspecified amount. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By order of the Court, this case was consolidated for settlement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes with the securities class actions discussed above. The parties settled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this case for $2.25 million, payable to the Corporation by the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors and officers liability insurance carrier net of legal fees of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql derivative plaintiff's counsel and other miscellaneous costs. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The net payment to the Corporation will be approximately $1 million. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql derivative action has been dismissed with prejudice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. SEC Investigation. The Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("SEC") has notified the Corporation that it is conducting an informal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation of the Corporation regarding the Corporation's disclosures about \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the development of its Am486SX products. The investigation involves, among \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other things, the disclosures that were the subject of the securities class \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action and derivative suit described in Item 3, Numbers 3 and 4, above. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation is cooperating fully with the SEC's requests for information. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigation is, however, in a preliminary stage and no assurance can be given \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the SEC will not bring an action against the Corporation or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees. There can also be no assurance that any action taken by the SEC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising from its investigation will not have a significant adverse effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Other Matters. The Corporation is a defendant or plaintiff in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql various other actions which arose in the normal course of business. In the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion of management, the ultimate disposition of these matters will not have a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on the financial condition or results of operations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_4}{\*\bkmkend item_1_3_4}\pard\plain\cf1\f50\fs16\ql ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No matters were submitted to a vote of security holders during the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fourth quarter of the fiscal year covered by this report. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE OFFICERS OF THE REGISTRANT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Held \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Name Age Position Since \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql - - ---- --- -------- ----- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql W. J. Sanders III 58 Chairman of the Board and Chief Executive Officer. 1969 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Richard Previte 60 Director, President and Chief Operating Officer. 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Mr. Previte became Chief Operating Officer in 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql and President in 1990. Mr. Previte was Chief Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Officer and Treasurer from 1969 to 1989. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Marvin D. Burkett 52 Senior Vice President, Chief Administrative Officer, 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Chief Financial Officer and Treasurer. Mr. Burkett was \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Controller from 1972 until 1989. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Larry R. Carter* 51 Vice President and Corporate Controller. Mr. Carter was, 1992 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql from August 1989 until June 1992, Chief Financial Officer \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql of VLSI Technology, Inc. and prior to that he was Vice \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql President and Controller, MOS Group, at Motorola, Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Eugene D. Conner 51 Senior Vice President, Operations. Mr. Conner joined the 1987 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Corporation in 1969, and was elected an executive officer \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql in 1981. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Stanley Winvick 55 Senior Vice President, Human Resources. 1980 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Stephen J. Zelencik 60 Senior Vice President and Chief Marketing Executive. 1979 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Mr. Zelencik joined the Corporation in 1970. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Held \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Name Age Position Since \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql - - ---- --- -------- ----- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Thomas M. McCoy 44 Vice President, General Counsel and Secretary. Prior to 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql joining the Corporation, Mr. McCoy was with the law firm \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql of O'Melveny and Myers where he had been a partner \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql since 1985. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql ______________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Mr. Carter left the Corporation's employ following the end of the fiscal year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There is no family relationship between any executive officers of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_2}{\*\bkmkend part_1_2_2}\pard\plain\cf1\f50\fs16\ql PART II \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_5}{\*\bkmkend item_1_3_5}\pard\plain\cf1\f50\fs16\ql ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MATTERS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information regarding market price range, dividend information and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of holders of Common Stock of AMD appearing under the caption \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Supplemental Financial Data" on page 26 of the Corporation's 1994 Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report to Stockholders is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In February 1990, the Corporation adopted a shareholder rights plan. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with this plan, the Corporation paid a dividend of one preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock purchase right on each outstanding share of Common Stock pursuant to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights Agreement. Each right entitles the registered holder to purchase from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation one-thousandth of a share of Series A Junior Participating Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock, $0.10 par value, for a price of $65.00, subject to adjustment. The rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are redeemable by the Corporation and expire on December 31, 2000. At a meeting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on February 16, 1995, the Board of Directors authorized and directed a committee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its members to cause the Corporation to redeem the preferred stock purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights at a time to be determined by the committee, subject to the right of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee to request that the Board reconsider its action should a change in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances occur. No decision concerning the date of the planned redemption \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been announced by the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_6}{\*\bkmkend item_1_3_6}\pard\plain\cf1\f50\fs16\ql ITEM 6. SELECTED FINANCIAL DATA \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information regarding selected financial data for the fiscal years 1990 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through 1994 under the caption "Financial Summary" on page 27 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's 1994 Annual Report to Stockholders is incorporated herein by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_7}{\*\bkmkend item_1_3_7}\pard\plain\cf1\f50\fs16\ql ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL CONDITION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the caption "Management's Discussion and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Analysis of Results of Operations and Financial Condition" on pages 7 through \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 of the Corporation's 1994 Annual Report to Stockholders is incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_8}{\*\bkmkend item_1_3_8}\pard\plain\cf1\f50\fs16\ql ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's consolidated financial statements at December 26, 1993, and December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25, 1994 and for each of the three fiscal years in the period ended December 25, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994, and the report of independent auditors thereon, and the unaudited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarterly financial data of AMD for the two-year period ended December 25, 1994, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on pages 11 through 26 of the Corporation's 1994 Annual Report to Stockholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_9}{\*\bkmkend item_1_3_9}\pard\plain\cf1\f50\fs16\ql ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL DISCLOSURE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Not applicable. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page \par\pard\plain\fs16{\*\bkmkstart part_1_2_3}{\*\bkmkend part_1_2_3}\pard\plain\cf1\f50\fs16\ql PART III \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_10}{\*\bkmkend item_1_3_10}\pard\plain\cf1\f50\fs16\ql ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing at the end of Part I under the caption "Executive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officers of the Registrant" and under the captions "Proposal No. 1-Election of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors" and "Compliance with Section 16(a) of the Securities Exchange Act of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1934" in the Corporation's Proxy Statement to be mailed to Stockholders on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately March 31, 1995, is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_11}{\*\bkmkend item_1_3_11}\pard\plain\cf1\f50\fs16\ql ITEM 11. EXECUTIVE COMPENSATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information under the paragraphs entitled "Directors Fees and Expenses" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the caption "Committees and Meetings of the Board of Directors," and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information under the captions "Executive Compensation" (not including the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance graph), "Material Compensation Agreements," "Change in Control \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arrangements" and "Compensation Committee Interlocks and Insider Participation" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Corporation's Proxy Statement to be mailed to Stockholders on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately March 31, 1995, is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_12}{\*\bkmkend item_1_3_12}\pard\plain\cf1\f50\fs16\ql ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the captions "Principal Stockholders" and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Stock Ownership Table" in the Corporation's Proxy Statement to be mailed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stockholders on approximately March 31, 1995 is incorporated herein by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_13}{\*\bkmkend item_1_3_13}\pard\plain\cf1\f50\fs16\ql ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the caption "Transactions with Management" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Corporation's Proxy Statement to be mailed to Stockholders on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately March 31, 1995 is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page \par\pard\plain\fs16{\*\bkmkstart part_1_2_4}{\*\bkmkend part_1_2_4}\pard\plain\cf1\f50\fs16\ql PART IV \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_14}{\*\bkmkend item_1_3_14}\pard\plain\cf1\f50\fs16\ql ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. FINANCIAL STATEMENTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial statements listed in the accompanying Index to Consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Statements and Financial Statement Schedules Covered by Report of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Auditors are filed or incorporated by reference as part of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual report. The following is a list of such Financial Statements: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994 ANNUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM REPORT TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report of Ernst & Young LLP, Independent Auditors -- 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Income for each of the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years in the period ended December 25, 1994 -- 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Balance Sheets at December 26, 1993 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 25, 1994 -- 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Cash Flows for each of the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years in the period ended December 25, 1994 -- 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to consolidated financial statements -- 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supplementary financial data: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fiscal years 1993 and 1994 by quarter (unaudited) -- 26 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. FINANCIAL STATEMENT SCHEDULES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial statement schedules listed in the accompanying Index to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Financial Statements and Financial Statement Schedules Covered by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Reports of Independent Auditors are filed or incorporated by reference as part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this annual report. The following is a list of such Financial Statement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994 ANNUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM REPORT TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VIII Valuation and qualifying accounts F-3 -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All other schedules have been omitted since the required information is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present or is not present in amounts sufficient to require submission of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules, or because the information required is included in the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements or notes thereto. With the exception of the information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference into Parts I, II and IV of this Form 10-K, the 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report to Stockholders is not to be deemed filed as part of this report. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. EXHIBITS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The exhibits listed in the accompanying Index to Exhibits are filed or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference as part of this annual report. The following is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql list of such Exhibits: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Certificate of Designations for Convertible Exchangeable Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares, filed as Exhibit 3.2 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended March 27, 1987, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.3 Certificate of Designations for Series A Junior Participating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Stock, filed as Exhibit 3.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 31, 1989, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4 By-Laws, as amended, filed as Exhibit 4.5 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement on Form S-3 (Registration No. 33-57653), are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Shares, filed as Exhibit 4.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended March 29, 1987, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Indenture with respect to the 6% Convertible Subordinated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debentures due in 2012, filed as Exhibit 4.4 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report on Form 10-K for the fiscal year ended March 29, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 The Corporation hereby agrees to file on request of the Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a copy of all instruments not otherwise filed with respect to long- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term debt of the Corporation or any of its subsidiaries for which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total amount of securities authorized under such instruments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not exceed 10% of the total assets of the Corporation and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries on a consolidated basis. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Rights Agreement between the Corporation and Bank of America N.T. & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql S.A., filed as Exhibit 4.1 to the Corporation's Current Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 8-K dated February 7, 1990, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.1 AMD 1982 Stock Option Plan, as amended, filed as Exhibit 10.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.2 AMD 1986 Stock Option Plan, as amended, filed as Exhibit 10.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.3 AMD 1992 Stock Incentive Plan, as amended, filed as Exhibit 10.3 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.4 AMD 1980 Stock Appreciation Rights Plan, as amended, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.4 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.5 AMD 1986 Stock Appreciation Rights Plan, as amended, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.5 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.7 MMI 1981 Incentive Stock Option Plan, as amended, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.7 to the Corporation's Annual Report on Form 10-K for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 29, 1991, are hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.9 Form of Limited Stock Appreciation Rights Agreement, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 4.11 to the Corporation's Registration Statement on Form S- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 (No. 33-26266), is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.10 AMD 1987 Restricted Stock Award Plan, as amended, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.10 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.12 Resolution of Board of Directors on September 9, 1981, regarding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration of vesting of all outstanding stock options and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql associated limited stock appreciation rights held by officers under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain circumstances, filed as Exhibit 10.10 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report on Form 10-K for the fiscal year ended March 31, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1985, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(a) Employment Agreement dated July 1, 1991, between the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and W. J. Sanders III, filed as Exhibit 10.1 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 8-K dated September 3, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(b) Amendment dated August 27, 1991, to Employment Agreement between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation and W. J. Sanders III, filed as Exhibit 10.2 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Form 8-K dated September 3, 1991, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.14 Management Continuity Agreement between the Corporation and W. J. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sanders III, filed as Exhibit 10.14 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 29, 1991, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.15 Bonus Agreement between the Corporation and Richard Previte, filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Exhibit 10.15 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended December 29, 1991, is hereby incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.16 Executive Bonus Plan, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.17(a) Bonus Agreement between the Corporation and Anthony B. Holbrook, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.17 for the fiscal year ended December 27, 1992, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.17(b) Letter Agreement between the Corporation and Anthony B. Holbrook \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated August 24, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 30, 1986, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 1989, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.18 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 31, 1989, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.21 License Agreement with Western Electric Company, Incorporated, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.5 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended 1979, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.22 Intellectual Property Agreements with Intel Corporation, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.21 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fiscal year ended December 29, 1991, are hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.23 Award of Arbitrator in Case No. 626879 between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel Corporation, filed as Exhibit 28.2 on Form 8-K dated February \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24, 1992, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.24 Form of Indemnification Agreements with former officers of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Monolithic Memories, Inc., filed as Exhibit 10.22 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.25 Agreement and Plan of Reorganization between Monolithic Memories \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc., the Corporation and Advanced Micro Devices Merger \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, filed as Annex A to the Corporation's Amendment No. 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Registration Statement on Form S-4 (No. 33-15015), dated June \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25, 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(a) Joint Venture Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(a) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(b) Technology Cross-License Agreement between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited, filed as Exhibit 10.27(b) to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment No. 1 to its Annual Report on Form 10K/A for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(c) AMD Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(c) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(d) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(e) Joint Venture License Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(e) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(f) Joint Development Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(f) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28 Credit Agreement dated as of September 21, 1994, among the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, Bank of America National Trust and Savings Association \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Agent, The First National Bank of Boston as Co-Agent, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.1 to the Corporation's Quarterly Report on Form 10-Q for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the period ended September 25, 1994, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(a) Amended and Restated Guaranty dated as of December 17, 1993, by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation in favor of CIBC Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(b) First Amendment to Amended and Restated Guaranty, dated September \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21, 1994, by and between the Corporation and CIBC Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(c) Building Lease by and between CIBC Inc. and AMD International Sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql & Service, Ltd. dated as of September 22, 1992, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28(b) to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 27, 1992, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(d) First Amendment to Building Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.28(c) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(e) Second Amendment to Building Lease dated December 17, 1993, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(f) Land Lease by and between CIBC Inc. and AMD International Sales & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service, Ltd. dated as of September 22, 1992, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28(d) to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 27, 1992, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(g) First Amendment to Land Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.28(e) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(h) Second Amendment to Land Lease dated December 17, 1993, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.30 Executive Savings Plan, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.31 Form of Split Dollar Agreement, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.32 Form of Collateral Security Assignment Agreement, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.32 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 4.3 to the Corporation's Registration Statement on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form S-8 (No. 33-46577), is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.34 1992 United Kingdom Share Option Scheme, filed as Exhibit 4.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Registration on Form S-8 (No. 33-46577), is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.35 Compaq Computer Corporation/AMD, Inc. Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.36 Foundry Agreement between the Corporation and Digital Equipment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.37 Foundry Agreement between the Corporation and Taiwan Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Manufacturing Corporation, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.38 Form of Indemnification Agreements with current officers and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.39 Term Loan Agreement dated as of January 5, 1995, among the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, ABN AMRO Bank, N.V. as Administrative Agent, and ABN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMRO Bank N.V. and CIBC Inc., as Co-Arrangers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 Statement re computation of per share earnings. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Selected portions of 1994 Annual Report to Stockholders, which has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been incorporated by reference into Parts I, II and IV of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual report. To the extent filed, refer to the front page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinabove. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. List of AMD subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. Consent of Ernst & Young LLP, Independent Auditors, refer to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql page F-2 herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. Power of Attorney. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27.1 Financial Data Schedule \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 99.1 Findings of Fact and Conclusions of Law following "ICE" module of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trial dated October 7, 1994, in Intel v. AMD, Inc., Case No. C-93- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20301 PVT United States District Court, Northern District of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, San Jose Division, filed as Exhibit 99.1 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Quarterly Report in Form 10-Q, for the period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 25, 1994, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 99.2 Stipulated Preliminary Injunction dated October 31, 1994, in Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation v. AMD, Inc., Case No. C-93-20301 PVT United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql District Court, Northern District of California, San Jose Division, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 99.2 to the Corporation's Quarterly Report on Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-Q, for the period ended September 25, 1994, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation will furnish a copy of any exhibit on request and payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation's reasonable expenses of furnishing such exhibit. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Management contracts and compensatory plans or arrangements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be filed as an Exhibit to comply with Item 14(a)(3). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ** Confidential treatment has been granted as to certain portions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these Exhibits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *** Confidential treatment has been requested as to certain portions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these Exhibits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) REPORTS ON FORM 8-K. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. A current Report on Form 8-K dated December 30, 1994, was filed announcing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developments in the AMD/Intel Technology Agreement Arbitration, the settlement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the AMD/Intel Litigations, and the restatement of earnings. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. A current Report on Form 8-K dated February 10, 1995, was filed announcing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Convertible Exchangeable Preferred Stock of the Corporation was called \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for redemption. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \page \par\pard\plain\fs16{\*\bkmkstart part_1_2_5}{\*\bkmkend part_1_2_5}\pard\plain\cf1\f50\fs16\ql SIGNATURES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of Section 13 or 15(d) of the Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act of 1934, the registrant has duly caused this report to be signed on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its behalf by the undersigned, thereunto duly authorized. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrant \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 3, 1995 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:/s/ Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, Chief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Administrative Officer; Chief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Officer and Treasurer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of the Securities Exchange Act of 1934, this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql report has been signed below by the following persons, on behalf of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registrant and in the capacities and on the dates indicated. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE TITLE DATE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------- ------------------------------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/W. J. SANDERS III* Chairman of the Board and Chief March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (W. J. Sanders III) Executive Officer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Principal Executive Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ANTHONY B. HOLBROOK* Vice Chairman of the Board March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Anthony B. Holbrook) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/RICHARD PREVITE* Director, President and Chief March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Richard Previte) Operating Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/FRIEDRICH BAUR* Director March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Friedrich Baur) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/CHARLES M. BLALACK* Director March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Charles M. Blalack) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/R. GENE BROWN* Director March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (R. Gene Brown) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/JOE L. ROBY* Director March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Joe L. Roby) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/LEONARD SILVERMAN* Director March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Leonard Silverman) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/MARVIN D. BURKETT Senior Vice President, March 3, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Marvin D. Burkett) Chief Administrative Officer; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer (Principal Accounting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Financial Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * By:/s/MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Marvin D. Burkett, Attorney-in-Fact) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDEX TO CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FINANCIAL STATEMENT SCHEDULES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVERED BY REPORTS OF INDEPENDENT AUDITORS \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_6}{\*\bkmkend part_1_2_6}\pard\plain\cf1\f50\fs16\ql ITEM 14(a)(1) AND (2) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information under the following captions, which is included in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's 1994 Annual Report to Stockholders, a copy of which is attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto as Exhibit 13, is incorporated herein by reference: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANNUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM REPORT TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report of Ernst & Young LLP, Independent Auditors -- 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Income for each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the three fiscal years in the period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 25, 1994 -- 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Balance Sheets at December 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and December 25, 1994 -- 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Cash Flows for each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the three fiscal years in the period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 25, 1994 -- 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to consolidated financial statements -- 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supplementary financial data: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fiscal years 1993 and 1994 by quarter (unaudited) -- 26 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules for each of the three fiscal years in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period ended December 25, 1994: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VIII Valuation and qualifying accounts F-3 -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All other schedules have been omitted since the required information is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present or is not present in amounts sufficient to require submission of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules, or because the information required is included in the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements or notes thereto. With the exception of the information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference into Parts I, II and IV of this Form 10-K, the 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report to Stockholders is not to be deemed filed as part of this report. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F1 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We consent to the incorporation by reference in this Annual Report (Form 10-K) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Advanced Micro Devices, Inc. of our report dated January 5, 1995, except for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first paragraph of Note 14, as to which the date is January 11, 1995; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fourth paragraph of Note 5, as to which the date is February 10, 1995; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the fourth paragraph of Note 6, as to which the date is February 16, 1995, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in the 1994 Annual Report to Stockholders of Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Our audits also included the financial statement schedule of Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. listed in Item 14(a). This schedule is the responsibility of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's management. Our responsibility is to express an opinion based on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql our audits. In our opinion, the financial statement schedule referred to above, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when considered in relation to the basic financial statements taken as a whole, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presents fairly in all material respects the information set forth therein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We also consent to the incorporation by reference in the Registration Statement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on Form S-3 (No. 33-12011) pertaining to Depositary Convertible Exchangeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Shares, in the Registration Statement on Form S-4 (No. 33-15015) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertaining to shares issued in connection with the acquisition of Monolithic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memories, Inc. (MMI), in the Registration Statement on Form S-8 (No. 33-16060) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertaining to options granted under the MMI stock option plans, in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement on Form S-8 (No. 33-16095) pertaining to the 1987 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restricted Stock Award Plan of Advanced Micro Devices, Inc., in the Registration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement on Form S-8 (No. 33-39747) pertaining to the 1991 Stock Purchase Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Advanced Micro Devices, Inc., in the Registration Statements on Form S-8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Nos. 2-70376, 2-80148, 2-93392, 33-10319, 33-26266, 33-36596 and 33-46578) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertaining to the Stock Option and Stock Appreciation Rights Plans of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, in the Registration Statements on Form S-8 (Nos. 33-46577 and 33- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 55107) pertaining to the 1992 Stock Incentive Plan of Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc., in the Registration Statement on Form S-3 (No. 33-52943) pertaining to up \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to $400,000,000 in the aggregate of debt securities, preferred stock, depositary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares evidencing fractions of preferred shares, common stock and warrants to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase common stock and in the Registration Statement on Form S-3 (No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33-57653) pertaining to the call for redemption of its Convertible Exchangeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Stock and in the related prospectuses, of our report dated January 5, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1995, except for the first paragraph of Note 14, as to which the date is January \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11, 1995; the fourth paragraph of Note 5, as to which the date is February \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10, 1995; and the fourth paragraph of Note 6, as to which the date is February \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16, 1995, with respect to the consolidated financial statements incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein by reference, and our report included in the preceding paragraph with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the consolidated financial statement schedule included in this Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report (Form 10-K) of Advanced Micro Devices, Inc. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERNST & YOUNG LLP \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 6, 1995 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql San Jose, California \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql Schedule VIII \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VALUATION AND QUALIFYING ACCOUNTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Years Ended December 27, 1992, December 26, 1993 and December 25, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Thousands) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Additions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Charged \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance (Reductions Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Beginning Credited) End of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Period to Operations Deductions(1) Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ------------- ------------- ------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Allowance for doubtful accounts: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Years ended: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1992 $6,487 $ 986 $(794) $ 6,679 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993 6,679 1,540 (727) 7,492 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 25, 1994 7,492 3,723 (896) 10,319 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----------- \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql (1) Accounts (written off) recovered, net. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_7}{\*\bkmkend part_1_2_7}\pard\plain\cf1\f50\fs16\ql INDEX TO EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ITEM 14(a)(3)) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Certificate of Designations for Convertible Exchangeable Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares, filed as Exhibit 3.2 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended March 27, 1987, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.3 Certificate of Designations for Series A Junior Participating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Stock, filed as Exhibit 3.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 31, 1989, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4 By-Laws, as amended, filed as Exhibit 4.5 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement on Form S-3 (Registration No. 33-57653), are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preferred Shares, filed as Exhibit 4.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended March 29, 1987, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Indenture with respect to the 6% Convertible Subordinated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Debentures due in 2012, filed as Exhibit 4.4 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report on Form 10-K for the fiscal year ended March 29, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 The Corporation hereby agrees to file on request of the Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a copy of all instruments not otherwise filed with respect to long- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term debt of the Corporation or any of its subsidiaries for which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total amount of securities authorized under such instruments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not exceed 10% of the total assets of the Corporation and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries on a consolidated basis. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Rights Agreement between the Corporation and Bank of America N.T. & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql S.A., filed as Exhibit 4.1 to the Corporation's Current Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 8-K dated February 7, 1990, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.1 AMD 1982 Stock Option Plan, as amended , filed as Exhibit 10.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.2 AMD 1986 Stock Option Plan, as amended , filed as Exhibit 10.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 30 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.3 AMD 1992 Stock Incentive Plan, as amended , filed as Exhibit 10.3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.4 AMD 1980 Stock Appreciation Rights Plan, as amended , filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.4 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.5 AMD 1986 Stock Appreciation Rights Plan , filed as Exhibit 10.5 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.7 MMI 1981 Incentive Stock Option Plan, as amended , filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.7 to the Corporation's Annual Report on Form 10-K for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 29, 1991, are hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.9 Form of Limited Stock Appreciation Rights Agreement, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 4.11 to the Corporation's Registration Statement on Form S- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 (No. 33-26266), is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.10 AMD 1987 Restricted Stock Award Plan, as amended , filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.10 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 26, 1993, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.12 Resolution of Board of Directors on September 9, 1981, regarding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration of vesting of all outstanding stock options and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql associated limited stock appreciation rights held by officers under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain circumstances, filed as Exhibit 10.10 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report on Form 10-K for the fiscal year ended March 31, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1985, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(a) Employment Agreement dated July 1, 1991, between the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and W. J. Sanders III, filed as Exhibit 10.1 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 8-K dated September 3, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(b) Amendment dated August 27, 1991, to Employment Agreement between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation and W. J. Sanders III, filed as Exhibit 10.2 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Form 8-K dated September 3, 1991, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 31 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.14 Management Continuity Agreement between the Corporation and W. J. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sanders III, filed as Exhibit 10.14 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 29, 1991, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference . \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.15 Bonus Agreement between the Corporation and Richard Previte, filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Exhibit 10.15 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended December 29, 1991, is hereby incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.16 Executive Bonus Plan, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.17(a) Bonus Agreement between the Corporation and Anthony B. Holbrook, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.17 for the fiscal year ended December 27, 1992, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.17(b) Letter Agreement between the Corporation and Anthony B. Holbrook \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated August 24, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 30, 1986, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 1989, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.18 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 31, 1989, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.21 License Agreement with Western Electric Company, Incorporated, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.5 to the Corporation's Annual Report on Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K for fiscal the year ended 1979, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.22 Intellectual Property Agreements with Intel Corporation, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.21 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fiscal year ended December 29, 1991, are hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.23 Award of Arbitrator in Case No. 626879 between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel Corporation, filed as Exhibit 28.2 on Form 8-K dated February \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24, 1992, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.24 Form of Indemnification Agreements with former officers of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Monolithic Memories, Inc., filed as Exhibit 10.22 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.25 Agreement and Plan of Reorganization between Monolithic Memories \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc., the Corporation and Advanced Micro Devices Merger \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, filed as Annex A to the Corporation's Amendment No. 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Registration Statement on Form S-4 (No. 33-15015), dated June \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 32 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(a) Joint Venture Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(a) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(b) Technology Cross-License Agreement between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited, filed as Exhibit 10.27(b) to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment No. 1 to its Annual Report on Form 10K/A for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(c) AMD Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(c) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(d) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(e) Joint Venture License Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(e) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(f) Joint Development Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited, filed as Exhibit 10.27(f) to the Corporation's Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 1 to its Annual Report on Form 10K/A for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28 Credit Agreement dated as of September 21, 1994, among the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, Bank of America National Trust and Savings Association \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Agent, The First National Bank of Boston as Co-Agent, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.1 to the Corporation's Quarterly Report on Form 10-Q for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the period ended September 25, 1994, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(a) Amended and Restated Guaranty dated as of December 17, 1993, by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, in favor of CIBC Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(b) First Amendment to Amended and Restated Guaranty, dated September \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21, 1994, by and between the Corporation and CIBC Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(c) Building Lease by and between CIBC Inc. and AMD International Sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql & Service, Ltd. dated as of September 22, 1992, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28(b) to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 27, 1992, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 33 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(d) First Amendment to Building Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.28(c) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(e) Second Amendment to Building Lease dated December 17, 1993, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and between CIBC Inc. and AMD International Sales & Service, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(f) Land Lease by and between CIBC Inc. and AMD International Sales & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service, Ltd. dated as of September 22, 1992, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28(d) to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended December 27, 1992, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(g) First Amendment to Land Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 10.28(e) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(h) Second Amendment to Land Lease dated December 17, 1993, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between CIBC Inc. and AMD International Sales & Service, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.30 Executive Savings Plan, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.31 Form of Split Dollar Agreement, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.32 Form of Collateral Security Assignment Agreement, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.32 to the Corporation's Annual Report on Form 10K for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 26, 1993, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 4.3 to the Corporation's Registration Statement on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form S-8 (No. 33-46577), is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.34 1992 United Kingdom Share Option Scheme, Filed as Exhibit 4.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Registration on Form S-8 (No. 33-46577), is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.35 Compaq Computer Corporation/AMD, Inc. Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.36 Foundry Agreement between the Corporation and Digital Equipment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ***10.37 Foundry Agreement between the Corporation and Taiwan Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Manufacturing Corporation, Ltd. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.38 Form of Indemnification Agreements with current officers and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.39 Term Loan Agreement dated as of January 5, 1995, among the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, ABN AMRO Bank N.V. as Administrative Agent, and ABN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMRO Bank N.V. and CIBC, Inc. as Co-Arrangers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Statement re computation of per share earnings. \par\pard\plain\fs16 \par\pard\plain\fs16\par\pard\plain\cf1\f50\fs16\ql 34 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Number Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Selected portions of 1994 Annual Report to Stockholders which has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been incorporated by reference into Parts I, II and IV of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual report. To the extent filed, refer to the front page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinabove. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. List of AMD subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. Consent of Ernst & Young LLP, Independent Auditors, refer to page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-2 hereinabove. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. Power of Attorney. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27.1 Financial Data Schedule \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 99.1 Findings of Fact and Conclusions of Law following "ICE" module of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trial dated October 7, 1994, in Intel v. AMD, Inc., Case No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C-93-20301 PVT United States District Court, Northern District of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, San Jose Division, filed as Exhibit 99.1 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Quarterly Report in Form 10-Q, for the period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 25, 1994, is hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 99.2 Stipulated Preliminary Injunction dated October 31, 1994, in Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation v. AMD, Inc., Case No. C-93-20301 PVT United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql District Court, Northern District of California, San Jose Division, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 99.2 to the Corporation's Quarterly Report on Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-Q, for the period ended September 25, 1994, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation will furnish a copy of any exhibit on request and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the Corporation's reasonable expenses of furnishing such exhibit. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Management contracts and compensatory plans or arrangements required to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as an Exhibit to comply with Item 14(a)(3). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ** Confidential treatment has been granted as to certain portions of these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *** Confidential treatment has been requested as to certain portions of these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 35 \par\pard\plain\fs16 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_2}{\*\bkmkend doc_1_2} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE BONUS PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Personal and Confidential \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. Purpose___________________________________________ 3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II. Overview__________________________________________ 3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql III. Short-Term Performance Plan (STPP)________________ 4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IV. Long-Term Performance Plan (LTPP)_________________ 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql V. Timing of Payouts_________________________________ 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VI. EBP Administration________________________________ 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VII. Financial Terms Explained_________________________ 9 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 2 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. PURPOSE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Executive Bonus Program (EBP) provides an incentive for AMD's Vice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Presidents and the Officer Staff to maximize short- and long-term financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and sales performance. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II. OVERVIEW \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The EBP has two separate elements: the Short-Term Performance Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (STPP) which provides an annual incentive, and the Long-Term Performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan (LTPP) which rewards sustained Corporate performance over a three- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The STPP motivates participants to exceed Corporate Operating Income and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selected Division objectives. Executives are assigned to different tiers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the STPP (with varying award targets and maximums) depending upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their roles. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The LTPP measures AMD's 3-year performance on Return on Equity (ROE) and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sales growth relative to the external marketplace. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Expressed as percents of base salary, target and maximum awards for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EBP are as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PLAN ELEMENT TARGET AWARD MAXIMUM AWARD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERFORMANCE MEASURE (% OF BASE) (% OF BASE) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STPP Corporate Operating Income, 40% - 50% 80% -100% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Division Measures (may vary) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LTPP 3 Year Relative ROE & 30% 60% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sales Growth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================================== \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total EBP 70% - 80% 140% - 160% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Calculations of STPP bonuses use the participant's annualized base \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql salary as of December 31 of the plan year. For LTPP bonuses, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant's annualized base salary as of December 31 of Plan Year 3 is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used. The base salary amount is modified subject to the proration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions as described in section VI., EBP Administration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 3 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The EBP is funded by a maximum of 3 percent of AMD's reported Operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql III. SHORT TERM PERFORMANCE PLAN (STPP) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The STPP bonus is earned by achieving specific levels of Corporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance against reported Operating Income. In addition, a portion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the STPP is based on the achievement of Division performance objectives as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established by the Office of the CEO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STPP awards vary depending on actual performance against planned Operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income and Division objectives. Target awards are earned when planned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql objectives are achieved. If Operating Income and Division performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql objectives are exceeded, then awards up to the maximum may be earned. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Conversely, in poor performance years, STPP payouts will be greatly reduced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or eliminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STPP PLAN PARAMETERS: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The Corporate portion makes up a minimum of 80% of the STPP payout, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql while the Division portion comprises no more than 20% of the STPP \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payout. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o For any payout to occur on the Corporate portion of the STPP, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current year's actual Operating Income must be greater than 25% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior year's reported Operating Income (the "threshold"), and in no case \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be less than $0. The Office of the CEO retains discretion on payouts of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Division performance portion of the STPP. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 4 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. STPP CORPORATE PERFORMANCE CALCULATION: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First a target multiplier (ranging from 0 to 2) is calculated based on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actual Operating Income against planned Operating Income. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Then the actual STPP bonus amount for the Corporate portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan is calculated as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Target Multiplier x Target % x Base Salary = STPP Corporate Bonus Award \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Awards for the Corporate portion of the STPP are earned as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o When actual Operating Income is equal to planned Operating Income, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the target award is generated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o When actual Operating Income is 125% or more than planned Operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income, the maximum award is generated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o When actual Operating Income is less than the threshold (or $0), no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonus is generated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The annual STPP threshold, Operating Income goal, and target multiplier \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formulas are generated and communicated to the participants each year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. STPP DIVISION PERFORMANCE CALCULATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Division performance objectives are determined annually by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate member of the Office of the CEO. The target and maximum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payout amounts for the Division performance portion will not exceed 20% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the total STPP bonus. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Specifics of the Division portion are communicated to participants each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year, along with the objectives for the Corporate portion of the STPP. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 5 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IV. LONG-TERM PERFORMANCE PLAN (LTPP) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The LTPP has a target bonus of 30% of base salary and a maximum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opportunity of 60% for all participants. It is based on sustained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate performance on both financial and sales growth measures relative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to AMD's competitive marketplace over a rolling three-year period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The actual LTPP bonus as a percent of salary is the product of two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql multipliers (the Financial Performance Multiplier and the Sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Performance Multiplier) times the 30% target payout. The multipliers are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql derived from a Financial Performance Delta and a Sales Performance Delta, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both representing comparisons against the external marketplace. Their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql derivations are described as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Financial Performance Delta is the difference between AMD's Return \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on Equity, ROE (AMD), over a three-year period and the three-year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql average Return on Equity for the Standard and Poor's 500, ROE (S&P), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the same period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Financial Performance Delta is calculated as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3-Year ROE (AMD) - 3-Year ROE (S&P) = Financial Performance Delta \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Three-year ROE (AMD) is calculated by dividing AMD's total Net Income \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (N.I.) earned over the three-year period (Year 1 through Year 3) by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sum of AMD's average annual Shareholders' Equity (S.E.) over the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period. Average annual S.E. is the simple average of the year-beginning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and year-ending S.E. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Three-year ROE (S&P) is calculated by averaging ROE reported for the S&P \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 500 for the period (Year 1 through Year 3): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3-Year ROE (S&P) = ROE Year 1 + ROE Year 2 + ROE Year 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 6 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Financial Performance Multiplier is derived from the equations shown \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Equations \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql If: delta is less than -6.0 Then multiplier = 0 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -6.0 is less than delta and less than or equal to 6.0 = 0.1667 x delta + 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql delta is greater than 6.0 = 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Sales Performance Delta is the difference between AMD's three-year sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql growth and the three-year semiconductor industry sales growth, as published \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Worldwide Semiconductor Trade Statistics (WSTS). Three-year Sales Growth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for both AMD and the semiconductor industry is determined as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3-Year Sales Growth = Year 3 Sales - Year 0 Sales x 100 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Year 0 Sales \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The percentage point difference (Sales Performance Delta) between AMD Sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Growth and WSTS Sales Growth is then computed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql When the Delta is known, the Sales Performance Multiplier is then \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined using the following equations. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql Equations \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql If: delta is less than or equal to -30.0 Then multiplier = 0 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql -30.0 is less than delta and less than or equal to 0.0 = 0.0333 x delta + 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql 0.0 is less than delta and less than or equal to 20.0 = 0.05 x delta + 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs12\ql delta is greater than 20.0 = 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The Total LTPP Bonus as a percent of salary is calculated as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Performance Multiplier x Sales Performance Multiplier \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql x Target Percent = LTPP Bonus as a Percent of Salary \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 7 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql V. TIMING OF PAYOUTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All awards earned under the STPP and LTPP are paid out by the end of Q1, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the close of the fiscal year. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VI. EBP ADMINISTRATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o For the STPP, individuals who participate for less than the full plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year (fiscal year) have their awards prorated to reflect their actual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participation period. For the LTPP, executives with less than one year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of participation are ineligible to receive an award. During subsequent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years, LTPP awards are prorated based on the actual number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal months in the plan relative to 36 months of participation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the provision below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Participants must be full-time, active employees at the time of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonus distribution to qualify for a bonus award. In case of retirement, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql death, or disability, award amounts are prorated for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only if participants were on active employment status for less than six \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months. If participants were on active status for six months or more, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they receive the payout for the whole year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The EBP is funded by no more than 3 percent of reported Operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income. If the calculated EBP payouts exceed that figure, awards are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjusted downward to stay within this funding limit. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o There is no vested entitlement to any bonuses as described above. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment of any bonuses are made at the sole discretion of the Office of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the CEO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o AMD reserves the right to modify or terminate the plan or participation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any individual at its sole discretion. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 8 - \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD EXECUTIVE BONUS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ================================================================================ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VII. FINANCIAL TERMS EXPLAINED \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Reported Operating Income is total Operating Income as reported on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql external financial statements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Return on Equity (ROE) is calculated by dividing Net Income for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period by average Shareholders' Equity (i.e., the average of the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year's beginning and ending Shareholders' Equity). For the purposes of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the LTPP, ROE for AMD will be calculated over a three-year period as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Section IV. A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Net Income" is income after all expenses, including those not shown on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the internal (product line) P&L. Expenses shown on the P&L are operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses (the costs of operating the business), interest expenses (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql costs of financing the business), and income taxes. Besides these P&L \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses, profit sharing, bonus accruals, and foreign exchange gain/loss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses are included in the calculation of Net Income. Thus, reported \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Net Income is income that is available to shareholders, which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company can pay out in dividends or reinvest on their behalf. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql denominator, Shareholder Equity, is the book value of the shareholders' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment in the company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o The Standard and Poor's 500 (S&P 500) is a composite of 500 companies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql chosen by Standard and Poor's Corporation because they tend to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql leaders in important industries within the U.S. economy. It consists of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 400 industrial, 40 financial, 40 public utilities, and 20 transportation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql companies. In addition to being used to measure AMD's Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance for the LTPP, the S&P 500 is the comparator group used in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql analyzing AMD's performance in the annual report and proxy statement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql o Worldwide Semiconductor Trade Statistics (WSTS), Inc. collects, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidates and publishes data (such as shipments and bookings) on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monthly basis from the vast majority of semiconductor companies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql worldwide. WSTS data are widely accepted benchmarks for performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql throughout the industry. The data used for EBP purposes are worldwide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor sales figures. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - 9 - \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_3}{\*\bkmkend doc_1_3} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.17(b) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 24, 1994 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mr. Anthony B. Holbrook \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41 Hollins Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Santa Cruz, California 95060 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dear Tony: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Although we regret your decision to resign as an executive officer of AMD, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql we are very pleased that you will be available to continue to work with AMD on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part-time basis. The following will formalize the arrangements you have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed in your letter to Jerry, and issues we discussed in our recent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conversation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1) You will remain a full-time AMD employee through August 26, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2) From August 27, 1994 through July 31, 1995, you will be a regular, part- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time employee of AMD, during which you will devote up to 35 hours per month \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the activities described in this agreement. In the second quarter of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1995, we will discuss extension of this agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3) During the period from August 27, 1994 through July 31, 1995, you will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oversee the K-series program by formally reviewing development status every \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 45 to 60 days and informally monitoring events more frequently. At the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request of individual members of senior management, you will advise on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters such as product and market development strategies, technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plans, business plans, and new business ventures. You will be available to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attend meetings such as division strategy reviews, PDPs, and TDPs as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4) While you remain as a part-time employee under this agreement, you will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensated at a bi-weekly rate of $5,592, beginning August 27, 1994. All \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business expenses will be reimbursed as usual, and all applicable federal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and state taxes will be deducted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5) AMD will provide an office and secretarial support. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6) Certain benefits, including medical, dental and life insurance benefits, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will end on August 31, 1994. Under COBRA, you will be entitled to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continued medical and dental coverage at your sole expense. Benefits under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Executive long-term disability plan, the Executive Savings plan, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stock purchase plan end on your last day of full-time employment, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 26, 1994. As a regular, part-time employee, you will continue to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vest in any unvested stock options, and will be eligible for Cash Profit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sharing, Deferred Profit Sharing, and the 401(k) Plan. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mr. Anthony B. Holbrook \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 24, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Page 2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7) You will be eligible to receive payment of your 1994 Chief Technical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer bonus at the time it is regularly paid. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8) You will be entitled to retain the use of an AMD vehicle under the terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and conditions of AMD Car Plan A from August 27, 1994 through July 31, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1995, subject to the following conditions: (i) all fuel costs will be paid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by you; and (ii) you will be reimbursed up to a total of $2,000 for routine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintenance and normal repair during this period upon presentation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate documentation. If a maintenance or repair problem in excess of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $2,000 arises, you will advise AMD and seek prior approval for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reimbursement from the Chief Financial Officer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9) All of the company's policies and programs, including policies concerning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trading in AMD stock and the protection and ownership of intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property, will continue to apply to you, and where applicable will extend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beyond termination of employment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the above meets with your approval, please sign the enclosed copy and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return it to me. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sincerely, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Stanley Winvick \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stanley Winvick \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, Human Resources \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accepted and Agreed: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Anthony B. Holbrook \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Anthony B. Holbrook \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cc: Jerry Sanders \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SW:JWS/kar \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_4}{\*\bkmkend doc_1_4} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.29(a) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMENDED AND RESTATED GUARANTY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of December 17, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in favor of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIBC INC. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.1 Certain Terms . . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.2 Accounting and Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Determinations . . . . . . . . . . . . . 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.3 Definitions in the Leases . . . . . . . 9 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTY PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.1 Guaranty . . . . . . . . . . . . . . . . 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.2 Acceleration of Guaranty . . . . . . . 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.3 Guaranty Absolute, etc. . . . . . . . . 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.4 Reinstatement, etc. . . . . . . . . . . 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.5 Waiver, etc. . . . . . . . . . . . . . 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.6 Subrogation . . . . . . . . . . . . . . 14 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND WARRANTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1 Representations and Warranties . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.1 Organization, etc. . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.2 Due Authorization, Non-Contravention, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql etc. . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.3 Government Approval, Regulation, etc. . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.4 Validity, etc. . . . . . . . . . . . . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.5 Financial Information . . . . . . . . . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.6 No Material Adverse Change . . . . . . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.7 Litigation, Labor Controversies, etc. . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.8 Subsidiary . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.9 Ownership of Properties . . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.10 Taxes . . . . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.11 Pension and Welfare Plans . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.12 Environmental Warranties . . . . . . . . 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.13 Regulations G, U and X . . . . . . . . . 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.14 No Default . . . . . . . . . . . . . . . 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.15 Representations and Warranties in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases.\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql . . . . . . . . . . . . . . . . . 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.16 Accuracy of Information . . . . . . . . . 20 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVENANTS, ETC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1 Affirmative Covenants . . . . . . . . . . 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.1 Financial Information, Reports, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notices, etc. . . . . . . . . . . . . . . 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.2 Compliance with Laws, etc. . . . . . . . 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.3 Maintenance of Properties . . . . . . . . 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.4 Insurance . . . . . . . . . . . . . . . . 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.5 Books and Records . . . . . . . . . . . . 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.6 Environmental Covenant . . . . . . . . . 24 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.7 Maintenance of Authorizations, etc. . . . 24 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.8 Performance of Obligations . . . . . . . 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.9 Further Assurances . . . . . . . . . . . 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2 Negative Covenants . . . . . . . . . . . 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.1 Indebtedness . . . . . . . . . . . . . . 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.2 Liens . . . . . . . . . . . . . . . . . . 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.3 Financial Condition . . . . . . . . . . . 27 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.4 Restricted Payments, etc. . . . . . . . . 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.5 Rental Obligations . . . . . . . . . . . 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.6 Consolidation, Merger, etc. . . . . . . . 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.7 Asset Dispositions, etc. . . . . . . . . 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.8 Bankruptcy Proceedings . . . . . . . . . 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.9 Transactions with Affiliates . . . . . . 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.10 Negative Pledges, Restrictive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements, etc. . . . . . . . . . . . . 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.11 Fees . . . . . . . . . . . . . . . . . . 30 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COLLATERAL ACCOUNT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.1 Deposit Events . . . . . . . . . . . . . 30 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.2 Deposit and Applications . . . . . . . . 31 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.1 Successors, Transferees and Assigns; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transfers of Notes, etc. . . . . . . . . 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.2 Amendments, etc. . . . . . . . . . . . . 32 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.3 Notices . . . . . . . . . . . . . . . . . 32 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.4 No Waiver; Remedies . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.5 Captions . . . . . . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.6 Severability . . . . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.7 Governing Law . . . . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.8 Forum Selection and Consent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Jurisdiction . . . . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.9 Waiver of Jury Trial . . . . . . . . . . 34 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ii \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE I - Real Property Description \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE II - Environmental Matters \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE III - Disclosure Information \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql iii \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMENDED AND RESTATED GUARANTY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS AMENDED AND RESTATED GUARANTY, dated as of December 17, 1993 (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time amended, supplemented, amended and restated or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modified, this "Guaranty"), made by ADVANCED MICRO DEVICES, INC., a Delaware \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation (the "Guarantor"), in favor of CIBC INC., a Delaware corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Lessor"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql W I T N E S S E T H: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - - - - - - - - - \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, pursuant to a Land Lease dated as of September 22, 1992, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended by that certain First Amendment to Land Lease dated December 22, 1992 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Original Land Lease") between AMD International Sales & Service, Ltd., a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation (the "Lessee") and Lessor, Lessor leased to Lessee the land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Land") described at Schedule I hereto; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, pursuant to a Building Lease, dated as of September 22, 1992, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as amended by that certain First Amendment to Building Lease dated December 22, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 (the "Original Building Lease"), between Lessee and Lessor, Lessor leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Lessee the building and improvements located on the Land, all as more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically described in the Original Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, pursuant to a Construction Consent Agreement between Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Lessee dated December 22, 1992 Lessor consented to Lessee making certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations (as defined below) to the Property; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, as a condition precedent to Lessor entering into the Original \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land Lease and the Original Building Lease, the Guarantor executed and delivered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Guaranty dated as of September 22, 1992, which Guaranty was amended and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restated by that certain Amended and Restated Guaranty dated as of January 4, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 (collectively, the "Original Guaranty"; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, Lessor and Lessee are entering into a Second Amendment to Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease dated as of the date hereof (the "Land Lease Amendment") which will amend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Original Land Lease to incorporate certain changes and modifications which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been agreed to by the parties; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, Lessor and Lessee also are entering into a Second Amendment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease dated as of the date hereof (the "Building Lease Amendment") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which will amend the Original Building Lease to (i) provide that Lessor will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund certain of the Renovations, and (ii) make certain other changes and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modifications which have been agreed to by the parties; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, Guarantor has acknowledged that the changes, modifications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additions and fundings reflected in the Land Lease \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment and Building Lease Amendment will substantially benefit both Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Guarantor; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, as a condition to Lessor entering into the Land Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment and the Building Lease Amendment, Guarantor is required to deliver \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Guaranty; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, Guarantor has duly authorized the execution, delivery and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of this Guaranty; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW THEREFORE, for good and valuable consideration the receipt of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby acknowledged, and in order to induce Lessor, Guarantor agrees, for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of Lessor, as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE ORIGINAL GUARANTY IS HEREBY AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOLLOWS: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.1 Certain Terms. The following terms (whether or not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underscored) when used in this Guaranty, including its preamble and recitals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the following meanings (such definitions to be equally applicable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the singular and plural forms thereof): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Aggregate Balance Due" means the aggregate of the Balance Due (as that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term is defined in the Amended Building Lease) under the Amended Building Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Balance Due (as that term is defined in the Amended Land Lease) under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Amended Land Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Amended Building Lease" means the Original Building Lease, as amended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Building Lease Amendment, together with all other amendments, supplements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and restatements and other modifications, if any, from time to time made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Amended Land Lease" means the Original Land Lease, as amended by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land Lease Amendment, together with all other amendments, supplements and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restatements and other modifications, if any, from time to time made hereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Bank of America Credit Agreement" means that certain Credit Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of January 4, 1993, among Guarantor, Bank of America National Trust & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Savings Association, as Agent, First National Bank of Boston, as Co-Agent, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Banks named therein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Building Lease Amendment" is defined in the recitals. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ -------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Capitalized Lease Liabilities" means all monetary obligations under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any leasing or similar arrangement which, in accordance with GAAP, would be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classified as capitalized leases, and, for purposes of this Guaranty, the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such obligations shall be the capitalized amount thereof, determined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with GAAP, and the stated maturity thereof shall be the date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql last payment of rent or any other amount due under such lease prior to the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date upon which such lease may be terminated by the lessee without payment of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql penalty. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Cash Equivalent Investment" means any evidence of Indebtedness, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maturing not more than one year after such time, issued or guaranteed by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States Government; commercial paper, maturing not more than nine months \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date of issue, which is issued by a corporation (other than Lessor) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organized under the laws of any state of the United States or the District of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Columbia and rated at least A-1 by Standard & Poor's Corporation or P-1 by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Moody's Investors Service, Inc. or any certificate of deposit or banker's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptance maturing not more than one year after such time, which is issued by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial banking institution that is a member of the Federal Reserve System \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and has a combined capital and surplus and undivided profits of not less \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $500,000,000. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CERCLA" means the Comprehensive Environmental Response, Compensation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Liability Act of 1980, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "CERCLIS" means the Comprehensive Environmental Response Compensation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liability Information List. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Collateral Account" is defined in Section 5.2. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Consent Agreement" means the Construction Consent Agreement dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December 22, 1992 entered into by and between Lessor and Lessee and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also include the Security Agreement and Assignment and the Consents and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acknowledgments entered into in connection with the Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Contingent Liabilities" means any agreement, undertaking or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement by which any Person guarantees, endorses or otherwise becomes or is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contingently liable upon (by direct or indirect agreement, contingent or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, to provide funds for payment, to supply funds to, or otherwise to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invest in, a debtor, or otherwise to assure a creditor against loss) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indebtedness, obligation or any other liability of any other Person (other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by endorsements of instruments in the course of collection), or guarantees the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of dividends or other distributions upon the shares of any other Person. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amount of any Person's obligation under any Contingent Liability shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (subject to any limitation set forth therein) be deemed to be the outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal amount (or maximum principal amount, if larger) of the debt, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation or other liability guaranteed thereby. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Controlled Group" means all members of a controlled group of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporations and all members of a controlled group of trades or businesses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whether or not incorporated) under common control which, together with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any of its Subsidiaries, are treated as a single employer under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 414(b) or 414(c) of the Code or Section 4001 of ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Debt" means the consolidated Indebtedness of Guarantor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Debt to Tangible Net Worth Ratio" means the ratio of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Debt \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Tangible Net Worth. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Default" means any Event of Default or any condition, occurrence or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event which, after notice or lapse of time, or both, would constitute an Event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Deposit Event" is defined in Section 5.1. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Earnings before Interest, Taxes and Operating Lease Payments" means, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Guarantor and its Subsidiaries, on a consolidated basis, Net Income \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (exclusive of all amounts in respect of any extraordinary gains or losses) plus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest expense of Guarantor and its Subsidiaries, including the portion of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capitalized Lease Liabilities allocable to interest expense; plus all federal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql state, local and foreign income taxes of Guarantor and its Subsidiaries; plus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Operating Lease Payments. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Environmental Indemnity Agreement" means the Restated Hazardous \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Materials Undertaking and Unsecured Indemnity dated as of the date hereof, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed and delivered by an Authorized Officer of Lessee and Guarantor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Environmental Laws" means all applicable federal, state or local \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutes, laws, ordinances, codes, rules, regulations and guidelines (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent decrees and administrative orders) relating to public health and safety \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and protection of the environment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "ERISA" means the Employee Retirement Income Security Act of 1974, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, and any successor statute of similar import, together with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations thereunder, in each case as in effect from time to time. References \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to sections of ERISA also refer to any successor sections. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fiscal Quarter" means any quarter of a Fiscal Year. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fiscal Year" means any period of twelve consecutive calendar months \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ending on the last Sunday of the calendar year; references to a Fiscal Year with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a number corresponding to any calendar year (e.g., the "1993 Fiscal Year") refer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Fiscal Year ending on the last Sunday occurring during such calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fixed Charge Coverage Ratio" means, at any date of calculation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, the ratio of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Earnings before Interest, Taxes and Operating Lease Payments for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the immediately preceding four Fiscal Quarters (or, if shorter, the period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date hereof through such date of calculation) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Fixed Charges of Guarantor and its Subsidiaries on a consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis for such period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fixed Charges" means, relative to any Person for any period, the sum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) cash interest payable on all Indebtedness of such Person during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such period; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Operating Lease Payments; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) principal amounts payable during such period of all Indebtedness \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Person resulting from the borrowing of money or the granting of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit (other than (i) normal accounts payable representing deferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment obligations for goods and services provided in the ordinary course \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of business on normal trade terms and (ii) Indebtedness repaid with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds from additional Indebtedness permitted pursuant to Section 4.2.1). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "F.R.S. Board" means the Board of Governors of the Federal Reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System or any successor thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "GAAP" is defined in Section 1.2. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Governmental Approvals" means all the authorizations, consents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approvals, licenses, leases, rulings, permits (including the Permits), tariffs, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rates, certifications, exemptions, filings or registrations by or with any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authority or pursuant to any Governmental Requirement relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and any of its Subsidiaries, any of the respective properties, this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty and the Leases. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Governmental Authority" means the government of any federal, state, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql municipal or other political subdivision (including courts, arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tribunals and administrative agencies and all other agencies and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrumentalities of such governments and political subdivisions) exercising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction over Guarantor or any of its Subsidiaries or any of their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Governmental Requirements" means all laws, ordinances, statutes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql codes, rules, regulations, treaties, rulings, decisions, policies, guidelines, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orders and decrees of any Governmental Authority. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Guarantor" is defined in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Guaranty" is defined in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Hazardous Materials" means \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) any "hazardous substance", as defined by CERCLA or by Sections \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25281(d) or 25316 of the California Health and Safety Code, as amended, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reformed or otherwise modified from time to time; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any "hazardous waste", as defined by the Resource Conservation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Recovery Act, as amended; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) any "hazardous waste", "infectious waste" or "hazardous \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material" as defined in Sections 25117, 25117.5 or 25501(j) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California Health and Safety Code, as amended, reformed or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modified from time to time; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) any petroleum product; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) any pollutant or contaminant or hazardous, dangerous or toxic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql chemical, material or substance within the meaning of any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Requirement (including consent decrees and administrative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orders) relating to or imposing liability or standards of conduct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning any hazardous, toxic or dangerous waste, substance or material, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all as amended or hereafter amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Impermissible Qualification" means relative to the opinion or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certification of any independent public accountant as to any financial statement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Guarantor or Lessee, any qualification or exception to such opinion or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certification \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) which is of a "going concern" or similar nature; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) which relates to the limited scope of examination of matters \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relevant to such financial statement; or \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) which relates to the treatment or classification of any item \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such financial statement and which, as a condition to its removal, would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require an adjustment to such item the effect of which would be to cause a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql default to occur under Section 4.2.4. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Indebtedness" of any Person means, without duplication: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) all obligations of such Person for borrowed money and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of such Person evidenced by bonds, debentures, notes or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar instruments; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) all obligations, contingent or otherwise, relative to the face \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of all letters of credit, whether or not drawn, and banker's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptances issued for the account of such Person; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) all obligations of such Person as lessee under leases which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been or should be, in accordance with GAAP, recorded as Capitalized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease Liabilities; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) all other items which, in accordance with GAAP, would be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included as liabilities on the liability side of the balance sheet of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person as of the date at which Indebtedness is to be determined; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) whether or not so included as liabilities in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GAAP, all obligations of such Person to pay the deferred purchase price of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property or services, and indebtedness (excluding prepaid interest thereon) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secured by a Lien on property owned or being purchased by such Person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including indebtedness arising under conditional sales or other title \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retention agreements), whether or not such indebtedness shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assumed by such Person or is limited in recourse; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) all indebtedness secured by any Lien on any property or asset \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned or held by that Person regardless of whether the indebtedness secured \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereby shall have been assumed by that Person or is nonrecourse to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit of that Person (but only to the extent of the lesser of (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indebtedness so secured or (ii) the fair market value of the property or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql asset subject to such Lien; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) all Contingent Liabilities of such Person in respect of any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For all purposes of this Agreement, the Indebtedness of any Person shall include \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Indebtedness of any partnership or joint venture in which such Person is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql general partner or a joint venturer (other than Indebtedness of a joint venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation which is \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not a Subsidiary of such Person and which Indebtedness is nonrecourse to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Land" is defined in the first recital. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Land Lease Amendment" is defined in the recitals. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Leases" or "Lease" means, collectively or individually, the Amended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease and the Amended Land Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessee" is defined in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessor" is defined in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Net Income" means, for any period, the aggregate of all amounts which, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with GAAP, would be included as net income on the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements of Guarantor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Obligations" is defined at Section 2.1. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Operating Lease Payments" means all monetary payment obligations under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any leasing or similar arrangement which, in accordance with GAAP, would be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classified as an operating lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Organic Documents" means (i) Guarantor's certificate of incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and bylaws, and (ii) all shareholder agreements, voting trusts and similar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangements applicable to any of its authorized shares of its capital stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are referred to in Guarantor's Form 10-K or Form 10-Q or of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor is otherwise aware. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Original Building Lease" is defined in the recitals. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Original Land Lease" is defined in the recitals. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "PBGC" means the Pension Benefit Guaranty Corporation and any entity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql succeeding to any or all of its functions under ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Pension Plan" means a "pension plan", as such term is defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql multi-employer plan as defined in section 4001(a)(3) of ERISA), and to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any of its Subsidiaries, or any corporation, trade or business that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is, along with the Guarantor or any of its Subsidiaries, a member of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Controlled Group, may have liability, including any liability by reason of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having been a substantial employer within the meaning of section 4063 of ERISA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any time during the preceding five years, or by reason of being deemed to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a contributing sponsor under section 4069 of ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Person" means any natural person, corporation, partnership, joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql venture, firm, association, trust, government, governmental \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agency or any other entity, whether acting in an individual, fiduciary or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Property" means the Land and the buildings and improvements thereon. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Quick Ratio" means the ratio of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the consolidated cash (excluding restricted cash), Cash Equivalent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investments, and trade accounts receivable net of reserves of Guarantor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) consolidated current liabilities of Guarantor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Tangible Net Worth" means the consolidated net worth of Guarantor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries after subtracting therefrom the aggregate amount of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intangible assets of Guarantor and its Subsidiaries, including goodwill, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql franchises, licenses, patents, trademarks, trade names, copyrights, service \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql marks and brand names. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Taxes" means any present or future income, excise, stamp or franchise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes and other taxes, fees, duties, withholdings or other charges of any nature \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whatsoever imposed by any taxing authority. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "United States" or "U.S." means the United States of America, its fifty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States and the District of Columbia. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Welfare Plan" means a "welfare plan", as such term is defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 3(1) of ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.2 Accounting and Financial Determinations. Unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise specified, all accounting terms used herein shall be interpreted, all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting determinations and computations hereunder (including under Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2.3) shall be made, and all financial statements required to be delivered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall be prepared in accordance with, those generally accepted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting principles ("GAAP") applied in the preparation of the financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements referred to in Section 3.1.5. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1.3 Definitions in the Leases. Unless otherwise defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein or the context otherwise requires, terms used in this Guaranty, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its preamble and recitals, have the meanings provided in the Leases. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTY PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.1 Guaranty. Guarantor hereby absolutely, unconditionally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and irrevocably \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) guarantees to Lessor the full and prompt payment and performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each of the obligations of Lessee under the Leases (collectively, the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Obligations") which Obligations shall include without limitation: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) full and prompt payment of all Basic Rent, Additional Rent, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Capital Rent, the Aggregate Balance Due with respect to Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations under the Leases to purchase the Property and any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments or amounts required to be paid by Lessee under the Leases \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including all such amounts which would become due but for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation of the automatic stay under Section 362(a) of the United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States Bankruptcy Code, 11 U.S.C. (S)362(a)), and the operation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S.C. (S)502(b) and (S)506(b); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the full and prompt payment, execution and performance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all covenants and agreements of Lessee under each of the Leases, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including without limitation Sections 19.3, 20.3, 27, 41 and 51 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended Land Lease and Sections 19.3, 20.3, 27, 41 and 51 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended Building Lease; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the full and prompt payment, execution and performance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all obligations, covenants, liabilities and agreements of Lessee under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Consent Agreement, including without limitation, all amounts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable by Lessee pursuant to Section 5.2 of the Consent Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) agrees to indemnify, hold harmless and reimburse Lessor for (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any damages that Lessor may incur as a result of Lessee's failure to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform any Obligations, including without limitation any damages Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may incur if Lessor sells or causes the Property to be sold to any Person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following Lessee's failure to perform its obligations as set forth at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41 of the Amended Land Lease or Section 41 of the Amended Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease or as provided in the Consent Agreement, and (ii) any and all costs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and expenses (including reasonable attorney's fees and expenses) incurred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessor in enforcing any rights under this Guaranty or under either or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both of the Leases or the Consent Agreement; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) agrees, in the event of any termination of the Leases (or either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of them), to make Lessor whole for, and to \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay to Lessor immediately and without any deduction, discount or offset of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any nature, any amount not paid to Lessor by the Lessee (for any reason and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regardless of any defense or protection available to the Lessee with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect thereto) which would have been paid to Lessor by the Lessee over \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the full term of the Leases and upon the expiration thereof had the Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fulfilled all of its obligations under the Leases including without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation Lessee's obligations arising upon the expiration or termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of either of the Leases. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This is a Guaranty of performance and payment when due and not of collection. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor specifically agrees that it shall not be necessary or required that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor exercise any right, assert any claim or demand or enforce any remedy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whatsoever against Lessee (or any other Person) before or as a condition to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of Guarantor hereunder. Guarantor acknowledges that it has received \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full and complete copies of and has approved the Consent Agreement and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases described in the recitals. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.2 Acceleration of Guaranty. Guarantor agrees that, in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event of the dissolution or insolvency of Lessee or Guarantor, or the inability \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or failure of Lessee or Guarantor to pay debts as they become due, or an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignment by Lessee or Guarantor for the benefit of creditors, or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencement of any case or proceeding in respect of Lessee or Guarantor under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any bankruptcy, insolvency or similar laws, and if such event shall occur at a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time when any of the Obligations of the Lessee may not then be due and payable, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor will pay to Lessor forthwith the full amount which would be payable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder by Guarantor if all such Obligations were then due and payable. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.3 Guaranty Absolute, etc. This Guaranty shall in all respects \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be a continuing, absolute, unconditional and irrevocable guaranty of payment and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance, and shall remain in full force and effect until all Obligations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee have been paid in full or performed, and all obligations of the Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall have been paid in full. Guarantor guarantees that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations of Lessee will be paid and performed strictly in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of the Lease or the Consent Agreement under which they arise, regardless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any law, regulation or order now or hereafter in effect in any jurisdiction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting any of such terms or the rights of Lessor with respect thereto. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability of Guarantor under this Guaranty shall be absolute, unconditional and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable irrespective of, and Guarantor hereby waives: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) any defense based upon any lack of validity, legality or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceability of either of the Leases; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) any defense based upon the failure of Lessor \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) to give notice to Guarantor of the occurrence of any default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessee under the terms of either of the Leases or the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) to assert any claim or demand or to enforce any right or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedy against Lessee or any other Person (including any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guarantor) under the provisions of either of the Leases or the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or otherwise, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) to exercise any right or remedy against any other guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, or collateral securing, any Obligations of the Lessee; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) any change in the time, manner or place of payment or performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, or in any other term of, all or any of the Obligations of Lessee or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other extension, compromise or renewal of any Obligation of Lessee; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) any reduction, limitation, impairment or termination of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations of Lessee for any reason, including any claim of waiver, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release, surrender, alteration or compromise, and Lessor and Lessee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be subject to (and Guarantor hereby waives any right to or claim of) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any defense or setoff, counterclaim, recoupment or termination whatsoever \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by reason of the invalidity, illegality, nongenuineness, irregularity, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compromise, unenforceability of, or any other event or occurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting, the Obligations of Lessee or otherwise; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) any limitation on amounts recoverable from Lessee under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California Civil Code Section 1951.2 in the event of termination of either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or both of the Leases; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) any amendment to, rescission, waiver, or other modification of, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any consent to departure from, any obligation, covenant or agreement set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in either of the Leases or the Consent Agreement (other than and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent that an amendment in writing executed by the Lessor by its terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically indicates that it is the intent of Lessor that such amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduce Guarantor's liability under this Guaranty); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) any addition, exchange, release, surrender or non-perfection of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any collateral, or any amendment to or waiver or release or addition of, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent to departure from, any other guaranty, held by Lessor securing any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Obligations of Lessee; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) any other circumstance which might otherwise constitute a defense \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to, or a legal or equitable discharge of, Lessee, any surety or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any guarantor. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor agrees that any release which may be given by Lessor to Lessee or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other guarantor shall not release Guarantor. Without limiting the foregoing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor acknowledges that a breach of any representation, warranty or covenant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Guarantor hereunder will result in an Event of Default under each of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases. Without limiting any other remedy Lessor may have against Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder or against Lessee under the Leases, Guarantor shall following the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of any such breach under this Guarantee and upon the written demand \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Lessor purchase the Property as required pursuant to Section 41 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended Land Lease and Section 41 of the Amended Building Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.4 Reinstatement, etc. Guarantor agrees that this Guaranty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall continue to be effective or be reinstated, as the case may be, if at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time any payment (in whole or in part) or performance of any of the Obligations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Lessee is rescinded or must otherwise be restored by Lessor, upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insolvency, bankruptcy or reorganization of the Lessee or for any other reason, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all as though such payment or performance had not been made. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.5 Waiver, etc. (a) Guarantor hereby waives promptness, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql diligence, notice of acceptance and any other notice with respect to any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations of Lessee and this Guaranty and any requirement that Lessor protect, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secure, respect or insure any Lien, or any property subject thereto, or exhaust \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any right or take any action against Lessee or any other Person (including any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Guarantor) or entity or any collateral securing the Obligations of Lessee. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor further waives (to the maximum extent permitted by law) any defense \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising by reason of any claim or defense based upon any limitation imposed on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts recoverable by Lessor under the Leases, including, if and to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable, the provisions of California Civil Code Section 1951.2 or an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election of remedies by Lessor including, if and to the extent applicable, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of (S)(S)580d and 726 of the California Code of Civil Procedure or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any similar law of California or any other jurisdiction. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SET FORTH IN THIS GUARANTY, GUARANTOR SPECIFICALLY WAIVES ANY POSSIBLE CLAIM \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT GUARANTOR IS NOT A TRUE GUARANTOR OF THE LEASES (OR EITHER OF THEM), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHETHER SUCH CLAIM IS BASED UPON ANY CONTENTION THAT THE LEASES (OR EITHER OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THEM) ACTUALLY REPRESENT ONE OR MORE LOAN TRANSACTIONS, OR UPON ANY CONTENTION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THAT GUARANTOR ACTUALLY IS THE TRUE DEBTOR IF THE LEASES (OR EITHER OF THEM) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACTUALLY REPRESENT ONE OR MORE LOAN TRANSACTIONS, OR UPON ANY OTHER SIMILAR OR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISSIMILAR CONTENTION, OR UPON ANY COMBINATION THEREOF; AND GUARANTOR FURTHER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIVIL CODE (S)(S) 1951.2, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838, 2839, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2845, 2848, 2849 AND 2850, TO THE EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCEDURE (S)(S) 580A, 580B, 580C, 580D AND \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF TITLE 14, PART IV OF THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CALIFORNIA CIVIL CODE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Without limiting the generality of any other waiver or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision set forth in this Guaranty, Guarantor authorizes Lessor at its sole \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, without notice or demand and without affecting the liability of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor hereunder, to release and reconvey (with or without receipt of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration) any Lien against any or all collateral for the Obligations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee, and to exercise all powers of sale in the Leases and to foreclose any or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all deeds of trust, mortgages or other instruments or agreements by judicial or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-judicial sale, all without affecting the liability of the Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder. Guarantor expressly waives any defense to the recovery by Lessor from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor of any deficiency after a non-judicial sale, including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, any defense arising as a result of any election of remedies by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor which limits or destroys such Guarantor's subrogation rights or such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor's right to proceed against Lessee for reimbursement (including, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, any election by Lessor to exercise its rights under a power \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of sale in or any instruments securing the Obligations of Lessee under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases, any deed of trust or mortgage and any consequential loss by Guarantor of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right to recover any deficiency from the Lessee). Guarantor waives any right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive notice of any judicial or non-judicial sale or the sale or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foreclosure of any real property, and the failure of the Guarantor to receive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such notice shall not impair or affect the Guarantor's liability hereunder. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor warrants and agrees that each of the acknowledgements and waivers set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in this Guaranty is made with full knowledge of its significance and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consequences and that, under the circumstances, the waivers are reasonable and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not contrary to public policy or law. If, despite the foregoing, any of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waivers are determined to be contrary to any applicable law or public policy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such waivers shall be effective only to the maximum extent permitted by law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2.6 Subrogation. Guarantor hereby disclaims, releases and waives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forever any subrogation claims or rights it would otherwise have or be entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to under this Guaranty or pursuant to applicable law as a result of any payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made by Guarantor hereunder or otherwise. Any amount paid to Guarantor on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of any such subrogation rights shall be held in trust for the benefit of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and shall immediately be paid to Lessor and credited and applied against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Obligations of Lessee, whether matured or unmatured, in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of either of the Leases. In furtherance of the foregoing, Guarantor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refrain from taking any action or commencing any proceeding against the Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (or its successors or assigns, whether in connection with a bankruptcy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding or otherwise) to recover any amounts in the respect of payments made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Guaranty to Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND WARRANTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1 Representations and Warranties. Guarantor hereby represents \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and warrants to Lessor as set forth in this Article III. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.1 Organization, etc. Guarantor and each of its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is a corporation validly organized and existing and in good standing under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws of the State of its incorporation or organization, is duly qualified to do \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business and is in good standing as a foreign corporation in each jurisdiction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where the nature of its business requires such qualification (except where the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql failure so to qualify would not, individually or in the aggregate, reasonably be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expected to have a material adverse effect on the financial condition, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, assets, business, properties or prospects of Guarantor) and has full \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power and authority and holds all requisite Governmental Approval to enter into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and perform its obligations under this Guaranty and each of the Operative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Documents and to own and hold under lease its properties and to conduct its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business substantially as currently conducted by it. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.2 Due Authorization, Non-Contravention, etc. The execution, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery and performance by Guarantor of this Guaranty and each of the Operative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements to which it is a party is within the Guarantor's corporate powers, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been duly authorized by all necessary corporate action, and does not \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) contravene Guarantor's Organic Documents; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) contravene any Governmental Requirement, Governmental Approval or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any material contractual restriction (including contractual restrictions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in any loan agreement or instrument to which Guarantor is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party) binding on or affecting Guarantor; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) result in, or require the creation or imposition of, any Lien on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of Guarantor's properties (except in favor of Lessor). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.3 Government Approval, Regulation, etc. No Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approval or other consent or approval of any Person which has not been obtained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is required for the due execution, delivery or performance by Guarantor of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty or any other Operative Agreement to which it or the Lessee is a party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or for the exercise by Lessor of any of its rights or remedies hereunder or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder. Neither Guarantor nor any of its Subsidiaries is an "investment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company" within the meaning of the Investment Company Act of 1940, as amended, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or a "holding company", or a "subsidiary company" of a "holding company", or an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "affiliate" of a "holding company" or of a "subsidiary company" of a "holding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company", \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the meaning of the Public Utility Holding Company Act of 1935, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.4 Validity, etc. This Guaranty and each of the Operative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements to which Guarantor or Lessee is a party constitutes the legal, valid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and binding obligation of Guarantor and Lessee, as applicable, enforceable in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with its terms; except as such enforceability may be limited by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy, insolvency, reorganization or similar laws affecting creditors' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights generally and by principles of equity. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.5 Financial Information. The consolidated balance sheets of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and its Subsidiaries as at December 31, 1991, June 28, 1992, December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27, 1992 and June 27, 1993, and the related consolidated statements of earnings \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and cash flow of Guarantor and such Subsidiaries, copies of which have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnished to Lessor have been prepared in accordance with GAAP consistently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applied, and present fairly the consolidated financial condition of the entities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered thereby as at the dates thereof and the results of their operations for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the periods then ended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.6 No Material Adverse Change. Subject to the current \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql litigation between Guarantor and Intel Corporation described in Section 3.1.9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the effect which that litigation may have upon Guarantor if determined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely to the Guarantor, which litigation and which effect are accurately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Guarantor's Forms 10-Q dated June 28, 1993 and September 26, 1993, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, there has been no material adverse change in the financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, operations, assets, business, properties or prospects of Guarantor or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries since September 27, 1992. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.7 Litigation, Labor Controversies, etc. There is no pending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, to the knowledge of Guarantor, threatened litigation, action, proceeding, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql labor controversy affecting Guarantor or any of its Subsidiaries, or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their respective properties, businesses, assets or revenues which may materially \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely affect the financial condition, operations, assets, business, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties or prospects of Guarantor and its Subsidiaries, taken as a whole, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which purports to affect the legality, validity or enforceability of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty or either of the Leases except as described in Guarantor's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 27, 1992, Guarantor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Reports on Form 10-Q for the periods ended June 28, 1992, March 28, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993, June 27, 1993 and September 26, 1993, and each of the Forms 8-K dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 7, 1993, September 9, 1993, and October 25, 1993. Lessor acknowledges \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of each of the Forms 10-K, Forms 10-Q and Forms 8-K specifically listed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the preceding sentence. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.8 Subsidiary. Guarantor owns all of the outstanding voting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock in Lessee and all stock, securities and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indentures convertible into voting stock. Except for Guarantor, no person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having any interest in Lessee has any right to cause a liquidation, distribution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or sale of all or a substantial portion of Lessee or its assets. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.9 Ownership of Properties. Except as permitted pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.2.2, Guarantor and each of its Subsidiaries owns good and marketable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql title to all of its material properties and assets, real and personal, tangible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and intangible, of any nature whatsoever (including patents, trademarks, trade \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql names, service marks and copyrights), free and clear of all Liens, charges or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims (including infringement claims with respect to patents, trademarks, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyrights and the like other than infringement claims which would not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially and adversely affect the business of Guarantor and its Subsidiaries, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taken as a whole, or infringement claims which are described in Guarantor's Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K for the Fiscal Year ended December 27, 1992, Form 10-Q for the quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql periods ended March 28, 1993, June 27, 1993 and September 26, 1993, and Form 8- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ks dated September 7, 1993, September 9, 1993 and October 25, 1993. To the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Guarantor's knowledge after due investigation, and subject to the last \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence of this Section 3.1.9, Guarantor and each of its Subsidiaries owns or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holds licenses for all necessary patents, patent rights and other similar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intellectual property rights to conduct its business as presently conducted. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor's right to use certain intellectual property rights pertaining to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel 386 and 486 microprocessors is the subject of current litigation between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and Intel Corporation. The current status of that litigation, and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect which that litigation may have upon Guarantor if determined adversely to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Guarantor, are accurately described in Guarantor's Forms 10-Q dated June 27, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 and September 26, 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.10 Taxes. Guarantor and each of its Subsidiaries has filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all tax returns and reports required by any Governmental Authority to have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed by it and has paid all Taxes and governmental charges thereby shown to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owing, except any such Taxes or charges which are being diligently contested in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql good faith by appropriate proceedings and for which adequate reserves in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with GAAP shall have been set aside on its books. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.11 Pension and Welfare Plans. During the twelve-consecutive- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month period prior to the date of the execution and delivery of this Guaranty no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql steps have been taken to terminate any Pension Plan, and no contribution failure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has occurred with respect to any Pension Plan sufficient to give rise to a Lien \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under section 302(f) of ERISA. No condition exists or event or transaction has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred with respect to any Pension Plan which might result in the incurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Guarantor or any member of the Controlled Group of any material liability, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fine or penalty. Neither Guarantor nor any member of the Controlled Group has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any contingent liability with respect to any post-retirement benefit under a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Welfare Plan, other \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than liability for continuation coverage described in Part 6 of Title I of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.12 Environmental Warranties. Except for matters \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Environmental Matters") set forth in Schedule II, none of which would have a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on the financial condition, operations, assets, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business, properties or prospects of Guarantor and its Subsidiaries, taken as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) all facilities and property (including underlying groundwater) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned or leased by Guarantor or any of its Subsidiaries, including without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation the Property, have been, and continue to be, owned or leased by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and its Subsidiaries in material compliance with all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Environmental Laws; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) there have been no past, and there are no pending or threatened \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) claims, complaints, notices or requests for information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by Guarantor or any of its Subsidiaries with respect to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleged violation of any Environmental Law, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) complaints, notices or inquiries to Guarantor or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries regarding potential liability under any Environmental Law; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) there have been no Releases of Hazardous Materials at, on or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any property now or previously owned or leased by Guarantor or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries, including without limitation the Property, that, singly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in the aggregate, have, or may reasonably be expected to have, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on the financial condition, operations, assets, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business, properties or prospects of Guarantor and its Subsidiaries, taken \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a whole; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Guarantor and its Subsidiaries have been issued and are in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material compliance with all Governmental Requirements and Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approvals relating to environmental matters and necessary or desirable for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their businesses; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) no property now or previously owned or leased by Guarantor or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Subsidiaries, including without limitation the Property, is listed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or proposed for listing (with respect to owned property only) on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql National Priorities List pursuant to CERCLA, on the CERCLIS or on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar state list of sites requiring investigation or clean-up; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) to Guarantor's best knowledge, there are no underground storage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tanks, active or abandoned, including \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql petroleum storage tanks, on or under any property now or previously owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or leased by either Guarantor or any of its Subsidiaries, including without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation the Property, that, singly or in the aggregate, have, or may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably be expected to have, a material adverse effect on the financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, operations, assets, business, properties or prospects of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and its Subsidiaries, taken as a whole; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) neither Guarantor nor any of its Subsidiaries has directly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transported or directly arranged for the transportation of any Hazardous \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Material to any location which is listed or proposed for listing on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql National Priorities List pursuant to CERCLA, on the CERCLIS or on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar state list or which is the subject of federal, state or local \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement actions or other investigations which may lead to claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Guarantor or any Subsidiary thereof for any remedial work, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damage to natural resources or personal injury, including claims under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CERCLA, which, singly or in the aggregate, have, or may reasonably be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expected to have, a material adverse effect on the financial condition, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, assets, business, properties or prospects of Guarantor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries, taken as a whole; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) there are no polychlorinated biphenyls or friable asbestos \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present at any property now or previously owned or leased by Guarantor or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries, including without limitation the Property, that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql singly or in the aggregate, have, or may reasonably be expected to have, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on the financial condition, operations, assets, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business, properties or prospects of Guarantor and its Subsidiaries, taken \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a whole; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) no conditions exist at, on or to Guarantor's best knowledge under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any property now or previously owned or leased by Guarantor or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries, including without limitation the Property, which, with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql passage of time, or the giving of notice or both, would give rise to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability under any Environmental Law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Section 3.1.12 shall be deemed to limit or modify any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation or warranty in the Environmental Indemnity Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.13 Regulations G, U and X. Neither the Guarantor nor any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries is engaged in the business of extending credit for the purpose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of purchasing or carrying margin stock. Terms for which meanings are provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F.R.S. Board Regulation G, U or X or any regulations substituted therefor, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time in effect, are used in this Section with such meanings. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.14 No Default. Neither Guarantor nor any of its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is (a) in default under any indenture, mortgage, loan \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement or other agreement or instrument to which any of them is now a party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by which it is bound, or (b) in violation of any Governmental Requirements or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Approvals, which, in the case of (a) or (b) above, would (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially adversely affect either the Property or the properties, business, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations or financial condition of Guarantor and its Subsidiaries taken as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole, (ii) materially adversely affect the ability of Guarantor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries to perform any of its obligations under this Guarantee or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Operative Agreements, (iii) materially adversely affect the rights of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Person a party to an Operative Agreement, or (iv) materially adversely \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the transactions contemplated by any of the Operative Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.15 Representations and Warranties in the Leases. Each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's representations and warranties contained in the Leases and the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement is true, complete and correct in all material respects. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3.1.16 Accuracy of Information. All factual information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql heretofore or contemporaneously furnished by or on behalf of Guarantor or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries in writing to the Lessor for purposes of or in connection with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Guaranty or any Operative Agreements or any transaction contemplated hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or thereby is, and all other such factual information hereafter furnished by or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on behalf of Guarantor or any of its Subsidiaries to Lessor will be, true and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accurate in every material respect on the date as of which such information is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated or certified and as to the documents and materials listed on and except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically set forth in Schedule III as of the date of execution and delivery \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Guaranty, and such information is not, or shall not be, as the case may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be, incomplete by omitting to state any material fact necessary to make such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information not misleading. Notwithstanding the foregoing, while Guarantor has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised reasonable care in preparing the financial forecasts and construction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql budgets furnished to Lessor, Lessor acknowledges that the information contained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such forecasts and budgets are preliminary and subject to change. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVENANTS, ETC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1 Affirmative Covenants. Guarantor covenants and agrees that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so long as any portion of the Obligations of Lessee shall remain unpaid or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unperformed, Guarantor will, unless Lessor shall otherwise consent in writing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform the obligations set forth in this Section. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.1 Financial Information, Reports, Notices, etc. Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will furnish, or will cause to be furnished, to Lessor \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copies of the following financial statements, reports, notices and information: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) as soon as available and in any event within 45 days after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql end of each of the first three Fiscal Quarters of each Fiscal Year a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated balance sheet of Guarantor as of the end of such Fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarter along with a consolidated statements of earnings and cash flow for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor for such Fiscal Quarter and for the period commencing at the end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the previous Fiscal Year and ending with the end of such Fiscal Quarter, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified by the chief financial or accounting officer of Guarantor; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) as soon as available and in any event within 90 days after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql end of each Fiscal Year a copy of the annual audit report for such Fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Year for Guarantor, including therein a consolidated balance sheet of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor as of the end of such Fiscal Year and consolidated statements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings and cash flow of Guarantor for such Fiscal Year, certified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (without any Impermissible Qualification) in a manner acceptable to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor by Ernst and Young or other independent certified public accountants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptable to the Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) as soon as available and in any event within 45 days of the end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each Fiscal Quarter, a certificate executed by the chief financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officer of Guarantor, showing (in reasonable detail and appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculations and computations in all respects satisfactory to Lessor) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with the financial covenants set forth in Sections 4.2.1 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2.3; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) as soon as possible and in any event within three business days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after Guarantor or any of its Subsidiaries has knowledge of the occurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Default or a default or breach by Guarantor of any of Guarantor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants or representations or warranties set forth in this Guaranty, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statement of the chief financial or accounting officer of Guarantor setting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth details of such Default or default and the actions Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor have taken or propose to take with respect thereto; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) as soon as possible and in any event within three business days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after (x) the occurrence of any adverse development with respect to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql litigation, action, proceeding, or labor controversy described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1.7 or (y) the commencement of any labor controversy, litigation, action, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding of the type described in Section 3.1.7, notice thereof and upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request copies of all documentation relating thereto; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) promptly after the receipt, sending or filing thereof, copies of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all material (i) statements, reports or other documents sent or received by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or Lessee to or from any Governmental Authority regarding any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Property or any of the Operative Agreements or to or from its security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders and (ii) all reports and registration statements which Guarantor or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries files with the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any national securities exchange; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) immediately upon the institution of any steps by Guarantor or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Person to terminate any Pension Plan, or the failure to make a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required contribution to any Pension Plan if such failure is sufficient to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give rise to a Lien under section 302(f) of ERISA, or the taking of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action with respect to a Pension Plan which could result in the requirement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Guarantor furnish a bond or other security to the PBGC or such Pension \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, or the occurrence of any event with respect to any Pension Plan which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could result in the incurrence by Guarantor of any material liability, fine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or penalty, or any material increase in the contingent liability of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor with respect to any post-retirement Welfare Plan benefit, notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof and upon request copies of all documentation relating thereto; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) such other information respecting the condition or operations, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial or otherwise, of Guarantor or any of its Subsidiaries as Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may from time to time reasonably request. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.2 Compliance with Laws, etc. Guarantor will, and Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will cause each of its Subsidiaries to, comply in all material respects with all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Requirements and Governmental Approvals the noncompliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which would (i) reasonably be expected to have a material adverse effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial condition, operations, assets, business or prospects of Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and its Subsidiaries, taken as a whole, (ii) result in the creation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposition of a Lien (except as expressly permitted herein) or (iii) subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor to any liability, such compliance to include: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the maintenance and preservation of the corporate existence of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and Lessee and qualification as a foreign corporation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and each of its Subsidiaries in each jurisdiction where the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nature of its business requires such qualification; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the payment, before the same become delinquent, of all taxes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessments and governmental charges imposed upon the Guarantor or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries or upon their respective property except to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the failure to pay the same would not reasonably be expected to have a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material adverse effect on the financial condition, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, assets, business, properties or prospects of Guarantor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries, taken as a whole. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.3 Maintenance of Properties. Guarantor will, and Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will cause each of its Subsidiaries to, maintain, preserve, protect and keep the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property and all of its other facilities and properties in good repair, working \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order and condition and make necessary and proper repairs, renewals and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacements as required by Lessee under the Leases and so that its business may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be properly conducted at all times. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.4 Insurance. The Guarantor will, and will cause Lessee and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of its other Subsidiaries to, maintain or cause to be maintained with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable insurance companies insurance with respect to its properties and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql businesses (including business interruption insurance) against such casualties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and contingencies and of such types and in such amounts as is customary in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case of similar businesses and will, upon request of Guarantor furnish to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor at reasonable intervals a certificate of an authorized officer of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor setting forth the nature and extent of all insurance maintained by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor and its Subsidiaries in accordance with this Section and as required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under each of the Leases and the Consent Agreement. All such insurance shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written by reputable insurers legally qualified to issue such insurance having \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an A.M. Best policyholders rating of not less than A, or if written by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurer domiciled outside of the United States of America, such insurance shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not exceed in the aggregate 10% of the policyholders' surplus of such insurer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.5 Books and Records. The Guarantor will, and will cause each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Subsidiaries to keep books and records which accurately reflect all of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its business affairs and transactions and permit Lessor or any of their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective representatives, at reasonable times and intervals and upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable notice, to visit all of its and its Subsidiaries' offices, to discuss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its financial matters with its and its Subsidiaries' officers and independent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public accountant (and Guarantor hereby authorizes such independent public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accountant to discuss Guarantor's and its Subsidiaries' financial matters with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor or its representatives) and to examine any of its and its Subsidiaries' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql books or other corporate or partnership records. On and after the occurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and continuance of any Default or Event of Default, the Guarantor shall pay any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable fees of such independent public accountant incurred in connection \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Lessor's exercise of its rights pursuant to this Section. Guarantor will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not, and Guarantor will cause each of its Subsidiaries not to, except in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ordinary course of business, destroy any of the aforementioned books, records \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and logs without the prior consent of Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.6 Environmental Covenant. Guarantor will, and Guarantor will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause each of its Subsidiaries to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) use and operate the Property and all of its other facilities and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties and to undertake and carry out the Alterations in material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with all Environmental Laws, keep all necessary permits, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approvals, certificates, licenses and other authorizations relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql environmental matters in effect and remain in material compliance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therewith, and handle all Hazardous Materials in material compliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all applicable Environmental Laws; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) immediately notify Lessor and provide copies upon receipt of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material written claims, complaints, notices or inquiries relating to (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the condition of the Property or the compliance with Environmental Laws in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the use or operation of the Property or (ii) Guarantor's or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries' other facilities and properties or their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with Environmental Laws which may have an adverse material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect on Guarantor; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) provide such information and certifications which Lessor may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably request from time to time to evidence compliance with this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1.6. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Section 4.1.6 shall be deemed to limit or modify any covenant or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negative covenant in the Environmental Indemnity Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.7 Maintenance of Authorizations, etc. Guarantor will, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor will cause each of its Subsidiaries to, maintain all necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Approvals with respect to the ownership, operation and maintenance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Property and the construction of the additions and all of its other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities and properties, and Guarantor will, and Guarantor will cause each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its Subsidiaries to, comply with all Governmental Requirements and Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approvals governing the ownership, operation and maintenance thereof (except (a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those being contested in good faith and by appropriate proceedings and (b) those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the failure of which to maintain or comply with would not (i) reasonably be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expected to have a material adverse effect on the financial condition, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations, assets, business or prospects of the Guarantor or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries, (ii) result in the creation or imposition of any Lien (except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressly permitted herein or in the Leases), or (iii) subject Lessor to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.8 Performance of Obligations. Guarantor will, and Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will cause Lessee to, duly perform and observe all of its obligations, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants, and agreements under the Operative Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.1.9 Further Assurances. Guarantor agrees that, from time to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time at its own expense, it shall, and Guarantor shall cause each of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries to, promptly execute and deliver all further agreements, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments and documents, obtain or make such \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional consents or filings, and take all further actions that may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary, or that the Lessor may reasonably request, in order for the Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its Subsidiaries to be in compliance with the terms hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2 Negative Covenants. Guarantor covenants and agrees that, so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long as any portion of the Obligations of the Lessee shall remain unpaid or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unperformed, Guarantor will not, without the prior written consent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor, do anything prohibited in this Section. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.1 Indebtedness. Guarantor will not, and Guarantor will not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permit any of its Subsidiaries to, create, incur, assume or suffer to exist or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise become or be liable in respect of any Indebtedness, other than, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without duplication, the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Indebtedness in respect of this Guaranty and Obligations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Indebtedness existing as of the date of this Guarantee which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql identified in the financial statements described at Section 3.1.5; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Indebtedness in an aggregate principal amount not to exceed ten \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent of Tangible Net Worth at any time outstanding which is incurred by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any of its Subsidiaries to a vendor of any assets to finance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its acquisition of such assets provided that payment of such Indebtedness \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is secured by a Lien encumbering only such assets; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) unsecured Indebtedness incurred in the ordinary course of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business (including open accounts extended by suppliers on normal trade \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms in connection with purchases of goods and services, but excluding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indebtedness incurred through the borrowing of money or Contingent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Liabilities); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Guarantor's guaranty of not more than $175,000,000 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indebtedness in a joint venture between Guarantor and Fujitsu Limited of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japan as described in a Joint Venture Agreement between Guarantor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited of Japan dated March 30, 1993; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Indebtedness of not more than $105,000,000 in principal at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time outstanding in respect of the Bank of America Credit Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) issuance by Guarantor of its unsecured senior notes of not more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than $106,000,000, in replacement of Guarantor's $106,000,000 Senior Notes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due November 20, 1992; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) other Indebtedness of Guarantor or any of its Subsidiaries for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borrowed money or in the nature of Contingent Liabilities in an aggregate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount not to exceed twenty-five percent of Tangible Net Worth at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that no new Indebtedness otherwise permitted by clause (c), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d), or (e) shall be incurred if, immediately prior to or after giving effect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --- --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the incurrence thereof, any Default shall have occurred and be continuing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.2 Liens. Guarantor will not, and Guarantor will not permit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon any of its property, revenues or assets (including the Property), whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql now owned or hereafter acquired, except: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Liens securing payment of the Obligations; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Liens granted prior to the date hereof to secure payment of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indebtedness of the type permitted and described in clause (b) of Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2.1; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Liens granted to secure payment of Indebtedness of the type \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted and described in clause (c) of Section 4.2.1 and covering only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those assets acquired with the proceeds of such Indebtedness; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Liens for taxes, assessments or other governmental charges or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql levies not at the time delinquent or thereafter payable without penalty or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being diligently contested in good faith by appropriate proceedings and for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which adequate reserves in accordance with GAAP shall have been set aside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on its books; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Liens of carriers, warehousemen, mechanics, materialmen and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql landlords incurred in the ordinary course of business for sums not overdue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or being diligently contested in good faith by appropriate proceedings and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for which adequate reserves in accordance with GAAP shall have been set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aside on its books; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Liens incurred in the ordinary course of business in connection \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with workmen's compensation, unemployment insurance or other forms of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental insurance or benefits, or to secure performance of tenders, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutory obligations, leases and contracts (other than for borrowed money) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entered into in the ordinary course of business or to secure obligations on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surety or appeal bonds; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) judgment Liens which in the aggregate do not exceed $10,000,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and which are in existence less than 10 days after the entry thereof or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to which execution has been \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stayed or the payment of which is covered in full (subject to a customary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deductible) by insurance maintained with responsible insurance companies; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however that no Liens otherwise permitted by (a) through (g) above \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be permitted if such Liens are otherwise prohibited under either of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases or the Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.3 Financial Condition. Guarantor will not permit at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Its Tangible Net Worth to be less than the sum of: (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $700,000,000, (ii) 75% of Net Income for each Fiscal Quarter commencing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Fiscal Quarter commencing January 1, 1992, and (iii) 100% of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional equity; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Its Quick Ratio to be less than 1.1 to 1.0. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Its Debt to Tangible Net Worth Ratio to be greater than 0.75 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.00. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Its Fixed Charge Coverage Ratio for the immediately preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of four Fiscal Quarters to be less than 1.25 to 1.00. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor agrees that if any financial covenant set forth in the Bank of America \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Agreement or any other loan or debt facility in an amount equal to or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater than $50,000,000 provides at any time, for a greater Tangible Net Worth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement, lesser Debt to Tangible Net Worth ratio, greater Quick Ratio or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater Fixed Charge coverage ratio as set forth above, then all or any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above requirements and ratios shall be deemed modified to be at least equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such covenant or ratio applicable to Guarantor and any of its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as set forth in the Bank of America Credit Agreement or such other facility. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.4 Restricted Payments, etc. If any Default or default or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach hereunder shall have occurred and be continuing: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Guarantor will not declare, pay or make any dividend or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution (in cash, property or obligations) on any shares of any class \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of capital stock (now or hereafter outstanding) of Guarantor or on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warrants, options or other rights with respect to any shares of any class \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of capital stock (now or hereafter outstanding) of Guarantor (other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividends or distributions payable in its common stock or warrants to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase its common stock or splitups or reclassifications of its stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into additional or other shares of its common stock) or apply, or permit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its Subsidiaries to apply, any of its funds, property or assets to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purchase, redemption, sinking fund or other retirement of, or agree or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permit any of its Subsidiaries to purchase or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql redeem, any shares of any class of capital stock (now or hereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding), or warrants, options or other rights with respect to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of any class of capital stock (now or hereafter outstanding); and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Guarantor will not, and will not permit any of its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, make any deposit for any of the foregoing purposes during any period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when any such payment would be prohibited. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.5 Rental Obligations. Guarantor will not, and Guarantor will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not permit any of its Subsidiaries to, enter into at any time any arrangement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which does not create a Capitalized Lease Liability and which involves the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql leasing by either Guarantor or any of its Subsidiaries from any lessor of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql real or personal property (or any interest therein) if non-performance by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any of its Subsidiaries of its obligations under such arrangement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would reasonably be expected to have a material adverse effect on the financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, operations, assets, business, properties or prospects of Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its Subsidiaries taken as a whole. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.6 Consolidation, Merger, etc. Guarantor will not, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor will not permit any of its Subsidiaries including without limitation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee to, liquidate or dissolve, consolidate with, or merge into or with, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other corporation, except any Subsidiary (other than Lessee) may liquidate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voluntarily into, dissolve voluntarily into, and may merge with and into, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any other Subsidiary of Guarantor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.7 Asset Dispositions, etc. Guarantor will not, and Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not permit any of its Subsidiaries to, sell, transfer, lease, dispose, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contribute or otherwise convey, or grant options, warrants or other rights with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to, all or any substantial part of its assets (including accounts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receivable and capital stock of Subsidiaries) to any Person, unless (a) a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default or a default or breach hereunder has not occurred and is continuing, (b) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such sale, transfer, lease, contribution or conveyance is in the ordinary course \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of business of the Guarantor or such Subsidiary and (c) such sale, transfer, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lease, contribution or conveyance would not have a material adverse affect on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or such Subsidiary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.8 Bankruptcy Proceedings. Guarantor will not take any action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to commence, institute, instigate, or cause to be filed bankruptcy proceedings, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether involuntary or voluntary, against any of its Subsidiaries, including, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.9 Transactions with Affiliates. Guarantor will not, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor will not permit any of its Subsidiaries to, enter into, or cause, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suffer or permit to exist any arrangement or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract with any of its other Affiliates unless such arrangement or contract is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair and equitable to Guarantor or such Subsidiary and is an arrangement or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract of the kind which would be entered into by a prudent Person in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql position of Guarantor or such Subsidiary with a Person which is not one of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.10 Negative Pledges, Restrictive Agreements, etc. Except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in this Guaranty, Guarantor will not, and Guarantor will not permit any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Subsidiaries to, enter into any agreement prohibiting or restricting: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the creation or assumption of any Lien upon its properties, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revenues or assets, whether now owned or hereafter acquired; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) the ability of either Guarantor or Lessee to amend or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modify this Guaranty or the Leases; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the ability of any Subsidiary to make any payments, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, to either Guarantor or Lessee by way of dividends, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributions, advances, repayments of loans or advances, reimbursements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql management and other intercompany charges, expenses and accruals or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql returns on investments, or any other agreement or arrangement which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restricts the ability of any such Subsidiary to make any payment, directly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or indirectly, to either Guarantor or Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing, the restrictions set forth in subsection \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2.10(a) above shall not be applicable to any agreement governing any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indebtedness permitted by (i) clause (b) of Section 4.2.1 as in effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of the Original Guaranty, (ii) clause (c) of Section 4.2.1 as to the assets \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financed with the proceeds of such Indebtedness, or (iii) clause (f) of Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2.1 as to assets other than the Property. The restriction set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection 4.2.10(b) above shall not be applicable to Section 7.17 of the Bank \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of America Credit Agreement as such Section 7.17 was in effect on January 4, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993. The restriction set forth in subsection 4.2.10(c) above shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to Section 7.05 of the Bank of America Credit Agreement as such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.05 was in effect on January 4, 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4.2.11 Fees. Guarantor will pay or cause to be paid all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment banking, broker's or finder's fees and commissions with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the transactions contemplated by the Operative Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COLLATERAL ACCOUNT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.1 Deposit Events. Each of the following events or occurrences \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in this Section 5.1 shall constitute a "Deposit Event": \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1.1 Any representation or warranty of Guarantor made or deemed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made under this Guaranty, any Operative Agreement to which Guarantor is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a party or other writing or certificate furnished by or on behalf of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor to Lessor for the purposes of or in connection with this Guaranty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is or shall be incorrect when made in any material respect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1.2 Guarantor shall default, fail to perform or observe any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants set forth at Article IV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1.3 Any Change in Control shall occur. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1.4 Guarantor or any of its Subsidiaries defaults on the payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, or is otherwise in default (after expiration of any applicable grace \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period) under, any Indebtedness (including, without limitation, the Bank of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql America Credit Agreement) of Guarantor or such Subsidiaries to any Person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Persons where such Indebtedness (individually or in the aggregate) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeds $10,000,000; or the occurrence of any event which would, by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of Sections 8.01(i) or 8.01(j) of the Bank of America Credit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement (as such Agreement is in effect on January 4, 1993), constitute \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Event of Default (as defined in the Bank of America Credit Agreement) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder regardless of whether the Bank of America Credit Agreement is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect at such time or has been terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5.2 Deposit and Applications. Upon the occurrence of a Deposit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event, Guarantor shall within two (2) business days following receipt of written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand from Lessor deposit in a cash collateral account (the "Collateral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account") maintained with Lessor and entitled "AMD Pledge Collateral Account for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of CIBC Inc." an amount equal to the Aggregate Balance Due plus the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present value (using a discount rate of five percent (5%)) of the remaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unpaid Basic Rent due under each of the Leases. The amount deposited in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Collateral Account shall be invested by Lessor at the direction of Guarantor in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Equivalent Investments. All interest, dividends and earnings and other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributions on such Cash Equivalent Investments shall also be deposited in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Collateral Account. Lessor shall not incur any liability as a result of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions taken or not taken by it on its behalf in connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintenance of the Collateral Account and the investment of amounts deposited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein, provided Lessor has not acted with gross negligence or willful \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misconduct. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 30 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Collateral Account shall serve as security for the payment and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance by Lessor of the Obligations. In the event of an Event of Default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under either of the Leases, including without limitation Lessee's failure to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform its obligations under Section 41 of each of the Leases or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor's failure to promptly perform and/or pay pursuant to this Guaranty, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor is authorized, without giving written notice to, or the requirement that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any action be taken by, Guarantor to apply for the benefit of Lessor all or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Collateral Account to the payment of the Obligations. The rights of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lessor with respect to the Collateral Account are in addition to and not in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation of Lessor's other rights and remedies under this Guaranty and each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Leases, including without limitation the right of Lessor to declare an Event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Default upon the occurrence of any event described in Section 5.1 above or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand that Guarantor purchase the Property pursuant to the last sentence in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final paragraph of Section 2.3 of this Guaranty, and each such other right and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedy may be exercised independently of Lessor's rights under this Article V. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.1 Successors, Transferees and Assigns; Transfers of Notes, etc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Guaranty shall be binding upon Guarantor and its successors, transferees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and assigns and inure to the benefit of and be enforceable by the Lessor and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors, transferees and assigns, including without limitation any assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of all or any portion of Lessor's interest in the Leases or the Property. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.2 Amendments, etc. No amendment to or waiver of any provision \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Guaranty, nor consent to any departure by either Guarantor herefrom, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall in any event be effective unless the same shall be in writing and signed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessor, and then such waiver or consent shall be effective only in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specific instance and for the specific purpose for which given. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.3 Notices. All notices, requests, demands and other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communications required or permitted hereunder shall be in writing and shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to have been duly given when delivered by hand or on two business days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following consignment (freight prepaid) to a commercial overnight air courier \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service or seven business days after being mailed, first class with postage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepaid, return receipt requested: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If to the Guarantor, to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 DeGuigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, California 94086-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 DeGuigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, California 94086-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: General Counsel \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to such other person or address as the Guarantor shall furnish to the Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If to the Lessor, to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIBC Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 275 Battery Street, Suite 1840 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql San Francisco, California 94111 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telecopy: (415) 399-5761 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Managing Director, Electronics Group \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIBC Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 425 Lexington Avenue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New York, New York 10017 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Managing Director, Leasing Group \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to such other person or address as the Lessor shall furnish to the Guarantor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.4 No Waiver; Remedies. In addition to, and not in limitation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of, Section 2.3 and Section 2.5, no failure on the part of Lessor to exercise, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and no delay in exercising, any right hereunder shall operate as a waiver \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof; nor shall any single or partial exercise of any right hereunder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preclude any other or further exercise thereof or the exercise of any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right. The remedies herein provided are cumulative and not exclusive of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies provided by law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.5 Captions. Section captions used in this Guaranty are for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convenience of reference only, and shall not affect the construction of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.6 Severability. Wherever possible each provision of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty shall be interpreted in such manner as to be effective and valid under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable law, but if any provision of this Guaranty shall be prohibited by or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalid under such law, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 32 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such provision shall be ineffective to the extent of such prohibition or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalidity, without invalidating the remainder of such provision or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remaining provisions of this Guaranty. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.7 Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.8 Forum Selection and Consent to Jurisdiction. ANY LITIGATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR ACTIONS OF LESSOR OR GUARANTOR SHALL BE BROUGHT AND MAINTAINED IN THE COURTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THE STATE OF CALIFORNIA OR IN THE UNITED STATES DISTRICT COURT FOR THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NORTHERN DISTRICT OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ENFORCEMENT OF EITHER OR BOTH OF THE LEASES OR THE CONSENT AGREEMENT OR AGAINST \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE LESSOR'S OPTION, IN THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COURTS OF ANY JURISDICTION WHERE THE PROPERTY OR SUCH COLLATERAL OR OTHER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY MAY BE FOUND. GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA AND OF THE UNITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA FOR THE PURPOSE OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. GUARANTOR FURTHER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF CALIFORNIA. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORUM. TO THE EXTENT THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, GUARANTOR HEREBY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GUARANTY AND THE OTHER OPERATIVE AGREEMENTS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6.9 Waiver of Jury Trial. GUARANTOR AND, BY ITS ACCEPTANCE OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS GUARANTY, LESSOR, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RIGHTS EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE OTHER OPERATIVE AGREEMENTS. GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROVISION WAS A MATERIAL INDUCEMENT FOR LESSOR ENTERING INTO THE LEASES AND FOR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LESSOR TO ENTER INTO THE CONSENT AGREEMENT. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delivered by its officer thereunto duly authorized as of the date first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above written. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accepted this 17 day \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIBC INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Vice President \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:_______________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 34 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_5}{\*\bkmkend doc_1_5} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.29(b) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY, dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 21, 1994 (this "Amendment"), by and between ADVANCED MICRO DEVICES, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INC., a Delaware corporation (the "Guarantor"), and CIBC INC., a Delaware \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation ("Lessor"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql W I T N E S S E T H: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, pursuant to a Land Lease between AMD International Sales & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service, Ltd., a Delaware corporation (the "Lessee") and Lessor, dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 22, 1992 and recorded on September 22, 1992 as Instrument No. 11550953 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Official Records of the Recorder of Santa Clara County, California (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Recorder's Office"), as amended by that certain First Amendment to Land Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of December 22, 1992 and recorded on January 5, 1993 as Instrument No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11720033 in the Recorder's Office, and as further amended by that certain Second \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment to Land Lease dated as of December 17, 1993 and recorded on December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20, 1993 as Instrument No. 12271737 in the Recorder's Office (such Land Lease, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as so amended, is referred to herein as the "Land Lease"), Lessor leased to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee the land (the "Land") described at Schedule I to the Guaranty (defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, pursuant to a Building Lease between Lessee and Lessor, dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of September 22, 1992 and recorded on September 22, 1992 as Instrument No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11550954 in the Recorder's Office, as amended by that certain First Amendment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease, dated as of December 22, 1992 and recorded on January 5, 1993 as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instrument No. 11720034 in the Recorder's Office, and as further amended by that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain Second Amendment to Building Lease, dated as of December 17, 1993 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded on December 20, 1993 as Instrument No. 12271738 in the Recorder's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Office (such Building Lease, as so amended, is referred to herein as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Building Lease"), Lessor leased to Lessee the building and improvements located \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the Land, and Lessor funded certain Renovations (as defined in the Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease), all as more specifically described in the Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, the Guarantor executed and delivered to Lessor a Guaranty dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of September 22, 1992, which Guaranty was amended and restated by that certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended and Restated Guaranty dated as of January 4, 1993, and further amended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and restated by that certain Amended and Restated Guaranty dated as of December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17, 1993 (collectively, the "Guaranty"; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, the Guarantor, Bank of America National Trust and Savings \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Association, as Agent, First National Bank of Boston, as Co-Agent, and certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other Banks, entered into a Credit Agreement dated as of January 4, 1993 (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Bank of America Credit Agreement"); \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, contemporaneously with the execution and delivery of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment, the Bank of America Credit is being amended and restated by a certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended and Restated Credit Agreement, dated as of September 21, 1994 (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Effective Date"), among the Guarantor, Bank of America National Trust and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Savings Association, as Agent, First National Bank of Boston, as Co-Agent, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain other Banks (the "Restated Bank of America Credit Agreement"); and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, the Guarantor has requested that the Lessor enter into this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment with the Guarantor; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW THEREFORE, for good and valuable consideration the receipt of which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby acknowledged, the Guarantor and the Lessor agree as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Recitals; Definitions. The foregoing recitals are hereby incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into this Amendment. Unless otherwise defined herein or the context otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires, terms used in this Amendment, including its preamble and recitals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the meanings provided in the Guaranty. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Restated Bank of America Credit Agreement. As of the Effective Date, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following definition is hereby inserted in alphabetical order in Section 1.1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Guaranty: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Restated Bank of America Credit Agreement" means the Bank of America \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Agreement, as amended and restated by that certain Amended and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restated Credit Agreement, dated as of September 21, 1994, among the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor, Bank of America National Trust and Savings Association, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agent, First National Bank of Boston, as Co-Agent, and certain other Banks, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the same may be further amended, modified, supplemented or restated from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time to time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Amendment to Section 4.2.1. As of the Effective Date, clause (f) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.2.1 of the Guaranty is hereby deleted and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Indebtedness of not more than $250,000,000 in principal at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time outstanding in respect of the Restated Bank of America Credit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Amendment to Section 4.2.3. As of the Effective Date, all references \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in section 4.2.3 of the Guaranty to the Bank of America \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -2- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Credit Agreement are hereby changed to the Restated Bank of America Credit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Amendment to Section 4.2.10. As of the Effective Date, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql penultimate sentence of Section 4.2.10 of the Guaranty is hereby deleted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Amendment to Section 5.1.4. As of the Effective Date, the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference to the Bank of America Credit Agreement in Section 5.1.4 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty is hereby changed to the Restated Bank of America Credit Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Captions. Section captions used in this Amendment are for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convenience of reference only, and shall not affect the construction of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amendment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Affirmation of Guaranty. Except as amended by this Amendment, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty is unmodified; and, as amended by this Amendment, the Guaranty remains \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in full force and effect and is hereby reaffirmed by the Guarantor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Lease Documents. All references in the Building Lease and the Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease to the "Guaranty" shall hereafter refer to the Guaranty as amended hereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Counterparts. This Amendment may be executed in several \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counterparts, each of which shall be an original, but all of which together \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall constitute one and the same instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -3- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, each of Guarantor and Lessor has caused this Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be duly executed and delivered by its officer thereunto duly authorized as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date first above written. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. CIBC INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Marvin D. Burkett By:/s/ Robert A. Lever \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MARVIN D. BURKETT Name: Robert A. Lever \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President and Title: Vice President \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:/s/ James E. Anderson \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: James E. Anderson \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Managing Director \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSENTED AND AGREED TO: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: AMD INTERNATIONAL SALES & SERVICE, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LTD. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By:/s/ Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: President \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSENTED AND AGREED TO: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: LONG-TERM CREDIT BANK OF JAPAN, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LOS ANGELES AGENCY \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ Motokazu Uematsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Motokazu Uematsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Deputy General Manager \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -4- \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_6}{\*\bkmkend doc_1_6} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Recording Requested By EXHIBIT 10.29 (e) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and When Recorded, Return to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mayer, Brown & Platt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 350 South Grand Avenue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25th Floor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Los Angeles, California 90071-1563 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Leslie T. Tedrow \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (213) 229-9500 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECOND AMENDMENT TO BUILDING LEASE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECOND AMENDMENT TO BUILDING LEASE (this "Second Amendment") is entered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into as of December 17, 1993 (the "Execution Date"), by and between CIBC INC., a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation ("Lessor"), and AMD INTERNATIONAL SALES & SERVICE, LTD., a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation ("Lessee"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Pursuant to that certain Building Lease, by and between Lessor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee dated as of September 22, 1992 and recorded on September 22, 1992 as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instrument No. 11550954 in the Official Records of the Recorder of Santa Clara \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql County, California, as amended by that certain First Amendment to Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease, dated as of December 22, 1992 and recorded on January 5, 1993, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instrument No. 11720034 in Official Records of the Recorder of Santa Clara \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql County, California (such Building Lease, as so amended, is referred to herein as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the "Original Building Lease"), Lessor leases the Building (defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below) to Lessee and Lessee leases the Building from Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Lessee is in the process of renovating the Building and desires that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor finance a portion of those renovations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Lessor and Lessee desire to amend the Original Building Lease to (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide that all renovations being undertaken to the Building will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constructed for the benefit of Lessor and will be subject to the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions of the Original Building Lease, as amended hereby, (ii) provide the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions upon which Lessor will finance a portion of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renovations, and (iii) incorporate certain other changes and modifications to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Original Building Lease that have been agreed to by Lessor and Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Concurrently herewith, Lessor and Lessee also are amending that certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land Lease between Lessor and Lessee dated \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of September 22, 1992 and recorded on September 22, 1992 as Instrument No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11550953 in the Official Records of the Recorder of Santa Clara County, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, as amended by a certain First Amendment to Land Lease, dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 22, 1992 and recorded on January 5, 1993 in the Official Records of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Recorder of Santa Clara County, California as Document No. 11720033, pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which Lessor leases to Lessee certain land described in Appendix 1 attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW, THEREFORE, in consideration of the foregoing and for other good and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql valuable consideration, the receipt and adequacy of which are hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledged, Lessor and Lessee hereby agree as follows (terms used by not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined herein shall have the meaning provided in the Original Building Lease): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. MODIFICATIONS TO BUILDING LEASE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and Lessee hereby amend the Original Building Lease as follows, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all references in the Original Building Lease to "this Lease" or "the Lease" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall hereafter refer to said Original Building Lease as amended hereby: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Leased Property In Section 1.1., the following is hereby inserted after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "other improvements" in the first line of the indented paragraph: "including, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, the Renovations". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Fixed Term. In Section 1.2, the Expiration Date is hereby changed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 22, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Lessor's Option to Renew. The following Section 1.3 is hereby inserted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after Section 1.2: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3. Lessor's Option to Renew. If Lessee has not delivered to Lessor a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice of Lessee's exercise of the Remarketing Option pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 41.6(A), Lessor may elect to renew the Fixed Term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease for an additional term of eight (8) years ending on the eighth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anniversary date of the Expiration Date by notifying Lessee in writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such renewal at least ninety (90) days, but not more than one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hundred eighty (180) days, prior to the Expiration Date. Such election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be within the absolute and sole discretion of Lessor, and nothing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein shall require Lessor to renew or extend the Fixed Term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease. Lessee acknowledges that Lessor has not made any commitment, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql oral or written, to renew the Lease at the end of the Fixed Term. Any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such renewal shall be on the same terms and conditions provided for in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Lease, or at the option of Lessor at the then prevailing rates. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event Lessor elects to extend the Fixed Term as provided for above, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor shall also be required to extend the term of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -2- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Land Lease for the same period. In connection with any such renewal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor agrees to restate its Guaranty, in form and substance mutually \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to Lessor and to Guarantor, guaranteeing the Leases during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such renewal period. Nothing in this provision shall be construed to limit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's existing rights under any of the Operative Agreements between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and Lessee, including Lessee's rights to purchase the Leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property as provided for herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Definitions. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The following definitions are hereby added to Section 2 in proper \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alphabetical sequence: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance: a disbursement hereunder by Lessor for the funding of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations or any portion thereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Architect: Hellmuth, Obata & Kassabaum, Inc., a California \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Architect's Agreement: means the Agreement For Design Services \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Management Edition, dated as of January 13, 1993, between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee and the Architect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due: means as of the date of determination the sum of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor Purchase Price plus the Funded Amount reduced by any Qualified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments to the extent such application is permitted pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql definition of Qualified Payments. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bonds: the meaning specified in Section 21.3(b)(vii). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building: means the Leased Property on the Land as of September 22, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment Fees the meaning specified in Section 21.11. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consent Agreement: means the Construction Consent Agreement dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December 22, 1992, by and between Lessor and Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Documents: means the Architects Agreement, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contractors Agreement, the Consent Agreement, the Plans and Specifications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all soil reports and analyses. The Construction Documents shall also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include all modifications and additions to the foregoing approved in writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -3- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Schedule: shall mean the deadlines for completion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction and the various construction milestones as provided for in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contractor: DPR Construction, Inc., a California corporation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contractors Agreement: means the Agreement dated as of November 19, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992, between Guarantor and the Contractor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Draw Request: the meaning specified in Section 21.4(a)(i). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Execution Date: the meaning set forth in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Amount: means as of any date of determination the cumulative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate sum of all Advances made in respect of the Renovations to date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funding Termination Date: means March 23, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender: means Long-Term Credit Bank of Japan, Ltd., Los Angeles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agency, and any other entity which provides financing to Lessor to fund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligations hereunder or to refinance its interests in this Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letter Agreement: the meaning specified in Section 21.11. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBOR Office: means Lessor's office at 275 Battery Street, Suite 1840, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql San Francisco, California, or such other office of Lessor as designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time by notice from Lessor to Lessee, whether or not outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States, which shall be making or maintaining a loan with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference to LIBO Rates. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maximum Advance Amount: means an amount equal to Twelve Million Five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hundred Thousand Dollars ($12,500,000.00). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option Termination Date: the meaning specified in Section 41.1(b). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plans and Specifications: means all of those certain plans and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications, dated July 28, 1993, issued by the Architect with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Renovations, including (i) the portions thereof prepared by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sasco/Valley Electric covering electrical systems, and (ii) the portions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof prepared by The Linford Company covering mechanical systems. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -4- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preconstruction Value: the meaning specified in Section 21.3(b). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualified Payments: means all payments received by Lessor from time to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time during the term of this Lease from any party (1) under any casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance policy as a result of damage to the Leased Property or the Land, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) as compensation for any restriction placed upon the use or development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Leased Property or the Land or for the condemnation of the Leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property or the Land or any portion of either thereof, (3) because of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final judgment, decree or award for injury or damage to the Leased Property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the Land, or as a result of any settlement, agreed to by Lessor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee in writing, of any claim by Lessor for injury or damage to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leased Property or the Land, or (4) under any title insurance policy or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise as a result of any title defect or claimed title defect with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Leased Property or the Land, but only to the extent that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such payment compensates Lessor for such title defect (excluding, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql example, reimbursement of legal fees or other defense costs); provided, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that (x) in determining "Qualified Payments", there shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deducted all expenses and costs of every kind, type and nature (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Taxes and attorneys' fees) incurred by Lessor with respect to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collection of such payments or the defense or prosecution of any claims, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (y) "Qualified Payments" shall not include any payment to Lessor by Lender \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or a participant or Affiliate of or lender to Lessor that is made to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensate Lessor for Lender's or such the participant's or Affiliate's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql share of any costs, expenses, liabilities or losses which Lessor may incur \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a result of any of the events described in the preceding clauses (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through (4) and (z) "Qualified Payments" shall not include any payments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by Lessor that Lessor has paid to Lessee or any other person for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the restoration or repair of the Leased Property or the Land or that Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is holding as escrowed proceeds (pursuant Section 47). For purposes of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computing the total Qualified Payments paid to or received by Lessor as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any date, payments described in the preceding clauses (1) through (4) will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be considered as escrowed proceeds (pursuant to Section 47), not Qualified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments, until they are actually applied as Qualified Payments by Lessor, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which will generally not occur until the first Installment Date which is at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least three (3) Business Days after Lessor's receipt of the same; and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided further, that all insurance proceeds in connection with any damage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Leased Property or the Land as provided for in Section 19 hereof (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 19 of the Land Lease) or condemnation proceeds relating to a Taking \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided in Section 20 hereof (or Section 20 of the Land Lease) shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain escrowed proceeds (pursuant to Section 47 hereof or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -5- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Land Lease, as the case may be) and shall not be payable to Lessee nor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduce the Balance Due until and except as specifically provided for in Sections \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 and 20. All Qualified Payments received by Lessor in connection with either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Leased Property or the Land shall be first applied to reduce the Balance Due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder; any Qualified Payments received by Lessor which are in excess of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due hereunder shall be applied to reduce the "Balance Due" (as defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Land Lease) pursuant to the Land Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations Budget: the construction budget attached as Exhibit A to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations: means all of the changes, modifications and improvements to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made to the Building (whether or not funded by Lessor) as described in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plans and Specifications. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Company: Lawyers Title Insurance Corporation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Policy: the meaning specified in Section 21.4(a)(vi). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The following definition is hereby deleted: AT&T Occupancy Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) In the definition of Business Day, the following is hereby inserted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately after "San Francisco, California" in the third line of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql definition: ", Los Angeles, California". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The term "Casualty Termination Price" is hereby changed to "Casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value Payment". All references in the Original Building Lease to "Casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination Price" are hereby changed to "Casualty Value Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The definition of Guaranty is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty: that certain Amended and Restated Guaranty, dated as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date hereof, made by Guarantor in favor of Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The definition of Land Lease is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land Lease: means that certain Land Lease between Lessor and Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of September 22, 1992 and recorded as Instrument No. 11550953 in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Official Records of the Recorder of Santa Clara County, California, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended by that certain First Amendment to Land Lease, dated \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -6- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of December 22, 1992 and recorded on January 5, 1993 in the Official \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Records of the Recorder of Santa Clara County, California as Document No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11720034, and as further amended by a certain Second Amendment to Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease, dated as of the date hereof, and recorded on __________, 1993 in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Official Records of the Recorder of Santa Clara County, California as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Document No. _____. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) In the definition of Legal Requirement, (i) the following is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted immediately after the phrase "whether foreseen or unforeseen and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether ordinary or extraordinary": "(including, without limitation, any zoning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or building laws or ordinances, any noise abatement, occupancy, or environmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protection laws or regulations, or any rules, regulations or orders of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental agency), or any building permit or any condition, privilege, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license, easement, right-of-way, covenant, restriction or grant (whether or not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of record)", and (ii) the following is hereby added in clause (b) immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the phrase "foregoing impose obligations on": "Lessor, or". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) In the definition of Lessee's Equipment, (i) the following is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted immediately after the phrase "installed at the Leased Property by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee or any sublessee or assignee of Lessee, at its cost": "and not purchased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with funds advanced by Lessor", and (ii) the following is hereby inserted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately after "removal systems" and preceding the closing parenthesis: ", \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of which shall not constitute Lessee's Equipment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) The definition of Lessor Purchase Price is hereby deleted and replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor Purchase Price: an amount of $14,453,416.14, paid by Lessor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquire the Building. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) The definition of LIBO Rate is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rate: means with respect to any Quarterly Period, an interest rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql per annum equal at all times during such Quarterly Period to the rate of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at which deposits (in an amount equal to the Balance Due as of the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day of any Quarterly Period) in United States dollars in immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available funds are offered or are available to Lessor's LIBOR Office in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the eurodollar interbank market at 10:00 a.m. (Pacific Standard Time) two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Days before the first day of such Quarterly Period for a three (3) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month period; provided, however, that if Lessee shall notify Lessor not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than four (4) Business Days prior to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -7- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first day of any Quarterly Period (except the second Quarterly Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which a six (6) month LIBO Rate is already in effect, and except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provided below) that Lessee desires that the LIBO Rate for such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period and the succeeding Quarterly Period be based on a six (6) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month period, then the LIBO Rate with respect to such two (2) Quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Periods shall be an interest rate per annum (rounded upwards, if necessary, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the next 1/16 of 1%) equal at all times during such two (2) Quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Periods to the rate of interest at which deposits (in an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Balance Due as of the first day of the first of such two (2) Quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Periods) in United States dollars in immediately available funds are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offered or are available to Lessor's LIBOR Office in the Eurobank interbank \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market at 10:00 a.m. (Pacific Standard Time) two (2) Business Days before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first day of the first of such two (2) Quarterly Periods for such six \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) month period. Lessee may not elect a six (6) month LIBO Rate with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to any Quarterly Period expiring during the period beginning on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date hereof and ending on the first Installment Date after the earlier of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the Funding Termination Date, and (ii) the earliest date on which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funded Amount equals the Maximum Advance Amount. If Lessor is unable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determine the LIBO Rate at any time, or Lessor shall determine that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql introduction of any change in or in the interpretation of any law makes it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unlawful, or any central bank or other governmental authority asserts that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it is unlawful for Lessor to calculate rent based on the LIBO Rate, then \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the LIBO Rate for the applicable Quarterly Period shall be the Corporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Base Rate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) The definition of LIBO Rent is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rent: as of an Installment Date means: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) with respect to the period beginning December 2, 1993 and ending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 21, 1993 (such period being a portion of the Quarterly Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on September 22, 1993 and ending on December 21, 1993), an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to $33,373.34; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) with respect to each Quarterly Period commencing after the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, the quotient of (1) the product of (i) the Balance Due as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning of the Quarterly Period in which such Installment Date falls \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (such Balance Due shall include the amount of any Advance made on the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day of such Quarterly Period), multiplied by (ii) the sum of 1% plus the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate obtained by dividing the LIBO Rate by a percentage equal to 100% minus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the LIBO Reserve Percentage, multiplied by (iii) the number of actual days \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -8- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elapsed (including such Installment Date) in the Quarterly Period that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql includes such Installment Date, divided by (2) 360. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used herein, "LIBO Reserve Percentage" means the maximum reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage applicable to Lessor for such Quarterly Period (or if more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one such percentage is applicable during such period, the daily average of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such percentages for those days in such period during which each such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage is applicable) under applicable law, including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, regulations issued from time to time by the Federal Reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board, for determining the maximum reserve requirement (including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, any emergency, supplemental or other marginal reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement) with respect to liabilities or assets consisting of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including (x) eurocurrency liabilities in the amount of the above \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referenced portion of the Balance Due and having a maturity substantially \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same as such Quarterly Period and (y) any other category of liabilities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which includes deposits by reference to which the LIBO Rate is to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined. Lessor shall submit a certificate to Lessee which shall set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in reasonable detail the basis for, calculation of and the amount of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rent, which certificate shall be conclusive and binding for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes, absent manifest error. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) The definition of Operative Agreements is hereby deleted and replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operative Agreements: (i) this Lease, (ii) the Land Lease, (iii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty, (iv) that certain Purchase and Sale Agreement, dated as of April \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15, 1992, between American Telephone and Telegraph Company, as seller, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor, as buyer, as amended by that certain First Amendment to Purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Sale Agreement dated as of August 10, 1992, and as further amended by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that certain Second Amendment to Purchase and Sale Agreement dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 17, 1992, (v) that certain Restated Hazardous Materials \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Undertaking and Unsecured Indemnity, dated of even date herewith, by Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Guarantor in favor of Lessor, (vi) that certain Assignment of Purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Sale Agreement dated as of September 21, 1992, made by Guarantor in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql favor of Lessor, (vii) that certain agreement, dated as of September 21, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992, between American Telephone and Telegraph Company and Lessee, (viii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that certain Consent to Assignment of Purchase and Sale Agreement, dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of September 21, 1992, made by American Telephone and Telegraph Company in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql favor of Lessor and Guarantor, (ix) the Consent Agreement, (x) the Letter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, and (xi) any and all other documents executed by Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor or any Affiliate of either thereof in connection with any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -9- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) The term "Taking Termination Price" is hereby changed to "Taking Value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment." All references in the Original Building Lease to "Taking Termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price" are hereby changed to "Taking Value Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. (a) Basic Rent. Section 3.1 is deleted in its entirety and replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following language: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basic Rent. Lessee shall pay to Lessor Basic Rent by no later than 12:00 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Noon (Los Angeles time) on each Installment Date. For purposes of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease, Basic Rent shall mean, as of an Installment Date, an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sum of (i) LIBO Rent plus (ii) Capital Rent. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Additional Rent. In Section 4, (i) the following is hereby inserted at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the end of clause (a), immediately preceding clause (b): "including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, the amounts required to be paid by Lessee to Lessor pursuant to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 21.11 and 41.6.J,", and (ii) the reference to subdivision (b) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------- ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 25.1 in the parenthetical in the second sentence is hereby changed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subdivision (c) of Section 25.1. The following is hereby inserted at the end of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "On April 22, 1994, Lessee shall pay (by check or other method of payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceptable to Lessor and Lessee) to Lessor an amount equal to One Dollar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ($1.00), which amount shall be applied against the Balance Due as of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date. On May 22, 1994, Lessor shall pay (by check or other method of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment acceptable to Lessor and Lessee) to Lessee an amount equal to One \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollar ($1.00), which amount shall be added to the Balance Due as of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date. The payments set forth in this grammatical paragraph of Section 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not in any way affect the calculation of Basic Rent or any other sums \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due under this Lease." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Net Lease; No Counterclaim, Abatement, etc. In Section 5, (i) the word \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "fully" is hereby inserted preceding "net lease" in the first sentence, (ii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase ", including, without limitation, the construction or financing of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations" is hereby inserted at the end of the first sentence after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "thereof", and (iii) the phrase "the construction of the Renovations or" is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby inserted in clause (g) after "interference with". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Condition and Use of Leased Property. In Section 6, the following is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby added immediately at the end of the capitalized text: "LESSEE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACKNOWLEDGES THAT LESSEE IS SOLELY RESPONSIBLE FOR THE DESIGN, DEVELOPMENT AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSTRUCTION OF THE RENOVATIONS AND ANY OTHER ADDITIONS OR MODIFICATIONS TO THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BUILDING." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -10- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Alterations. In Section 8, (i) the following is hereby inserted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately preceding clause (a) in the first grammatical paragraph: "(except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as otherwise contemplated pursuant to Section 21)", (ii) the phrase "(except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the Renovations)" is hereby inserted in the fifth line of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql second grammatical paragraph after the phrase "performance bond", and (iii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following is hereby inserted at the end of such section: "Notwithstanding the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing, nothing in this Section 8 shall reduce or otherwise relieve Lessee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its obligations and duties regarding the construction of the Renovations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided for at Section 21." \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Indemnification by Lessee. In Section 12, (i) the first sentence is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby revised to begin as follows: "Lessee will (to the fullest extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by law) defend, protect, indemnify and save harmless Lessor, CIBC, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee, any Lender and their respective successors, assigns, participants, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers, employees . . .". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Payment of Taxes, etc. Section 14 is hereby modified as follows: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Clause (a) is hereby deleted and replaced with the following: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Lessee shall hold Lessor harmless against and shall pay, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to delinquency, whether or not payable directly by Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor or subject to withholding at the source: (i) all governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes, assessments, levies, fees, water and sewer rents and charges, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property taxes, licenses, permit fees and all other governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges, general and special, ordinary and extraordinary, foreseen and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unforeseen, and all charges for utility or communications services, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which, at any time prior to or during the term of this Lease, (A) are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposed or levied upon, assessed against or measured by (1) the Leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property or the value thereof, or the revenues, rents, issues, income, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awards, proceeds or profits thereof, (2) any Basic Rent, Additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent or other sum payable hereunder or (3) this Lease or the leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estate hereby created or (B) arise in respect of the occupancy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation, possession, leasing, subleasing, construction, repair, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rebuilding or use of the Leased Property; (ii) all transfer, sales, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recording, value added, use and similar taxes at any time levied, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessed or payable on account of the acquisition, occupancy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation, possession, leasing, subleasing, construction, repair, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rebuilding or use of the Leased Property; (iii) all taxes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assessments, levies, charges, fees, rents or payments in lieu of, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a substitute for, those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -11- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments referred to in clauses (i) and (ii) above or any part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, whether or not expressly so designated; and (iv) all other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes imposed on, with respect to, or in connection with the Operative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements and the transactions contemplated thereby, including any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale of the Leased Property pursuant to Section 41 (all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing being referred to collectively as "Taxes"). The foregoing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of this Section 14(a) are subject to Lessee's rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 17 hereof. If any such Taxes may legally be paid in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments, Lessee may pay such Taxes in the installments due; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that in such event, Lessee shall pay all remaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments (whether or not then due) prior to the expiration of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease or upon termination of this Lease, except if such expiration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurs as a result of Lessee purchasing the Leased Property pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 41 hereof. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In clause (b), item (iii) is hereby deleted, and item (iv) shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ---------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql now become item (iii). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Permitted Contests. In Section 17, insert the following in the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence after the phrase "suppliers or vendors or lien therefor,": "or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims of any other Person affecting the Leased Property or the Land (or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part thereof) or any Lien therefor," \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. Risks To Be Insured. In Section 18.1, (i) the reference in clause (x) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- ------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Lessor Purchase Price is hereby changed to Balance Due, and (ii) in clause \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e), the phrase "the Renovations or" is hereby inserted after "construction of". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Total Destruction. In Section 19.3, all references to the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Casualty Termination Price" are hereby changed to "Casualty Value Payment". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All references to "Lessor Purchase Price" are hereby changed to "Balance Due". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. Application of Insurance Proceeds. In Section 19.4, the reference to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessor Purchase Price" is hereby changed to "Balance Due". In clause (b), the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase "payment of the purchase price" is hereby changed to "payment of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Casualty Value Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. Total Taking. In Section 20.3, all references to "Taking Termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price" are hereby changed to "Taking Value Payment". All references to "Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Price" are hereby changed to "Balance Due". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. Application of Awards. In Section 20.4, the phrase in clause (iii): \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- ------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessor and shall be applied to reduce the Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed to "Lessor as Qualified \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -12- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments and shall be applied to reduce the Balance Due (to the extent so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided under the definition of `Qualified Payments')". In clause (b), the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase "payment of the purchase price" is hereby changed to "the Taking Value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. Renovation of the Building. The following Section 21 is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted as the new Section 21 (replacing "Intentionally Omitted"): \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. Renovation of the Building. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.1. Construction and Funding of the Renovations. The construction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Renovations shall be carried out and constructed in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of the terms and conditions of and shall be constructed and completed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the time periods set forth in the Construction Schedule. In the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event of any conflict between the Consent Agreement and this Lease, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions of this Lease shall control. All of the Renovations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be part of the Leased Property and subject to Lessor's interest as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for in this Lease. Lessor shall reimburse Lessee for costs and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses incurred and paid by Lessee for such construction pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of this Section 21; provided, however, in no event will the total of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- -------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Advances exceed the Maximum Advance Amount. Lessee agrees to fund all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts necessary to complete construction of the Renovations in excess of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Maximum Advance Amount. Lessee acknowledges that Lessor is not under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any obligation to advance any portion of the funds previously advanced by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor pursuant to this Section 21 which are repaid to Lessor by Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by any third party as contemplated herein. Lessor shall not be liable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee for a failure to fund pursuant to this Section 21 to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender, for any reason, does not advance amounts to Lessor pursuant to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loan agreements and other documents entered into between Lessor and Lender, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless Lender's failure to fund is attributable to a failure of Lessor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform its obligations under any such loan agreement or other such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.2. Request for Construction Funding. During the Fixed Term, but not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql later than March 8, 1994, Lessee may request Lessor to provide funding on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first day of the next occurring Quarterly Period for the construction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Renovations. Each such request shall be in writing and presented to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lessor not less than ten (10) Business Days prior to the date specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for funding the Advance. Each request for funding shall be for an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not less than One Million Dollars ($1,000,000). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.3. Conditions Precedent to Initial Funding. The obligation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor to make the initial Advance hereunder \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -13- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for construction of the Renovations shall be subject to the following conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql precedent: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Lessor Approval. Lessor shall have approved the Construction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Documents. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Documents. Lessor shall have received all the following, each duly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed and in form and substance satisfactory to Lessor: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Certified Documents. Copies, certified by Lessee as being true and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correct copies, of the Construction Documents, together with all required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental permits, licenses and approvals; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Assignment of Contracts. Assignments by Lessee of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction Documents and all required governmental permits, licenses and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approvals, all in the form of the respective assignments attached hereto as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule C, together with the consents to assignment (satisfactory to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor) of the Architect and the Contractor; Schedule C is hereby added to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and made a part of the Original Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) Subcontracts. A list, certified by Contractor, of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subcontract and (to the extent not included in such subcontracts) each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase agreement for work or materials; and, if subsequently requested in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing by Lessor, a copy of any such subcontract the cost of which equals \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or exceeds the sum of $200,000; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) Renovations Budget. A copy, certified by Lessee as being a true \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and correct copy, of Lessee's Renovations Budget; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) Insurance. Certificates of insurance evidencing compliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the insurance requirements of this Lease and the Contractors Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vi) Appraisal. A FIRREA appraisal which (a) conforms to and complies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the requirements set forth in Section 43 hereof, (b) sets forth the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appraised value of the Building prior to commencement of the Renovations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Preconstruction Value"), and (c) which demonstrates that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations, upon completion and taken as a whole, will enhance the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Preconstruction Value by an amount not less than one hundred percent (100%) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Maximum Advance Amount; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -14- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) Bonds. If Lessee elects to have the Contractors Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bonded, then there shall also be furnished to Lessor one or more payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and performance bonds (collectively, the "Bonds") covering the Contractors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greement, which Bonds shall name Lessor as a co-obligee under a dual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligee bond and shall expressly permit Lessor direct access to and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recourse against the issuer of the bond. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.4. Conditions Precedent to Each Advance. Lessor's obligation to make \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Advance (including the initial Advance) shall be subject to the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions precedent, all at Lessee's expense: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Documents. Lessor shall have received all of the following, in form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and substance reasonably acceptable to Lessor, at least 10 Business Days prior \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the requested disbursement date: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Draw Request. A written request from Lessee or its agent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requesting the Advance, which request shall be in the form attached hereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as Schedule D (a "Draw Request"); Schedule D is hereby added to and made a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part of the Original Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Architect's Certification; Architect's Certificate for Payment. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written certification from the Architect in the form attached hereto as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule E; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Together with a certified copy of the certificate for payment required to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be delivered to Lessor by the Architect pursuant to the Contractors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement; Schedule E attached hereto is hereby added to and made a part of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Original Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) Contractor's Certification; Contractor's Application for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment. A written certification from the Contractor in the form of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule F attached hereto, together with a certified copy of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Contractor's Application for Payment required to be delivered to Lessor by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Contractor pursuant to the Contractor's Agreement; Schedule F attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto is hereby added to and made a part of the Original Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) Electrical Certification; Mechanical Certification. Written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certification from Sasco Valley Electric in the form of Schedule G attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto, and written certification from The Linford Company in the form of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule H attached hereto; Schedules G and H \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- - \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -15- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached hereto are hereby added to and made a part of the Original \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) Lien Waivers. Unconditional waivers and releases of mechanics' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liens for all work previously performed on the Land from (1) the Contractor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (2) subcontractors and material suppliers on whose behalf funds are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sought for payment or have theretofore been disbursed, all of which waivers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall comply with the mechanics' lien law of the State of California and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall conform with the requirements of the Title Company; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vi) Title Policy/Endorsement. (a) With respect to the first Advance, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an ALTA Owner's Title Policy (the "Title Policy") insuring Lessor in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of $40,000,000.00 in substantially the same form as that certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ALTA Owner's Policy No. 113-00-470-120 issued by the Title Company to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor dated September 22, 1992 (and including the endorsements issued \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereon, substituting, however, CLTA Form 123.1 in place of CLTA 123.2) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insuring, as of the date of the first Advance, Lessor's ownership interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Land and Leased Property, subject only to Permitted Exceptions (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Title Policy"); and (b) with respect to each Advance except the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance, an endorsement or endorsements to the Title Policy to cover such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance (i.e., increasing the policy amount and insuring against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intervening matters since the date of the last such endorsement), which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql endorsement or endorsements shall show no encumbrances other than Permitted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exceptions; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) Progress Reports. Written statements from the Contractor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee setting forth and describing the progress of construction, the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when it is anticipated that construction will be completed, and the causes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of delays or problems which could reasonably be expected to delay or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevent completion of the Renovations; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (viii) Change Orders. All change order information since the later of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql June 30, 1993 or the date of the last Advance (to the extent not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore submitted to Lessor pursuant to Section 21.6(a), which change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orders shall be made in accordance with Section 21.6(a). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Financial Condition and Defaults. No material adverse change in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial condition or operations of Guarantor and its subsidiaries shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred at any \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -16- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time or times subsequent to the financial statements described at Section 3.1.5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Guaranty, and Lessee shall not have received a written notice of Default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which remains uncured and no Event of Default shall exist. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.5. Additional Obligations of Lessee. On the first day of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period which commences during the period beginning as of the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof and ending on June 30, 1994, Lessee shall, unless an Advance is made on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such date, provide to Lessor the information, documents and certificates \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required pursuant to Section 21.4(a), items (ii), (iii), (iv), (v), (vi)(b), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- ----------- ----- ---- --- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) and (to the extent not theretofore submitted to Lessor pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 21.6(a)) (viii). During the period beginning on the date of the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --------------- ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance and ending on June 30, 1994, provided that Lessee shall have fulfilled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligations and shall be in compliance with its requirements under Sections \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.3(b) and 21.4(a) hereof, Lessor will not request from Lessee, and Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------- ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be required to furnish to Lessor, (i) copies of lien waivers pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 3.2.2 of the Consent Agreement; (ii) later date title endorsements to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor's Owner's title policy pursuant to Section 3.2.1 of the Consent Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other than such later date endorsement upon final completion of the Alterations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to such Section 3.2.1 of the Consent Agreement; (iii) copies of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permits, licenses or approvals pursuant to Section 4.1(C) of the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to the extent that Lessee has delivered to Lessor a copy thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.6. Additional Provisions Regarding Construction. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Changes to Plans and Specifications. Copies of all changes to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plans and Specifications, the Renovations Budget and the Construction Schedule \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must be promptly submitted to Lessor. All such changes must be first approved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessor, except for those changes which: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Do not increase or decrease the aggregate cost of the Renovations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as set forth in the original Renovations Budget described in Section 1 by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more than Five Hundred Thousand Dollars ($500,000) for any single change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and which, when aggregated with all change orders made on or subsequent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date hereof, do not exceed Two Million Dollars ($2,000,000) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (aggregating all increases and decreases, and not netting decreases against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increases); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Do not conflict with, or cause the Plans and Specifications to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conflict with, and will not cause the Renovations (then or upon completion) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to fail to comply \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -17- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with, any applicable law, regulation, permit, license or approval relating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the ownership, construction, use or occupancy of the Renovations, or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenant, condition or restriction affecting the Leased Property or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) Do not and will not result in a reduction in the Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value of the Leased Property. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Lessor Advances. If (1) an uncured Default or Event of Default exists \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any time, and (2) any of the following conditions exists: (i) Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably believes that the Construction Schedule has been breached, (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor reasonably believes that completion of construction of the Renovations is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not being diligently pursued pursuant to Section 21.9, or (iii) Section 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof is being violated, then Lessor may at its option (but shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligated to) make Advances, even though Lessee has failed or refused to make a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Draw Request, and whether or not any conditions to such Advance shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfied and regardless of whether such Advance is made on the first day of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period, if Lessor deems it advisable to do so, including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, for the purpose of paying or reimbursing Lessor for any amounts owed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessee hereunder or under the Land Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No Waivers. The disbursement by Lessor of any Advance hereunder (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without requiring fulfillment of any one or more of the conditions to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance provided for in this Lease shall not be deemed a waiver of any condition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth herein with respect to any subsequent Advance and (ii) shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed an approval or acceptance by Lessor of the work theretofore done as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having been completed in accordance with the Construction Documents. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Stored Materials. Notwithstanding any other provision to the contrary, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor shall not be required to make any disbursement for materials unless such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials are incorporated into Renovations or are on the Land at the time of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such disbursement; Lessee hereby covenants that any materials on the Land but \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not yet incorporated into the Renovations shall not be removed from the Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without Lessor's prior written consent. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Permits. Lessee will, promptly upon written request, deliver to Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copies, certified by Lessee as being true and correct copies, of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental permits, licenses and approvals required for the construction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Renovations, including, but not limited to, building permits and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql environmental approvals. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -18- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.7. Use of Funds. The proceeds of each Advance may be used only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the uses specified in the corresponding Draw Request and only in respect of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Renovations in respect of which such Advance is made. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.8. Progress of Construction. Lessee shall diligently pursue the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction and completion of the Renovations. Construction of all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations shall be subject to the time requirements and deadlines provided for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Consent Agreement. Any failure to adhere to the time deadlines and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules set forth in the Consent Agreement shall constitute, at Lessor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election, an Event of Default. Lessee shall deliver to Lessor prior to the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction must be completed under the Consent Agreement, each of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following items in form and substance reasonably acceptable to Lessor, all at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's expense: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Lien Waivers. Final unconditional lien waivers and releases from (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Contractor and (ii) all subcontractors and materials suppliers in respect of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Renovations; and a final sworn statement from the Contractor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Architect's Completion Certificate. A certificate from the Architect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifying that construction has been substantially completed in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Construction Documents and has been completed in accordance with all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable laws and regulations and all applicable governmental permits, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses and approvals, and will also comply with the requirements of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants, conditions, and restrictions affecting the improved Parcel and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certifying that attached thereto are true, correct and complete copies of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or appropriate governmental permits, licenses and approvals for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ownership, use and occupancy of the Leased Property (including a Certificate of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Occupancy), all of which have been issued, are unconditional and are in full \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql force and effect, unmodified. Lessee shall furnish Lessor with an original (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy certified by Architect) of the Architect's Certificate of Substantial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Completion which the Architect is required to issue pursuant to the Contractor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. The requirement under Section 3.2.3(i) of the Consent Agreement that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee deliver to Lessor an Architect's certificate shall be deemed satisfied by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of the certificates required under this clause (b). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Final Plan. A copy, certified by Lessee or the Architect as being a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql true and correct copy, of the final Plans and Specifications containing all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql field changes thereto made by the Contractor in the course of constructing the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations. The delivery of such certified final Plans \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -19- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Specifications shall also satisfy the requirements under clause (iii) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2.3 of the Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Permanent Occupancy. A copy, certified by Lessee as being a true and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql correct copy, of the final Certificate of Occupancy, together with all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql government certificates that Lessor may reasonably require from applicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental authorities, evidencing compliance with all zoning, building, fire, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql health, environmental and other applicable laws, rules and regulations, together \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with evidence, satisfactory to Lessor, that there are no additions, actions or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings pending or threatened to alter or declare invalid any of those laws, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ordinances, rules, regulations or permits or certificates for or relating to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations, to the Land, or any part thereof. Fulfillment of the requirements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this clause (d) shall also fulfill the requirements under clause (ii) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2.3 of the Consent Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.9. Remedying Construction Defects. Lessee will promptly remedy, in a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner reasonably satisfactory to Lessor, all such parts or aspects of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction as Lessor may reasonably determine are not in compliance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plans and Specifications. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.10. Legal Requirements; Insurance Requirements. Lessee shall cause \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Renovations and the construction thereof to be in compliance with all Legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements, the Construction Documents, any restrictions of record and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Insurance Requirements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.11. Commitment Fees. On the Execution Date, Lessee shall pay to Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a facility fee in the amount of One Hundred Thousand Dollars ($100,000). In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, Lessee shall pay to Lessor a commitment fee (the "Commitment Fee") for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the period from and including December 22, 1993 to and excluding the Funding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination Date, equal to the average of the daily unused portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maximum Advance Amount multiplied by 0.375% per annum. The Commitment Fee will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be calculated on the basis of a 360-day year, and the actual number of days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elapsed to be payable in arrears on each Installment Date, commencing on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first such date to occur after the Execution Date, and at maturity. Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall pay to Lender the above described facility fee and Lender's share of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commitment Fee as required in the loan documents entered into between Lessor and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender. Nothing herein shall relieve Lessee and Guarantor from their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations to pay to Lessor any amounts which become due and owing pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that certain letter agreement (the "Letter Agreement)" by and among Lessee, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor, Lessor and CIBC Leasing Inc., dated July 23, 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -20- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. Right of Lessor to Perform Lessee's Covenants, Etc. In Section 23, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following is inserted immediately after the phrase "perform any act" in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first sentence: "(including without limitation completion of the Renovations)." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19. Assignments, Subleases, Etc. by Lessee. In Section 24.1, the second \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence shall end "operation of law or otherwise"; and the remainder of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence is hereby deleted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. Events of Default. In Section 25.1, the following provisions are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby modified: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) in clause (a), the phrase ", the Commitment Fees or amounts due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and owing under the Letter Agreement" is hereby inserted after "Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent"; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) clause (b) is hereby deleted and replaced with the following: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessee shall fail to pay any amounts required to be paid pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 19.3, 20.3 or 41 on the date the same becomes due and payable; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ---- ---- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or"; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) the following clauses are hereby added after the text of clause \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) but preceding the period: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (p) any Event of Default (as that term is defined in the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement) shall occur under the Consent Agreement; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (q) a breach or Default by Lessee of its obligations described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 21.5, 21.6(a), 21.6(d), 21.7, 21.8 or 21.9 shall occur. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- ------- ------- ---- ---- ---- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. Trustee; Power of Sale. In Section 26, all references to "Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Price" are hereby changed to "Balance Due." The reference to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Continental Lawyers Title Company" in Section 26 is hereby changed to "Lawyers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Insurance Company." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22. Further Assurance for Lessee's Obligations. All references in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------ ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27 to the "Lessor Purchase Price" are hereby changed to the "Balance Due". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. Lender Costs. Section 28 is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "28. Lender Costs. Lessee hereby agrees to pay to Lender on Lessor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf all amounts described in Section 14 and Section 15 of that certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan Agreement, dated as of December 17, 1993, between Lessor and Lender \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Loan Agreement"). All such amounts shall be paid by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -21- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee at the time, in the manner and as provided in the Loan Agreement or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as directed by Lender." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. End of Lease Term. In Section 37, the phrase "and subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations of Lessee as provided for at Section 41" is hereby inserted after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "termination of this Lease" in the first sentence. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25. Purchase and Remarketing of Leased Property. In Section 41, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase "payment of the Balance Due and the" is hereby inserted immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding the phrase "purchase and sale". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26. Lessee's Option to Purchase. Section 41.1(a) is hereby deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.1 Lessee's Option to Purchase. (a) Subject to the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and provisions set forth in this Section 41.1, Lessee shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option (the "Purchase Option"), to be exercised as set forth below at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time on or before the Option Termination Date (as hereinafter defined), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to purchase from Lessor at any time during the Fixed Term Lessor's interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Leased Property. Such option must be exercised by written notice to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor, which exercise shall be irrevocable; and such exercise notice will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specify the closing date, which must occur on an Installment Date, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's purchase of the Leased Property, which date shall not be more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sixty (60) days following Lessor's receipt of such notice but in no event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql later than the Expiration Date, and the closing of the conveyance of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leased Property shall occur on such date. In such event, subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions set forth in this Section 41, on such closing date, Lessor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convey to Lessee, and Lessee shall purchase from Lessor, Lessor's interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Leased Property. The purchase price to be paid by Lessee for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leased Property shall be an amount equal to the Balance Due as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql closing date of Lessee's purchase of the Leased Property. As a condition to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor's obligations hereunder, Lessee shall also pay to Lessor all Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent, Additional Rent and other amounts that may have accrued as of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27. Purchase. Section 41.2 is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.2 Expiration Date Obligation to Pay and Purchase. Unless Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have exercised the Purchase Option, then, subject to the terms, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and provisions set forth in this Section 41, Lessee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to purchase all of Lessor's interest in the Leased Property and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay to Lessor the Balance Due as of the Expiration Date \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -22- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql along with all accrued Basic Rent, Additional Rent and other amounts then \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due. Upon receipt of such amount, Lessee shall be deemed to have purchased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from Lessor, and Lessor shall convey to Lessee, on the Expiration Date all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Lessor's interest in the Leased Property. Lessee acknowledges that under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41 of the Land Lease, Lessee shall be obligated to pay the Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due (as defined in the Land Lease) under the Land Lease and purchase the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land simultaneously with the purchase of the Leased Property. Lessee may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designate, in a notice given to Lessor not less than ten (10) days prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the closing of such purchase (time being of the essence), a transferee to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whom the conveyance shall be made (if other than to Lessee), in which case \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such conveyance shall (subject to the terms and conditions set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein) be made to such designee; provided, however, that such designation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a transferee shall not cause Lessee to be released, fully or partially, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from any of its obligations under this Lease, including without limitation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligation to pay the Balance Due on the Expiration Date and all other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued amounts. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28. Acceleration of Purchase Obligation. Section 41.3 is hereby deleted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.3 Acceleration of Expiration Date Obligation. Lessee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligated to purchase Lessor's interest in the Leased Property and pay to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor the Balance Due along with all amounts which have accrued and are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due and payable hereunder immediately upon the occurrence of any Event of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Default specified in clauses (k) or (l) of Section 25.1. Further, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- --- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding anything contained herein to the contrary, at any time upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the occurrence and during the continuance of an Event of Default, if Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gives Lessee a notice under Section 25.2(a)(i) terminating Lessee's right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of possession (for purposes of this Section 41 such notice being referred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to as a "Purchase Acceleration Notice"), Lessee shall be obligated to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase Lessor's interest in the Leased Property and to pay to Lessor the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due along with all amounts which have accrued and are payable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder on the date which is ten (10) business days following Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of such Purchase Acceleration Notice. If Lessee's obligations under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 41.3 take place on a date other than an Installment Date, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basic Rent shall be prorated to such date. Lessee acknowledges that its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of a Purchase Acceleration Notice under this Section 41.3 shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also constitute a receipt by Lessee of a Purchase Acceleration Notice under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Land Lease. The Lessor's right to terminate the Purchase Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 41.1 and to accelerate the purchase of the Lessor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in the Leased Property are independent of each other, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding anything in Section 41.1 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -23- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary, unless the Option Termination Date shall have first occurred, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Option shall terminate and be of no further force or effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date that any Purchase Acceleration Notice is given. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If Lessee fails to purchase Lessor's interest in the Leased Property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and pay the Balance Due along with all other amounts as provided for in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding paragraph on the tenth (10th) Business Day following Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of the Purchase Acceleration Notice, then, Lessor shall be free to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sell the Leased Property to another Person and upon any such subsequent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale to any other Person by Lessor of Lessor's interest in the Leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property, Lessor shall be entitled to recover from Lessee, and Lessee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon demand pay to Lessor, an amount equal to (i) the Balance Due, plus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the amount of all Basic Rent, Additional Rent and other sums payable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder to and including the date of such demand (including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, Breakage Amounts and all costs and expenses incurred by Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in effectuating its remedies and making such sale or sales), minus (iii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount of all consideration (on a present value basis determined by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application of a discount factor (per annum) equal to five percent (5%) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent such consideration is not cash), received by Lessor in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with such sale. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29. Determination of the Purchase Price. In Section 41.4, (a) such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section shall hereafter be entitled "Breakage"; (b) the first grammatical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph is hereby deleted; (c) the remainder of said Section is hereby deleted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to all other amounts owed to Lessor hereunder, if Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the Balance Due and purchase of Lessor's interest in the Leased \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Property occurs on a date other than the LIBO Last Day (defined below), and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the LIBO Rate for the three (3) month period commencing on the date on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Balance Due is paid is less than the LIBO Rate in effect during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Quarterly Period in which such payment occurs, then Lessee shall pay to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor on such date as an additional component of the Balance Due, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Breakage Amount (defined below). If Lessee's payment of the Balance Due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurs when a six (6) month LIBO Rate is in effect and on a date other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the second Installment Date of such period, the Breakage Amount shall be an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the present value of the difference between (A) the portion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Basic Rent payments for the two (2) Quarterly Periods for which such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six (6) month LIBO Rate applies (prorated for the number of days in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period beginning on the date of such purchase and ending on the second \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Installment Date occurring in such six (6) month period with \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -24- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to which such six (6) month LIBO Rate applies), and (B) an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to what the portion of the Basic Rent for such two Quarterly Periods \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (prorated for the number of days in the period beginning on the date on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such purchase occurs and ending on the second Installment Date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurring in such six (6) month period with respect to which such six (6) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month LIBO Rate applies) would have been had the Basic Rent for such two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Quarterly Periods been calculated using the three (3) month LIBO Rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in effect on the date of such purchase. If Lessee's payment of the Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due occurs when a three (3) month LIBO Rate is in effect on other than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql last day of a Quarterly Period, the Breakage Amount shall be an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the present value of the difference between (A) the portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basic Rent payment for such Quarterly Period in which such purchase occurs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (prorated for the number of days during the period beginning on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such purchase and ending on Installment Date at the end of such Quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period) and (B) an amount equal to what the portion of the Basic Rent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment for such Quarterly Period (prorated for the number of days in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period beginning on the date of such purchase and ending on the Installment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date at the end of such Quarterly period) would have been had the Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent for such Quarterly Period been calculated using a three (3) month LIBO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate in effect on the date of such purchase. In either case, such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql difference shall be discounted at a rate of 5% per annum. If any statute or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rule of law shall validly limit the amount due under this Section 41.4 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than the amount above agreed upon, Lessor or Assignee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the maximum amount allowable under such statute or rule of law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 30. Purchase Procedure. In Section 41.5, (a) the phrase "purchase price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor" in the first paragraph is hereby deleted and replaced with "Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due (and all other amounts due and owing hereunder)"; (b) the second grammatical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph, the first sentence shall begin as follows: "If Lessee shall purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor's interest in the Leased Property pursuant to Section 41.1(b) or if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's obligation to pay the Balance Due and purchase the Leased Property is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerated pursuant to Section 41.3, Lessee shall deliver the Balance Due to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor together with ..."; and (c) the following is hereby inserted at the end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the parenthetical in the penultimate sentence in such second grammatical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph: "and pay to Lessor the Balance Due along with all other amounts due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and owing hereunder". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31. Option to Remarket. The second grammatical paragraph of Section 41.6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby deleted and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -25- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's effective exercise and consummation of the Remarketing Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be subject to the due and timely fulfillment of each of the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions, the failure of any of which shall render the Remarketing Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Lessee's exercise thereof null and void, in which event, Lessee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be obligated on the Expiration Date to pay to Lessor the Balance Due (and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other accrued amounts) and perform its obligations under Section 41.2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and if the Expiration Date shall have occurred, this Lease shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatically be deemed extended until five (5) Business Days after such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date and the purchase by Lessee under Section 41.2 and payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Balance Due and all other amounts due and owing hereunder shall (and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other accrued amounts) be consummated on the fifth such Business Day. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subparagraph I is hereby deleted and replaced with the following: "The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations shall have been completed in accordance with the requirements set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth at Section 21, and any Restoration (in the event of a Taking or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql casualty or other damage or destruction) shall be completed prior to Expiration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In subparagraph J, the first reference to "Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleted and replaced with "Balance Due plus all other amounts due and owing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder", and the second reference thereto is hereby replaced with "Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due". The reference in clause (x) in such subparagraph J to $12,763,323.00 is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby deleted and replaced with Twenty-Three Million Eight Hundred Forty-Two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thousand Six Hundred Twenty-Two Dollars ($23,842,622.00). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The reference in subparagraph L to "Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleted and replaced with "Balance Due and all other amounts due and owing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The parenthetical and succeeding phrase "within ten (10) business days" in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subparagraph M is hereby deleted and replaced with the following: "(and Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be obligated to purchase the Leased Property and pay to the Lessor the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due together with all other amounts due and owing hereunder pursuant to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41.2) within five (5) business days". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following sentence is hereby added after the last sentence in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41: "Lessee shall pay to Lessor each amount due pursuant to this Section 41 by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no later than 12:00 Noon (Los Angeles time) on the date such payment is due and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 32. Transaction Expenses. The following subsection is hereby added to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 51 after the end of clause (iv) thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ---------- ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -26- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but prior to the period (and the word "and" at the end of clause (iii) thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby deleted): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) The out-of-pocket expenses incurred by Lender in connection with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the negotiation, preparation, execution, delivery and perfection of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loan documents entered into between Lender and Lessor pursuant to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor finances a portion of its obligations hereunder or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinances its interest in this Lease, including, without limitation, all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable fees and disbursements of counsel to Lender." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33. The following Sections are hereby inserted after Section 51 (and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent Sections are hereby renumbered accordingly). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 52. Additional Waivers. IN CONNECTION WITH THE TRANSACTIONS PROVIDED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR HEREIN AND AS FURTHER CONSIDERATION FOR LESSOR AGREEING TO ENTER INTO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECOND AMENDMENT, LESSEE WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY ONE OR MORE OF CALIFORNIA CIVIL CODE (S)(S) 1951.2, 2808, 2809, 2810, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849 AND 2850, TO THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE (S)(S) 580A, 580B, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 580C, 580D AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF PART IV, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TITLE 14, OF THE CALIFORNIA CIVIL CODE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 53. Lessee Further Acknowledgments. Lessee has been represented by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal and tax counsel, independent accountants and other professionals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of which has been personally selected by Lessee, as Lessee has found \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to consult concerning the consummation of the transactions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in this Lease and the other Operative Agreements, and such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation has included an examination and analysis of Lessee's rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and obligations and the basis of all accounting, tax, financial and legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aspects and treatment under this Lease and the other Operative Agreements. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to the accounting, tax, financial and legal consequences of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the transactions contemplated herein and in the Operative Agreements, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee is relying solely upon the advice of its own tax, accounting and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal advisors and upon its knowledge with respect thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 54. Certain Tax Matters. Without limiting the acknowledgements made by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee at Section 53, Lessor and Lessee agree that, in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their intentions and the substance of the transactions contemplated hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -27- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent permitted by law, Lessee (and not Lessor) shall be treated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the owner of the Leased Property for Federal, state, and local income tax \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes. Lessee shall be entitled to take any deduction, credit allowance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other reporting, filing or other tax position consistent with such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql characterizations. Lessor shall not file any Federal, state or local income \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tax returns, reports or other statements in a manner which is inconsistent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the foregoing provisions of this Section 54. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 55. Attorneys' Fees and Legal Expenses. If either party commences any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal action or other proceeding to enforce any of the terms of this Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any of the Operative Documents to which Lessor and Lessee are a party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or because of any breach by the other party or dispute hereunder or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder, the successful or prevailing party shall be entitled to recover \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the nonprevailing party all reasonable attorneys' fees and costs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred in connection therewith, whether or not such controversy, claim or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute is prosecuted to a final judgment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. AFFIRMATION OF STATUS OF ORIGINAL BUILDING LEASE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as amended by this Second Amendment, the Original Building Lease is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unchanged; and, as amended by this Second Amendment, the Original Building Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remains in full force and effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -28- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, all parties hereto have caused this Second Amendment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be duly executed as of the date first set forth above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LESSOR: CIBC INC., a Delaware corporation \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Vice President \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql _______________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LESSEE: AMD INTERNATIONAL SALES & SERVICE, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LTD., a Delaware corporation \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Marvin D.Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Sr. VP. CFO and Treasurer \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACKNOWLEDGEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF CALIFORNIA ) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ) ss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF SAN FRANCISCO ) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 17, 1993, before me, Rhonda Allerhand, personally appeared Tom \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R. Wagner, personally known to me (or proved to me on the basis of satisfactory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidence) to be the person whose name is subscribed to the within instrument and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledged to me that he executed the same in his authorized capacity, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that by his signature on the instrument the person, or the entity upon behalf of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the person acted, executed the instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITNESS my hand and official seal. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature: /s/ Rhoda Allerhand \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Seal) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF CALIFORNIA ) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ) ss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF SANTA CLARA ) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 17, 1993, before me, Janis V. Cahill, personally appeared \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin Burkett, personally known to me (or proved to me on the basis of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory evidence) to be the person whose name is subscribed to the within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument and acknowledged to me that he executed the same in his authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity, and that by his signature on the instrument the person, or the entity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon behalf of which the person acted, executed the instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITNESS my hand and official seal. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature: /s/ Janis V. Cahill \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Seal) \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_7}{\*\bkmkend doc_1_7} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Recording Requested By EXHIBIT 10.29(h) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and When Recorded, Return to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mayer, Brown & Platt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 350 South Grand Avenue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25th Floor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Los Angeles, California 90071-1563 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attention: Leslie T. Tedrow \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (213) 229-9500 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ________________________________________________________________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ________________________________________________________________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECOND AMENDMENT TO LAND LEASE \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECOND AMENDMENT TO LAND LEASE (this "Second Amendment") is entered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into as of December 17, 1993 (the "Execution Date"), by and between CIBC INC., a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation ("Lessor"), and AMD INTERNATIONAL SALES & SERVICE, LTD., a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation ("Lessee"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Pursuant to that certain Land Lease, by and between Lessor and Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of September 22, 1992 and recorded on September 22, 1992 as Instrument \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 11550953 in the Official Records of the Recorder of Santa Clara County, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, as amended by that certain First Amendment to Land Lease, dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December 22, 1992 and recorded on January 5, 1993, as Instrument No. 11720033 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Official Records of the Recorder of Santa Clara County, California (such Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease, as so amended, is referred to herein as the "Original Land Lease"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor leases the Land described in Appendix 1 attached hereto to Lessee and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee leases the Land from Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Lessor and Lessee desire to amend the Original Land Lease to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporate certain other changes and modifications that have been agreed to by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Concurrently herewith, Lessor and Lessee also are amending that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain Building Lease between Lessor and Lessee dated as of September 22, 1992 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and recorded on September 22, 1992 as Instrument No. 11550954 in the Official \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Records of the Recorder of Santa Clara County, California, as amended by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain First Amendment to Building Lease, dated as of December 22, 1992 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recorded on January 5, 1993 in the Official Records of the Recorder of Santa \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clara County, California as Document No. 11720034. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW, THEREFORE, in consideration of the foregoing and for other good and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql valuable consideration, the receipt and adequacy of which are hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledged, Lessor and Lessee hereby agree as follows (terms used by not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined herein shall have the meaning provided in the Original Land Lease): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. MODIFICATIONS TO LAND LEASE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and Lessee hereby amend the Original Land Lease as follows, and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql references in the Original Land Lease to "this Lease" or "the Lease" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter refer to said Original Land Lease as amended hereby: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Fixed Term. In Section 1.2, the Expiration Date is hereby changed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 22, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Lessor's Option to Renew. The following Section 1.3 is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted after Section 1.2: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3. Lessor's Option to Renew. If Lessee has not delivered to Lessor a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice of Lessee's exercise of the Remarketing Option pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41.6(A), Lessor may elect to renew the Fixed Term of this Lease for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an additional term of eight (8) years ending on the eighth anniversary date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Expiration Date by notifying Lessee in writing of such renewal at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least ninety (90) days, but not more than one hundred eighty (180) days, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the Expiration Date. Such election shall be within the absolute \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and sole discretion of Lessor, and nothing herein shall require Lessor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renew or extend the Fixed Term of this Lease. Lessee acknowledges that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor has not made any commitment, oral or written, to renew the Lease at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the end of the Fixed Term. Any such renewal shall be on the same terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions provided for in this Lease, or at the option of Lessor at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then prevailing rates. In the event Lessor elects to extend the Fixed Term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided for above, Lessor shall also be required to extend the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Building Lease for the same period. In connection with any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renewal, Guarantor agrees to restate its Guaranty, in form and substance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutually satisfactory to Lessor and to Guarantor, guaranteeing the Leases \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during such renewal period. Nothing in this provision shall be construed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limit Lessee's existing rights under this Lease, including Lessee's rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to purchase the Land as provided for herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Definitions. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The following definitions are hereby added to Section 2 in proper \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alphabetical sequence: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -2- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due: means as of the date of determination an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $13,046,583.86 reduced by any Qualified Payments to the extent that such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application is permitted pursuant to the definition of Qualified Payments. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consent Agreement: means the Construction Consent Agreement dated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of December 22, 1992, by and between Lessor and Lessee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Execution Date: the meaning specified in the preamble. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lender: means Long-Term Credit Bank of Japan, Ltd., Los Angeles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agency, and any other entity which provides financing to Lessor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql refinance its interests in this Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBOR Office: means Lessor's office at 275 Battery Street, Suite 1840, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql San Francisco, California, or such other office of Lessor as designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time by notice from Lessor to Lessee, whether or not outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States, which shall be making or maintaining a loan with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference to LIBO Rates. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option Termination Date: the meaning specified in Section 41.1(b). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Option: the meaning specified in Section 41.1. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualified Payments: means all payments received by Lessor from time to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time during the term of this Lease from any party (1) under any casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance policy as a result of damage to the Land or the Building, (2) as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensation for any restriction placed upon the use or development of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land or the Building or for the condemnation of the Land or the Building or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any portion of either thereof, (3) because of any final judgment, decree or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award for injury or damage to the Land or the Building, or as a result of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any settlement, agreed to by Lessor and Lessee in writing, of any claim by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor for injury or damage to the Building or the Land, or (4) under any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql title insurance policy or otherwise as a result of any title defect or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claimed title defect with respect to the Land or the Building, but only to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent that such payment compensates Lessor for such title defect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (excluding, for example, reimbursement of legal fees or other defense \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql costs); provided, however, that (x) in determining "Qualified Payments", \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there shall be deducted all expenses and costs of every kind, type and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nature (including Taxes and attorneys' fees) incurred by Lessor with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the collection of such payments or the defense or prosecution of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -3- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any claims, (y) "Qualified Payments" shall not include any payment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor by Lender or a participant or Affiliate of or lender to Lessor that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is made to compensate Lessor for Lender's or such the participant's or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliate's share of any costs, expenses, liabilities or losses which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor may incur as a result of any of the events described in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding Clauses (1) through (4) and (z) "Qualified Payments" shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include any payments received by Lessor that Lessor has paid to Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any other person for the restoration or repair of the Land or the Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or that Lessor is holding as escrowed proceeds pursuant to Section 47. For \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of computing the total Qualified Payments paid to or received by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor as of any date, payments described in the preceding Clauses (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through (4) will be considered as escrowed proceeds pursuant to Section 47, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not Qualified Payments, until they are actually applied as Qualified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments by Lessor, which will generally not occur until the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Installment Date which is at least three (3) Business Days after Lessor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of the same; and provided further, that all insurance proceeds in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with any damage to the Land or the Building as provided for in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 19 hereof (or in Section 19 of the Building Lease) or condemnation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds relating to a Taking as provided in Section 20 hereof (or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 20 of the Building Lease) shall remain escrowed proceeds pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Section 47 hereof or in the Building Lease, as the case may be and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be payable to Lessee nor reduce the Balance Due until and except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically provided for in Sections 19 and 20. All Qualified Payments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by Lessor in connection with either the Land or the Building shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be first applied to reduce the "Balance Due" (as defined in the Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease) under and pursuant to the Building Lease; and Qualified Payments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by Lessor which are in excess of the "Balance Due" (as defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Building Lease) under the Building Lease shall be applied to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Renovations: the meaning specified in the Building Lease. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trustee: the meaning specified in Section 25. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The definition of Building Lease is hereby deleted and replaced with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease: means that certain Building Lease entered into between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor and Lessee on September 22, 1992 and recorded September 22, 1992 in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Official Records of the Recorder of Santa Clara County, California as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Document No. 11550954, as amended by that certain First Amendment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease dated as of December 22, 1992 and recorded \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -4- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 5, 1993 in the Official Records of the Recorder of Santa Clara \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql County, California as Document No. 11720034, and as further amended by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain Second Amendment to Building, dated as of the date hereof, pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which Lessor financed the acquisition of certain improvements on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The following definition is hereby deleted: AT&T Occupancy Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In the definition of Business Day, the following is hereby inserted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately after "San Francisco, California" in the third line of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql definition: ", Los Angeles, California". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The definition of Guaranty is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guaranty: that certain Amended and Restated Guaranty, dated as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date hereof, made by Guarantor in favor of Lessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) In the definition of Legal Requirement, (i) the following is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted immediately after the phrase "whether foreseen or unforeseen and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether ordinary or extraordinary": "(including, without limitation, any zoning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or building laws or ordinances, any noise abatement, occupancy, or environmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protection laws or regulations, or any rules, regulations or orders of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental agency), or any building permit or any condition, privilege, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license, easement, right-of-way, covenant, restriction or grant (whether or not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of record)", and (ii) the following is hereby added in clause (b) immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the phrase "foregoing impose obligations on": "Lessor, or". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) In the definition of Lessee's Equipment, the following is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inserted immediately after the phrase "installed on or at the Land by Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any sublessee or assignee of Lessee, at its cost": "and not purchased with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds advanced by Lessor". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) The definition of Lessor Purchase Price is hereby deleted in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) The definition of Lessor's Review Charge is hereby deleted in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) The definition of LIBO Rate is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rate: means with respect to any Quarterly Period, an interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rate per annum equal at all times during such Quarterly Period to the rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of interest per annum (rounded \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -5- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upwards, if necessary, to the next 1/16 of 1%) at which deposits (in an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the Balance Due as of the first day of any Quarterly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period) in United States dollars in immediately available funds are offered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or are available to Lessor's LIBOR Office in the eurodollar interbank \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market at 10:00 a.m. (Pacific Standard Time) two Business Days before the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first day of such Quarterly Period for a three (3) month period; provided, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that if Lessee shall notify Lessor not less than four (4) Business \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Days prior to the first day of any Quarterly Period (except the second \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period in which a six (6) month LIBO Rate is already in effect) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Lessee desires that the LIBO Rate for such Quarterly Period and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql succeeding Quarterly Period be based on a six (6) month period, then the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rate with respect to such two (2) Quarterly Periods shall be an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest rate per annum (rounded upwards, if necessary, to the next 1/16 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1%) equal at all times during such two (2) Quarterly Periods to the rate of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest at which deposits (in an amount equal to the Balance Due as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first day of the first of such two (2) Quarterly Periods) in United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dollars in immediately available funds are offered or are available to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor's LIBOR Office in the Eurobank interbank market at 10:00 a.m. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Pacific Standard Time) two (2) Business Days before the first day of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first of such two (2) Quarterly Periods for such six (6) month period. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee may not elect a six (6) month LIBO Rate with respect to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period expiring during the period beginning on the date hereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and ending on the first Installment Date after the earlier of (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Funding Termination Date (as that term is defined in the Building Lease), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (ii) the earliest date on which the Funded Amount equals the Maximum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advance Amount (as that term is defined in the Building Lease). If Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is unable to determine the LIBO Rate at any time, or Lessor shall determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the introduction of any change in or in the interpretation of any law \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql makes it unlawful, or any central bank or other governmental authority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql asserts that it is unlawful for Lessor to calculate rent based on the LIBO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate, then the LIBO Rate for the applicable Quarterly Period shall be the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporate Base Rate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) The definition of LIBO Rent is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rent: as of an Installment Date means: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) with respect to the period beginning December 2, 1993 and ending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 21, 1993 (such period being a portion of the Quarterly Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on September 22, 1993 and ending on December 21, 1993), an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to $30,124.92; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -6- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) with respect to each Quarterly Period commencing after the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof, the Balance Due as of such Installment Date multiplied by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest rate per annum equal at all times to the sum of (a) 1% plus (b) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rate obtained by dividing the LIBO Rate (or the Corporate Base Rate if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required pursuant to the terms set forth under the definition of "LIBO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate") by a percentage equal to 100% minus the LIBO Reserve Percentage, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividing the sum thereof by 360 and multiplying the result thereof by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of actual days elapsed (including such Installment Date) in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quarterly Period that includes such Installment Date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used herein, "LIBO Reserve Percentage" means the maximum reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage applicable to Lessor for such Quarterly Period (or if more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one such percentage is applicable during such period, the daily average of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such percentages for those days in such period during which each such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage is applicable) under applicable law, including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, regulations issued from time to time by the Federal Reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board, for determining the maximum reserve requirement (including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, any emergency, supplemental or other marginal reserve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement) with respect to liabilities or assets consisting of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including (x) eurocurrency liabilities in the amount of the above \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referenced portion of the Balance Due and having a maturity substantially \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same as such Quarterly Period and (y) any other category of liabilities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which includes deposits by reference to which the LIBO Rate is to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined. Lessor shall submit a certificate to Lessee which shall set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in reasonable detail the basis for, calculation of and the amount of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Rent, which certificate shall be conclusive and binding for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes, absent manifest error. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) The definition of Operative Agreements is hereby deleted and replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operative Agreements: (i) this Lease, (ii) the Building Lease, (iii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Guaranty, (iv) that certain Purchase and Sale Agreement, dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 15, 1992, between American Telephone and Telegraph Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seller, and Guarantor, as buyer, as amended by that certain First Amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Purchase and Sale Agreement dated as of August 10, 1992, and as further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended by that certain Second Amendment to Purchase and Sale Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of September 17, 1992, (v) that certain Restated Hazardous \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Materials Undertaking and Unsecured Indemnity, dated as of the date hereof, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessee and Guarantor in favor of Lessor, (vi) that certain Assignment of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase and Sale Agreement dated as of September 21, 1992, made by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Guarantor in favor of Lessor, (vii) that certain agreement, dated as of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -7- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 21, 1992, between American Telephone and Telegraph Company and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee, (viii) that certain Consent to Assignment of Purchase and Sale \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, dated as of September 21, 1992, made by American Telephone and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Telegraph Company in favor of Lessor and Guarantor, (ix) the Consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, (x) the Letter Agreement (as defined in the Building Lease), and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (xi) any and all other documents executed by Lessee or Guarantor or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliate of either thereof in connection with any of the foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) The term "Casualty Termination Price" is hereby changed to "Casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value Payment". All references in the Original Land Lease to "Casualty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination Price" are hereby changed to "Casualty Value Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) The term "Taking Termination Price" is hereby changed to "Taking Value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment." All references in the Original Land Lease to "Taking Termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price" are hereby changed to "Taking Value Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) In the definition of Restoration, the phrase "of the Building Lease" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby inserted after "Section 8". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. (a) Basic Rent. Section 3.1 is deleted in its entirety and replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the following language: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basic Rent. Lessee will pay to Lessor Basic Rent by no later than 12:00 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Noon (Los Angeles time) on each Installment Date. For purposes of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease, Basic Rent shall mean, as of an Installment Date, an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sum of (i) LIBO Rent plus (ii) Capital Rent. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Additional Rent. In Section 4, (i) the following is hereby inserted at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the end of clause (a), immediately preceding clause (b): "including, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, the amounts required to be paid by Lessee to Lessor pursuant to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41.6 (J)," and (ii) the reference to subdivision (b) of Section 25.1 in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parenthetical in the second sentence is hereby changed to subdivision (c) of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 25.1. The following is hereby inserted at the end of Section 4: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------ --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "On April 22, 1994, Lessee shall pay (by check or other method of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment acceptable to Lessor and Lessee) to Lessor an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One Dollar ($1.00), which amount shall be applied against the Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due as of such date. On May 22, 1994, Lessor shall pay (by check or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other method of payment acceptable to Lessor and Lessee) to Lessee an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to One Dollar ($1.00), which amount shall be added to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due as of such date. The payments set forth in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grammatical paragraph of Section 4 shall not in any way \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -8- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the calculation of Basic Rent or any other sums due under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lease." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Net Lease; No Counterclaim, Abatement, etc. In Section 5, (i) the word \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "fully" is hereby inserted preceding "net lease" in the first sentence, (ii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase ", including, without limitation, the construction or financing of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements thereon including the Renovations" is hereby inserted at the end of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first sentence after "thereof", and (iii) the phrase "or construction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql renovations upon" is hereby inserted in clause (g) after "use of". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Alterations. The text of Section 8 is hereby deleted and replaced with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as permitted under the Building Lease, Lessee shall not have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right to make any improvements or additions (collectively, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Alterations") to the Land at any time during the term of this Lease. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Indemnification by Lessee. In Section 12, (i) the first sentence is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby revised to begin as follows: "Lessee will (to the fullest extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by law) defend, protect, indemnify and save harmless Lessor, CIBC, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee, any Lender and their respective successors, assigns, participants, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers, employees . . .". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Payment of Taxes, etc. Section 14 is hereby modified as follows: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Clause (a) is hereby deleted and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Lessee shall hold Lessor harmless against and shall pay, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to delinquency, whether or not payable directly by Lessee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor or subject to withholding at the source: (i) all governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes, assessments, levies, fees, water and sewer rents and charges, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property taxes, licenses, permit fees and all other governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges, general and special, ordinary and extraordinary, foreseen and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unforeseen, and all charges for utility or communications services, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which, at any time prior to or during the term of this Lease, (A) are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql imposed or levied upon, assessed against or measured by (1) the Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the value thereof, or the revenues, rents, issues, income, awards, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeds or profits thereof, (2) any Basic Rent, Additional Rent or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other sum payable hereunder or (3) this Lease or the leasehold estate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby created or (B) arise in respect of the occupancy, operation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession, leasing, subleasing, construction, repair, rebuilding or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -9- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Land; (ii) all transfer, sales, recording, value added, use and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar taxes at any time levied, assessed or payable on account of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the acquisition, occupancy, operation, possession, leasing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subleasing, construction, repair, rebuilding or use of the Land; (iii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all taxes, assessments, levies, charges, fees, rents or payments in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lieu of, or as a substitute for, those payments referred to in clauses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) and (ii) above or any part thereof, whether or not expressly so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated; and (iv) all other taxes imposed on, with respect to, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with the Operative Agreements and the transactions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated thereby, including any sale of the Land pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41 (all of the foregoing being referred to collectively as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Taxes"). The foregoing requirements of this Section 14(a) are subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Lessee's rights under Section 17 hereof. If any such Taxes may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legally be paid in installments, Lessee may pay such Taxes in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments due; provided, however, that in such event, Lessee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay all remaining installments (whether or not then due) prior to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration of this Lease or upon termination of this Lease, except if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such expiration occurs as a result of Lessee purchasing the Land \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 41 hereof. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In clause (b), item (iii) is hereby deleted, and item (iv) shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- ---------- --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql now become item (iii). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. Permitted Contests. In Section 17, insert the following in the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence after the phrase "suppliers or vendors or lien therefor,": "or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims of any other Person affecting the Land or the Building (or any part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof) or any Lien therefor," \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Risks To Be Insured. In Section 18.1, the reference in clause (x) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor Purchase Price is hereby changed to Balance Due. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. Total Destruction. In Section 19.3, all references to the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Casualty Termination Price" are hereby changed to "Casualty Value Payment". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All references to "Lessor Purchase Price" are hereby changed to "Balance Due". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. Total Taking. In Section 20.3, all references to "Taking Termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price" are hereby changed to "Taking Value Payment". All references to "Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Price" are hereby changed to "Balance Due". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. Application of Awards. In Section 20.4, the phrase in clause (iii): \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------- ------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Lessor and shall be applied to reduce the Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed to "Lessor as Qualified \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -10- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payments and shall be applied to reduce the Balance Due (to the extent so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided under the definition of `Qualified Payments')". In Clause (b), the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql phrase "payment of the purchase price" is hereby changed to "the Taking Value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. Right of Lessor to Perform Lessee's Covenants, Etc. In Section 23, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------- ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following is inserted immediately after the phrase "perform any act" in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first sentence: "(including without limitation completion of the Renovations)." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. Assignments, Subleases, Etc. by Lessee. In Section 24.1, the second \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------- ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence shall end "operation of law or otherwise"; and the remainder of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence is hereby deleted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. Trustee; Power of Sale. In Section 26, all references to "Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Price" are hereby changed to "Balance Due." The reference to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Continental Lawyers Title Company" in Section 26 is hereby changed to "Lawyers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Insurance Company." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. Further Assurance for Lessee's Obligations. All references in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------ ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27 to the "Lessor Purchase Price" are hereby changed to the "Balance Due". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22. End of Lease Term. In Section 37, the phrase "and subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations of Lessee as provided for at Section 41" is hereby inserted after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "termination of this Lease" in the first sentence. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. Purchase and Remarketing of Land. In Section 41, the phrase "payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Balance Due and the" is hereby inserted immediately preceding the phrase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "purchase and sale". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. Lessee's Option to Purchase. Section 41.1(a) is hereby deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.1 Lessee's Option to Purchase. (a) Subject to the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and provisions set forth in this Section 41.1, Lessee shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option (the "Purchase Option"), to be exercised as set forth below at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time on or before the Option Termination Date (as hereinafter defined), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to purchase from Lessor at any time during the Fixed Term Lessor's interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Land. Such option must be exercised by written notice to Lessor, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which exercise shall be irrevocable; and such exercise notice will specify \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the closing date, which must occur on an Installment Date, for Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of the Land, which date shall not be more than sixty (60) days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following Lessor's receipt of such notice but in no event later than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date, and the closing of the conveyance of the Land shall occur \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on such date. In such event, subject to the provisions set forth in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 41, on such closing date, Lessor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -11- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convey to Lessee, and Lessee shall purchase from Lessor, Lessor's interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Land. The purchase price to be paid by Lessee for the Land shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an amount equal to the Balance Due as of the closing date of Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of the Land. As a condition to Lessor's obligations hereunder, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee shall also pay to Lessor all Basic Rent, Additional Rent and other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts that may have accrued as of such date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25. Purchase. Section 41.2 is hereby deleted and replaced with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.2 Expiration Date Obligation to Pay and Purchase. Unless Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have exercised the Purchase Option, then, subject to the terms, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions and provisions set forth in this Section 41, Lessee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to purchase all of Lessor's interest in the Land and pay to Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Balance Due as of the Expiration Date along with all accrued Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent, Additional Rent and other amounts then due. Upon receipt of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount, Lessee shall be deemed to have purchased from Lessor, and Lessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall convey to Lessee, on the Expiration Date all of Lessor's interest in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Land. Lessee acknowledges that under Section 41 of the Building Lease, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee shall be obligated to pay the Balance Due (as defined in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Building Lease) under the Building Lease and purchase the Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql simultaneously with the purchase of the Land. Lessee may designate, in a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice given to Lessor not less than ten (10) days prior to the closing of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such purchase (time being of the essence), a transferee to whom the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance shall be made (if other than to Lessee), in which case such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conveyance shall (subject to the terms and conditions set forth herein) be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made to such designee; provided, however, that such designation of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferee shall not cause Lessee to be released, fully or partially, from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its obligations under this Lease, including without limitation its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to pay the Balance Due on the Expiration Date and all other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued amounts. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26. Acceleration of Purchase Obligation. Section 41.3 is hereby deleted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.3 Acceleration of Expiration Date Obligation. Lessee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligated to purchase Lessor's interest in the Land and pay to Lessor the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due along with all amounts which have accrued and are due and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable hereunder immediately upon the occurrence of any Event of Default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in clauses (k) or (l) of Section 25.1. Further, notwithstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anything contained herein to the contrary, at any time upon the occurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and during the continuance of an Event of Default, if Lessor gives Lessee a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -12- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 25.2(a)(i) terminating Lessee's right of possession (for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of this Section 41 such notice being referred to as a "Purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acceleration Notice"), Lessee shall be obligated to purchase Lessor's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in the Land and to pay to Lessor the Balance Due along with all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts which have accrued and are payable hereunder on the date which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ten (10) business days following Lessee's receipt of such Purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acceleration Notice. If Lessee's obligations under this Section 41.3 take \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql place on a date other than an Installment Date, Basic Rent shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prorated to such date. Lessee acknowledges that its receipt of a Purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Acceleration Notice under this Section 41.3 shall also constitute a receipt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Lessee of a Purchase Acceleration Notice under the Building Lease. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor's right to terminate the Purchase Option pursuant to Section 41.1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to accelerate the purchase of the Lessor's interest in the Land are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independent of each other, and notwithstanding anything in Section 41.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the contrary, unless the Option Termination Date shall have first occurred, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Purchase Option shall terminate and be of no further force or effect on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date that any Purchase Acceleration Notice is given. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If Lessee fails to purchase Lessor's interest in the Land and pay the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due along with all other amounts as provided for in the preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph on the tenth (10th) Business Day following Lessee's receipt of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Purchase Acceleration Notice, then, Lessor shall be free to sell the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land to another Person and upon any such subsequent sale to any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Person by Lessor of Lessor's interest in the Land, Lessor shall be entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to recover from Lessee, and Lessee shall upon demand pay to Lessor, an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to (i) the Balance Due, plus (ii) the amount of all Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent, Additional Rent and other sums payable hereunder to and including the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such demand (including, without limitation, Breakage Amounts and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all costs and expenses incurred by Lessor in effectuating its remedies and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql making such sale or sales), minus (iii) the amount of all consideration (on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a present value basis determined by the application of a discount factor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (per annum) equal to five percent (5%) to the extent such consideration is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not cash), received by Lessor in connection with such sale. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27. Determination of the Purchase Price. In Section 41.4, (a) such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section shall hereafter be entitled "Breakage"; (b) the first grammatical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph is hereby deleted; (c) the remainder of said Section is hereby deleted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to all other amounts owed to Lessor hereunder, if Lessee's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the Balance Due and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -13- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of Lessor's interest in the Land occurs on a date other than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LIBO Last Day (defined below), and if the LIBO Rate for the three (3) month \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period commencing on the date on which the Balance Due is paid is less than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the LIBO Rate in effect during the Quarterly Period in which such payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurs, then Lessee shall pay to Lessor on such date as an additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql component of the Balance Due, the Breakage Amount (defined below). If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's payment of the Balance Due occurs when a six (6) month LIBO Rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is in effect and on a date other than the second Installment Date of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period, the Breakage Amount shall be an amount equal to the present value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the difference between (A) the portion of the Basic Rent payments for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the two (2) Quarterly Periods for which such six (6) month LIBO Rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applies (prorated for the number of days in the period beginning on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such purchase and ending on the second Installment Date occurring \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such six (6) month period with respect to which such six (6) month LIBO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rate applies), and (B) an amount equal to what the portion of the Basic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rent for such two Quarterly Periods (prorated for the number of days in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period beginning on the date on which such purchase occurs and ending on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the second Installment Date occurring in such six (6) month period with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to which such six (6) month LIBO Rate applies) would have been had \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Basic Rent for such two (2) Quarterly Periods been calculated using the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql three (3) month LIBO Rate in effect on the date of such purchase. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's payment of the Balance Due occurs when a three (3) month LIBO Rate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is in effect on other than the last day of a Quarterly Period, the Breakage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amount shall be an amount equal to the present value of the difference \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between (A) the portion of the Basic Rent payment for such Quarterly Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in which such purchase occurs (prorated for the number of days during the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period beginning on the date of such purchase and ending on Installment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date at the end of such Quarterly Period) and (B) an amount equal to what \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the portion of the Basic Rent payment for such Quarterly Period (prorated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the number of days in the period beginning on the date of such purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and ending on the Installment Date at the end of such Quarterly period) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would have been had the Basic Rent for such Quarterly Period been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculated using a three (3) month LIBO Rate in effect on the date of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase. In either case, such difference shall be discounted at a rate of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5% per annum. If any statute or rule of law shall validly limit the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due under this Section 41.4 to less than the amount above agreed upon, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessor or Assignee shall be entitled to the maximum amount allowable under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such statute or rule of law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28. Purchase Procedure. In Section 41.5, (a) the phrase "purchase price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therefor" in the first paragraph is hereby deleted and replaced with "Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due (and all other amounts due \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -14- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and owing hereunder)"; (b) in the second grammatical paragraph, the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence shall begin as follows: "If Lessee shall purchase Lessor's interest in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Land pursuant to Section 41.1(b) or if Lessee's obligation to pay the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Balance Due and purchase the Land is accelerated pursuant to Section 41.3, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee shall deliver the Balance Due to Lessor together with ..."; and (c) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following is hereby inserted at the end of the parenthetical in the penultimate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence in such second grammatical paragraph: "and pay to Lessor the Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due along with all other amounts due and owing hereunder". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29. Option to Remarket. The second grammatical paragraph of Section 41.6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is hereby deleted and replaced with the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee's effective exercise and consummation of the Remarketing Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be subject to the due and timely fulfillment of each of the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions, the failure of any of which shall render the Remarketing Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Lessee's exercise thereof null and void, in which event, Lessee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be obligated on the Expiration Date to pay to Lessor the Balance Due (and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other accrued amounts) and perform its obligations under Section 41.2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and if the Expiration Date shall have occurred, this Lease shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatically be deemed extended until five (5) Business Days after such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expiration Date and the purchase by Lessee under Section 41.2 and payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Balance Due and all other amounts due and owing hereunder shall (and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other accrued amounts) be consummated on the fifth such Business Day. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In subparagraph J, the first reference to "Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleted and replaced with "Balance Due plus all other amounts due and owing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder", and the second reference thereto is hereby replaced with "Balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Due". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The reference in subparagraph L to "Lessor Purchase Price" is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deleted and replaced with "Balance Due and all other amounts due and owing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The parenthetical and succeeding phrase "within ten (10) business days" in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subparagraph M is hereby deleted and replaced with the following: "(and Lessee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be obligated to purchase the Land and pay to Lessor the Balance Due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql together with all other amounts due and owing hereunder pursuant to Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41.2) within five (5) business days". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ---- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following sentence is hereby added after the last sentence in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 41: "Lessee shall pay to Lessor each amount due pursuant to this Section 41 by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no later than 12:00 Noon (Los Angeles time) on the date such payment is due and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable." \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -15- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 30. The following Sections are hereby inserted after Section 50 (and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent Sections are hereby renumbered accordingly). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 51. Additional Waivers. IN CONNECTION WITH THE TRANSACTIONS PROVIDED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR HEREIN AND AS FURTHER CONSIDERATION FOR LESSOR AGREEING TO ENTER INTO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS SECOND AMENDMENT LESSEE WAIVES TO THE MAXIMUM EXTENT SUCH WAIVER IS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY ONE OR MORE OF CALIFORNIA CIVIL CODE (S)(S) 1951.2, 2808, 2809, 2810, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849, AND 2850 TO THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE (S)(S) 580A, 580B, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 580C, 580D AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2, TITLE 14, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PART IV OF THE CALIFORNIA CIVIL CODE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 52. Lessee Further Acknowledgments. Lessee has been represented by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal and tax counsel, independent accountants and other professionals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of which has been personally selected by Lessee, as Lessee has found \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to consult concerning the consummation of the transactions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated in this Lease and the other Operative Agreements, and such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation has included an examination and analysis of Lessee's rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and obligations and the basis of all accounting, tax, financial and legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aspects and treatment under this Lease and the other Operative Agreements. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to the accounting, tax, financial and legal consequences of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the transactions contemplated herein and in the Operative Agreements, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee is relying solely upon the advice of its own tax, accounting and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal advisors and upon its knowledge with respect thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 53. Certain Tax Matters. Without limiting the acknowledgements made by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Lessee at Section 52, Lessor and Lessee agree that, in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their intentions and the substance of the transactions contemplated hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to the extent permitted by law, Lessee (and not Lessor) shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql treated as the owner of the Land for Federal, state, and local income tax \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes. Lessee shall be entitled to take any deduction, credit allowance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other reporting, filing or other tax position consistent with such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql characterizations. Lessor shall not file any Federal, state or local income \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tax returns, reports or other statements in a manner which is inconsistent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the foregoing provisions of this Section 53. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 54. Attorneys' Fees and Legal Expenses. If either party commences any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal action or other proceeding to enforce any of the terms of this Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any of the Operative Documents to which Lessor and Lessee are a party, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -16- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or because of any breach by the other party or dispute hereunder or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder, the successful or prevailing party shall be entitled to recover \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the nonprevailing party all reasonable attorneys' fees and costs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incurred in connection therewith, whether or not such controversy, claim or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute is prosecuted to a final judgment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. AFFIRMATION OF STATUS OF ORIGINAL LAND LEASE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as amended by this Second Amendment, the Original Land Lease is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unchanged; and, as amended by this Second Amendment, the Original Land Lease \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remains in full force and effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, all parties hereto have caused this Second Amendment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be duly executed as of the date first set forth above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LESSOR: CIBC INC., a Delaware corporation \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Tom R. Wagner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Vice President \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ______________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LESSEE: AMD INTERNATIONAL SALES & SERVICE, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql LTD., a Delaware corporation \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name: Marvin Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Sr. VP, CFO and Treasurer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -17- \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACKNOWLEDGEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF CALIFORNIA ) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ) ss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF SAN FRANCISCO ) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 17, 1993, before me, Rhoda Allerhand, personally appeared Tom \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R. Wagner, personally known to me (or proved to me on the basis of satisfactory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql evidence) to be the person whose name is subscribed to the within instrument and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledged to me that he executed the same in his authorized capacity, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that by his signature on the instrument the person, or the entity upon behalf of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the person acted, executed the instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITNESS my hand and official seal. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature: /s/ Rhoda Allerhand \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Seal) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATE OF CALIFORNIA ) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ) ss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COUNTY OF SANTA CLARA ) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 17, 1993, before me, Janis V. Cahill, personally appeared \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin Burkett, personally known to me (or proved to me on the basis of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory evidence) to be the person whose name is subscribed to the within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument and acknowledged to me that he executed the same in his authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity, and that by his signature on the instrument the person, or the entity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon behalf of which the person acted, executed the instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITNESS my hand and official seal. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature: /s/ Janis V. Cahill \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Seal) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -18- \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_8}{\*\bkmkend doc_1_8} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.30 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE SAVINGS PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (AMENDMENT AND RESTATEMENT EFFECTIVE AS OF AUGUST 1, 1993) \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE SAVINGS PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TITLE AND DEFINITIONS......................... 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Title.......................................................... 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Definitions.................................................... 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPATION............................. 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 Participation.................................................. 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFERRAL ELECTIONS......................... 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Elections to Defer Compensation................................ 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Investment Elections........................................... 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPANT ACCOUNTS........................ 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Deferral Account............................................... 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Company Matching Account....................................... 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VESTING.............................. 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Deferral Account............................................... 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Company Matching Account....................................... 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISTRIBUTIONS........................... 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.1 Amount and Time of Distribution................................ 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.2 Form of Distribution........................................... 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.3 Termination of Participation................................... 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VII \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPANT LOANS......................... 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1 Hardship Loans to Participants................................. 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VIII \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADMINISTRATION........................... 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1 Committee Action............................................... 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.2 Powers and Duties of the Committee............................. 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.3 Construction and Interpretation................................ 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.4 Information.................................................... 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.5 Compensation, Expenses and Indemnity........................... 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.6 Quarterly Statements........................................... 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IX \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS........................... 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.1 Unsecured General Creditor..................................... 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.2 Restriction Against Assignment................................. 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3 Withholding.................................................... 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.4 Amendment, Modification, Suspension or Termination............. 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.5 Governing Law..................................................\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.6 Receipt or Release............................................. 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.7 Headings, etc. Not Part of Agreement........................... 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.8 Limitation on Participants' Rights............................. 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE X \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BENEFIT OFFSET........................... 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.1 Offset for Certain Benefits Payable Under Split- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dollar Life Insurance Policies................................. 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ii \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE SAVINGS PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (AMENDMENT AND RESTATEMENT EFFECTIVE AS OF AUGUST 1, 1993) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, ADVANCED MICRO DEVICES, INC. (the "Company") has established \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Advanced Micro Devices Executive Savings Plan (the "Plan") effective as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql August 1, 1993; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, it is desirable to amend and restate the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW, THEREFORE, the Plan is hereby amended in its entirety and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restated, effective as of August 1, 1993, as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TITLE AND DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Title. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Plan shall be known as the Advanced Micro Devices Executive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Savings Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Definitions. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Whenever the following words and phrases are used in this Plan, with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first letter capitalized, they shall have the meanings specified below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Account" or "Accounts" shall mean a Participant's Deferral Account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Company Matching Account. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Beneficiary" means the person or persons, including a trustee, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal representative or other fiduciary, last designated in writing by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant and filed with the Committee in accordance with procedures \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established by the Committee to receive the benefits specified hereunder in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event of the Participant's death. If there is no valid Beneficiary designation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in effect, or if there is no surviving designated Beneficiary, then the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's surviving spouse shall be the Beneficiary. If there is no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surviving spouse to receive any benefits payable in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding sentence, the duly appointed and currently acting personal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of the Participant's estate (which shall include either the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's probate estate or living trust) shall be the Beneficiary. In any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case where there is no such personal representative of the Participant's estate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly appointed and acting in that capacity within 90 days after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's death (or such extended period as the Committee determines is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably necessary to allow such personal representative to be appointed, but \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not to exceed 180 days after the Participant's death), then Beneficiary shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean the person or persons who can verify by affidavit or court order to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction of the Committee that they are legally entitled to receive the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified hereunder. In the event any amount is payable under the Plan to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minor, payment shall not be made to the minor, but instead be paid (a) to that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person's living parent(s) to act as custodian, (b) if that person's parents are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then divorced, and one parent is the sole custodial parent, to such custodial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parent, or (c) if no parent of that person is then living, to a custodian \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selected by the Committee to hold the funds for the minor under the Uniform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transfers or Gifts to Minors Act in effect in the jurisdiction in which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minor resides. If no parent is living and the Committee decides not to select \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another custodian to hold the funds for the minor, then payment shall be made to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the duly appointed and currently acting guardian of the estate for the minor or, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if no guardian of the estate for the minor is duly appointed and currently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acting within 60 days after the date the amount becomes payable, payment shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deposited with the court having jurisdiction over the estate of the minor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Board of Directors" or "Board" shall mean the Board of Directors of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Bonus" shall mean any incentive compensation, excluding commissions, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable to a Participant in addition to the Participant's salary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Code" shall mean the Internal Revenue Code of 1986, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Committee" shall mean the Retirement Savings Plan Administrative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company" shall mean Advanced Micro Devices, any successor corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and each corporation which is a member of a controlled group of corporations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (within the meaning of Section 1563(a) of the Code, determined without regard to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1563(a)(4) and (e) (3) (C) thereof and by substituting the phrase "at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least 50 percent" for the phrase "at least 80 percent" each time it appears in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1563 (a) (1)) of which Advanced Micro Devices is a component member. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company Matching Account" shall mean the bookkeeping account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintained by the Committee for each Participant that is credited with an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to 50% of a Participant's Salary Deferrals (subject to certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitations) and interest pursuant to Section 4.2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Compensation" shall mean the Salary, commissions and Bonus that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant is entitled to for services rendered to the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Deferral Account" shall mean the bookkeeping account maintained by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Committee for each Participant that is credited with amounts equal to (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the portion of the Participant's Salary and/or commissions that he elects to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defer, (2) the portion of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Participant's Bonus that he elects to defer, and (3) interest pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Effective Date" shall mean August 1, 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Election Date" shall mean December 15 or such earlier date as is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified by the Committee and communicated to the Participant with at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thirty (30) days advance notice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Eligible Employee" shall mean each employee of the Company who is at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or above the level of director. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fiscal Year" shall mean the fiscal year of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Fund" or "Funds" shall mean one or more of the mutual funds or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contracts selected by the Committee pursuant to Section 3.2(b). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Initial Election Period" for an Eligible Employee shall mean the 30- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day period following the later of July 31, 1993 or the date the employee becomes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Eligible Employee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Interest Rate" shall mean, for each Fund, an amount equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gross rate of gain or loss on the assets of such Fund during the month (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduced by administrative and investment fees charged to investors in such Fund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the month and (2) further reduced by one-twelfth (1/12th) of one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage point. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Loan Account" shall mean the bookkeeping account maintained by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee for each Participant who obtains a hardship loan from the Committee in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with Article VII that is credited with (1) an amount equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the loan and (2) interest pursuant to Section 7.1(d). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Participant" shall mean any Eligible Employee who elects to defer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compensation in accordance with Section 3.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Payment Eligibility Date" shall mean the first day of the month \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the end of the fiscal quarter following the fiscal quarter in which a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant terminates employment or dies. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Plan" shall mean the Advanced Micro Devices Executive Savings Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth herein, now in effect, or as amended from time to time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Plan Year" shall mean the 12 consecutive month `period beginning on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql January 1 each year, except that the first Plan Year shall be a short Plan Year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on August 1, 1993 and ending on December 31, 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Salary" shall mean the Participant's base pay. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Tax Adjustment Factor" shall mean a number, determined by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee, which is equal to one minus the sum of (1) the highest marginal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal personal income tax rate then in effect and (2) the effective highest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql marginal state income tax rate in the state in which the Participant resides, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql net after the effect of the deduction for such state income tax for federal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql income tax purposes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 Participation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Eligible Employee shall become a Participant in the Plan by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electing to defer all or a portion of his or her Compensation in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.1. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEFERRAL ELECTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Elections to Defer Compensation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) General Rule. The amount of Compensation which an Eligible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee may elect to defer is as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Any percentage of Salary up to 50%, provided that such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eligible Employee's Salary is not reduced to an amount less than the Social \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security wage base for the plan year; plus \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Any percentage or dollar amount of Bonus and commissions up \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to 100%. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Initial Election. Each Eligible Employee may elect to defer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compensation by filing with the Committee an election, on a form provided by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee, no later than the last day of his or her Initial Election Period. An \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election to defer Compensation during an Initial Election Period shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable and shall be effective with respect to Salary and commissions earned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the first pay period beginning after the later of August 1, 1993, or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of the election, and to each Bonus the amount of which first becomes fixed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and determinable after the date of the election; provided, however, that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective as of January 1, 1995, the initial election will apply to any Bonus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable for a Fiscal Year, or for a performance period ending with the close of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Fiscal Year, only if such election is made on or before June 30 of such Fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Elections other than Elections during the Initial Election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period. Any Eligible Employee who fails to elect to defer Compensation during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his or her Initial Election Period may subsequently become a Participant, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Eligible Employee who \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has terminated a prior Salary, commissions or Bonus deferral election may elect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to again defer Salary, commissions or Bonuses or any combination thereof, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing an appropriate election, on a form provided by the Committee, to defer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compensation. An election to defer Salary and/or commissions must be filed on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or before the Election Date and will be effective for Salary and/or commissions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earned during pay periods beginning after the following December 25. An \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election to defer a portion of each Bonus for a Fiscal Year must be filed on or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before the Election Date preceding the date the Bonus first becomes fixed and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determinable; provided, however, that, effective as of January 1, 1995, an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election to defer a Bonus for a Fiscal Year, or for a performance period ending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the close of a Fiscal Year, must be made on or before June 30 of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fiscal Year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Duration of Salary Deferral Election. Any Salary deferral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election made under paragraph (b) or paragraph (c) of this Section 3.1 shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain in effect, notwithstanding any change in the Participant's Salary, until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed or terminated in accordance with the terms of this paragraph (d); \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that such election shall terminate for Salary or commissions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid while the Participant is not an Eligible Employee. A Participant may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase, decrease or terminate his or her Salary and/or commission deferral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election, effective for Salary and/or commissions earned during pay periods \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning after any December 25, by filing a new election, in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms of this Section 3.1, with the Committee on or before the preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Election Date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Duration of Bonus Deferral Election. Any Bonus deferral election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made under paragraph (b) or paragraph (c) of this Section 3.1 shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable and shall apply only to the Bonus or Bonuses payable with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services performed during the Fiscal Year or the performance period ending with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the close of such Fiscal Year, for which the election is made. For each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent Fiscal Year, or performance period ending with the close of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent Fiscal Year, an Eligible Employee may make a new election to defer a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percentage of each of his or her Bonuses for that Fiscal Year. Such election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be on forms provided by the Committee and shall be made on or before the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Election Date of the Fiscal Year preceding the Fiscal Year in which the Bonus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise would be paid. Notwithstanding the foregoing, effective as of January \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1, 1995, the election to defer a Bonus for a Fiscal Year, or for a performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period ending with the close of a Fiscal Year, must be made on or before June 30 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Fiscal Year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Investment Elections. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) At the time of making the deferral elections described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1, the Participant shall designate, on a form provided by the Committee, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the types of mutual funds or contracts the Participant's Accounts will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to be invested in for purposes of determining the amount of earnings \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be credited to those Accounts. In making the designation pursuant to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2, the Participant may specify that all or any 10% multiple of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate of his Accounts be deemed to be invested in one or more of the types \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of mutual funds or contracts available. Effective as of the beginning of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calendar quarter, a Participant may change the designation made under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2 by filing an election, on a form provided by the Committee, at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thirty (30) calendar days prior to the beginning of such quarter. If a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant fails to elect a type of fund under this Section 3.2, he or she \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to have elected the Fund determined by the Committee to most \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql closely approximate a money market fund. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Although the Participant may designate the type of mutual funds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in paragraph (a) above, the Committee shall select from time to time, in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sole discretion, a commercially available fund or contract of each of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available types to be the Funds. The Interest Rate of each such commercially \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available fund or contract shall be used to determine the amount of earnings to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be credited to Participants' Accounts under Article IV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPANT ACCOUNTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Deferral Account. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Committee shall establish and maintain a Deferral Account for each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant under the Plan. Each Participant's Deferral Account shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further divided into separate subaccounts ("mutual fund subaccounts"), each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which corresponds to a mutual fund or contract elected by the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 3.2(a). A Participant's Deferral Account shall be credited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) As of the last day of each month, the Committee shall credit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the mutual fund subaccounts of the Participant's Deferral Account with an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to Salary and/or commissions deferred by the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during each pay period ending in that month in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's election under Section 3.2(a); that is, the portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's deferred Salary and/or commissions that the Participant has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elected to be deemed to be invested in a certain type of mutual fund shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be credited to the mutual fund subaccount corresponding to that mutual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) As of the last day of the month in which the Bonus or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql partial Bonus would have been paid, the Committee shall credit the mutual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fund subaccounts of the Participant's Deferral Account with an amount equal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the portion of the Bonus deferred by the Participant for such Plan Year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with the Participant's election under Section 3.2(a); that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is, the portion of the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's deferred Bonus that the Participant has elected to be deemed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be invested in a particular type of mutual fund shall be credited to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutual fund subaccount corresponding to that mutual fund; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) As of the last day of each month, each mutual fund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subaccount of a Participant's Deferral Account shall be credited with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings in an amount equal to that determined by multiplying the balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credited to such mutual fund subaccount as of the last day of the preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month by the Interest Rate for the corresponding Fund selected by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company pursuant to Section 3.2(b). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Company Matching Account. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Committee shall establish and maintain a Company Matching Account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for each Participant under the Plan. Each Participant's Company Matching \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account shall be further divided into separate mutual fund subaccounts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding to the type of mutual fund or contract elected by the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 3.2(a). A Participant's Company Matching Account shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credited as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) As of the last day of each Plan Year, the Committee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit the mutual fund subaccounts of the Participant's Company Matching \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account with an amount equal to 50% of the amount of the Salary deferred by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Participant during each pay period ending in that Plan Year (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Company Matching Amount") in accordance with the Participant's election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 3.2(a); that is, the portion of the Company Matching Amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Participant elected to be deemed to be invested in a certain type \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of mutual fund shall be credited to the corresponding mutual fund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subaccount. Notwithstanding the foregoing, in no event shall the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Matching Amount for a Plan Year, when combined with the maximum Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Matching Contribution which the Participant could have received under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. Retirement Savings Plan for the same year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (assuming deferrals at the maximum permissible rate), exceed 1.5% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Salary during such Plan Year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) As of the last day of each month, each mutual fund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subaccount of a Participant's Company Matching Account shall be credited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with earnings in an amount equal to that determined by multiplying the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance credited to such mutual fund subaccount as of the last day of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding month by the Interest Rate for the corresponding Fund selected by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company pursuant to Section 3.2(b). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VESTING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Deferral Account. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Participant's Deferral Account shall at all times be 100% vested. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Company Matching Account. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Participant's Company Matching Account shall at all times be 100% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vested. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VI \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DISTRIBUTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.1 Amount and Time of Distribution. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each Participant (or, in the case of his or her death, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Beneficiary) shall be entitled to receive a distribution of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits under this Plan as soon as practicable following his or her Payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eligibility Date. The amount payable to a Participant shall be the sum of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount credited to his or her Deferral Account and Company Matching Account as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of his or her Payment Eligibility Date. No amount credited to a Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan Account established under Article VII shall be distributed to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant, but such amount shall instead be forfeited, as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph 7.1(f). If a Participant's account becomes payable and the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after a reasonable search and a period of three (3) years from the Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment Eligibility Date cannot locate the Participant (or, if the Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Beneficiary is entitled to payment, such beneficiary), the Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounts shall be forfeited to the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.2 Form of Distribution. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Lump Sum. The form of the distribution of benefits to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant (or his or her Beneficiary) shall be a cash lump sum payment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Installments. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Notwithstanding subsection (a) above, a Participant may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elect that his or her benefits be paid in substantially equal annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments over three to ten years provided that his or her election is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed with the Committee at least two years prior to the date his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment with the Company terminates and provided further that the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the first annual installment (determined by dividing the account balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the number of installments elected) would be in an amount at least equal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to $20,000. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) The first annual installment shall be paid within 90 days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the end of the Plan Year during which the Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment with the Company terminates. Subsequent installments shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid on the annual anniversaries of the first installment payment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) Notwithstanding anything contained in Sections 4.1(c) or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2(b) to the contrary, beginning with the month following the month in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Participant's employment with the Company terminates and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuing until all amounts credited to his or her Accounts have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributed, the Participant's Accounts will be credited with interest, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the end of each month, at the rate determined by the Committee from time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to time, which rate shall be either (1) the rate of return of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql professionally managed fixed income fund for such month or (2) one-twelfth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the annual prime rate of interest declared by Bank of America, N.A., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Wells Fargo Bank, N.A. or First Interstate Bank of California and in effect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the first day of such month. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.3 Termination of Participation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company reserves the unilateral right to terminate or restrict a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's participation at any time, and distribute all amounts due to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VII \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PARTICIPANT LOANS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1 Hardship Loans to Participants. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Subject to the approval of the Committee and guidelines \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promulgated by the Committee, each Participant may borrow from the Company in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order to meet a financial hardship to the Participant resulting from (1) an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql illness or accident of the Participant or a dependent of the Participant, (2) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loss of the Participant's property due to casualty or (3) other similar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances arising as a result of events beyond the control of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. Each loan made pursuant to this Section 7.1 shall be evidenced by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql note from the Participant on a form provided by the Committee. Such note shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bear interest at a rate equal to that necessary to avoid imputed interest under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 7872 and 1274(d) of the Code and have such other terms as the Committee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall determine. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Committee may make a loan under this Section 7.1 only if the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of the loans outstanding does not exceed the amount required to meet the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediate financial need created by such hardship and does not exceed 65% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined balance of the Participant's Deferral Account and Loan Account as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first day of the month next following the Committee's acceptance of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's written application for a hardship loan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Committee shall, upon making a loan to a Participant, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql establish and maintain a Loan Account for the Participant. The Committee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql debit the mutual fund subaccounts maintained under the Participant's Deferral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account on a pro-rata basis or on such other basis as the Committee deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate or desirable and shall credit the Participant's Loan Account in an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the amount of the loan. The amount credited to a Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Loan Account shall not be deemed to be invested as directed by the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 3.2(a) but shall be deemed to be invested in the note given to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company by the Participant under this Section 7.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) As of the last day of each month, the Participant's Loan Account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be credited with interest for the period since the last day of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding month, calculated on the balance of the Loan Account as of such date, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the rate of interest on the note as specified in paragraph (a) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon any payment of principal and/or interest on a loan made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Section 7.1, the Committee shall debit the Participant's Loan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account and shall credit the mutual fund subaccounts maintained under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Deferral Account with the amount of such payment on a pro-rata \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis or on such other basis as the Committee deems appropriate or desirable. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) On a Participant's Payment Eligibility Date or, if earlier, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date on which the first annual installment payment is due to a Participant, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding balance in the Participant's Loan Account shall be reduced to zero, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the obligation to repay the hardship loan shall be cancelled. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE VIII \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADMINISTRATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1 Committee Action. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Committee shall act at meetings by affirmative vote of a majority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the members of the Committee. Any action permitted to be taken at a meeting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be taken without a meeting if, prior to such action, a written consent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the action is signed by all members of the Committee and such written consent is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed with the minutes of the proceedings of the Committee. A member of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee shall not vote or act upon any matter which relates solely to himself \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or herself as a Participant. The Chairman or any other member or members of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee designated by the Chairman may execute any certificate or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written direction on behalf of the Committee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.2 Powers and Duties of the Committee. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Committee, on behalf of the Participants and their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Beneficiaries, shall enforce the Plan in accordance with its terms, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charged with the general administration of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan, and shall have all powers necessary to accomplish its purposes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, but not by way of limitation, the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To determine all questions relating to the eligibility of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees to participate; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To select the funds or contracts to be the Funds in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with Section 3.2(b) hereof; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To construe and interpret the terms and provisions of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To compute and certify to the amount and kind of benefits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable to Participants and their Beneficiaries; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To maintain all records that may be necessary for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) To provide for the disclosure of all information and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing or provision of all reports and statements to Participants, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Beneficiaries or governmental agencies as shall be required by law; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) To make and publish such rules for the regulation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and procedures for the administration of the Plan as are not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistent with the terms hereof; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (8) To appoint a plan administrator or, any other agent, and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate to them such powers and duties in connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan as the Committee may from time to time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prescribe. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.3 Construction and Interpretation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Committee shall have full discretion to construe and interpret the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and provisions of this Plan, which interpretation or construction shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final and binding on all parties, including but not limited to the Company and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Participant or Beneficiary. The Committee shall administer such terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions in a uniform and nondiscriminatory manner and in full accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any and all laws applicable to the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.4 Information. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql To enable the Committee to perform its functions, the Company shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supply full and timely information to the Committee on all matters relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Compensation of all Participants, their death or other cause of termination, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and such other pertinent facts as the Committee may require. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.5 Compensation, Expenses and Indemnity. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The members of the Committee shall serve without compensation for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their services hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Committee is authorized at the expense of the Company to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employ such legal counsel as it may deem advisable to assist in the performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its duties hereunder. Expenses and fees in connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan shall be paid by the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) To the extent permitted by applicable state law, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall indemnify and save harmless the Committee and each member thereof, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors and any delegate of the Committee who is an employee of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company against any and all expenses, liabilities and claims, including legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fees to defend against such liabilities and claims arising out of their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discharge in good faith of responsibilities under or incident to the Plan, other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than expenses and liabilities arising out of willful misconduct. This indemnity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not preclude such further indemnities as may be available under insurance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchased by the Company or provided by the Company under any bylaw, agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise, as such indemnities are permitted under state law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.6 Quarterly Statements. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Under procedures established by the Committee, a Participant shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive a statement with respect to such Participant's Accounts as soon as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql practicable following the end of each calendar quarter. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IX \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.1 Unsecured General Creditor. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participants and their Beneficiaries, heirs, successors, and assigns \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have no legal or equitable rights, claims, or interest in any specific \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property or assets of the Company. No assets of the Company shall be held under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any trust, or held in any way as collateral security for the fulfilling of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of the Company under this Plan. Any and all of the Company's assets \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be, and remain, the general, unpledged, unrestricted assets of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. The Company's obligation under the Plan shall be merely that of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unfunded and unsecured promise of the Company to pay money in the future, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights of the Participants and Beneficiaries shall be no greater than those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of unsecured general creditors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.2 Restriction Against Assignment. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall pay all amounts payable hereunder only to the person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or persons designated by the Plan and not to any other person or corporation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No part of a Participant's Accounts shall be liable for the debts, contracts, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engagements of any Participant, his or her Beneficiary, or successors in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest, nor shall a Participant's Accounts be subject to execution by levy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attachment, or garnishment or by any other legal or equitable proceeding, nor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall any such person have any right to alienate, anticipate, commute, pledge, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encumber, or assign any benefits or payments hereunder in any manner whatsoever. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any Participant, Beneficiary or successor in interest is adjudicated bankrupt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charge any distribution or payment from the Plan, voluntarily or involuntarily, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Committee, in its discretion, may cancel such distribution or payment (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any part thereof) to or for the benefit of such Participant, Beneficiary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor in interest in such manner as the Committee shall direct. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3 Withholding. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There shall be deducted from each payment made under the Plan all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes which are required to be withheld by the Company in respect to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment. The Company shall have the right to reduce any payment by the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of cash sufficient to provide the amount of said taxes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.4 Amendment, Modification, Suspension or Termination. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company may amend, modify, suspend or terminate the Plan in whole \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in part, except that no amendment, modification, suspension or termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall reduce any amounts then allocated previously to a Participant's Accounts. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that this Plan is terminated, the amounts credited to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Deferral Account and Company Matching Account shall be distributed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Participant or, in the event of his or her death, to his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Beneficiary in a lump sum within thirty (30) days following the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.5 Governing Law. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Plan shall be construed, governed and administered in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the laws of the State of California. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.6 Receipt or Release. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any payment to a Participant or the Participant's Beneficiary in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions of the Plan shall, to the extent thereof, be in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full satisfaction of all claims against the Committee and the Company. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee may require such Participant or Beneficiary, as a condition precedent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such payment, to execute a receipt and release to such effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.7 Headings, etc. Not Part of Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Headings and subheadings in this Plan are inserted for convenience of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference only and are not to be considered in the construction of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.8 Limitation on Participants' Rights. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participation in this Plan shall not give any Eligible Employee the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to be retained in the Company's employ or any right or interest in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan other than as herein provided. The Company reserves the right to dismiss \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Eligible Employee without any liability for any claim against the Company, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except to the extent provided herein. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE X \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BENEFIT OFFSET \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.1 Offset for Certain Benefits Payable Under Split-Dollar Life Insurance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policies. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Notwithstanding anything contained herein to the contrary, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits payable under this Plan shall be offset by the value of benefits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by the Participants under certain life insurance policies as set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this Section. Participants in this Plan may own life insurance policies (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Policies") purchased on their behalf by the Company. The exercise of ownership \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights under these Policies by each Participant is, however, subject to certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions (set forth in a "Split-Dollar Life Insurance Agreement" between each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant and the Company pursuant to which the Company holds a security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest on the Policy) and, if the Participant fails to meet the conditions set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in the Split-Dollar Life Insurance Agreement, the Company may exercise its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security interest in the Policy and cause the Participant to lose certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits under the Policy. In the event that a Participant satisfies the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions specified in Section 5 of the Split-Dollar Life Insurance Agreement, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so that the Participant becomes entitled to exercise rights under that section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql free from the Company's security interest, or the Company's security interest is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise released for a reason other than the Participant's death, the value of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those benefits shall constitute an offset to any benefits otherwise payable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Plan. This offset (the "Offset Value") shall be equal to the value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of benefits payable under the Split-Dollar Life Insurance Agreement, that is, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the cash surrender value of the Policy. The Offset Value shall then be compared \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Participant's Accounts, and the amounts credited to the Accounts shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduced, but not to less than zero, by the Offset Value; provided, however, that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any portion of the Accounts which is attributable to Compensation deferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during Plan Years in which the Company did not pay premiums on the Policy shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be reduced by the Offset Value, and the Committee shall maintain subaccounts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Participant's Accounts to the extent necessary to determine that portion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Account \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is subject to offset and the portion which is not subject to offset. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offset shall first be applied to the Participant's Company Matching Account and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then to the Participant's Deferral Account. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If the Policy in subsection (a) is not on the life of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant and the insured dies prior to distribution of benefits under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, then the value of the benefits received by the Participant under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy will offset the Participant's Accounts under this Plan to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in this subsection (b). This offset ("Offset Value") shall be equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the amount of death benefit payable to the Participant divided by the Tax \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Adjustment Factor. This Offset Value shall then be compared to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Accounts, and the amounts credited to the Accounts shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reduced, but not to be less than zero, by the Offset Value; provided, however, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any portion of the Accounts which is attributable to Compensation deferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during Plan Years in which the Company did not pay premiums on the Policy shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be reduced by the Offset Value. The offset shall first be applied to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's Company Matching Account and then to the Participant's Deferral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Account. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The reduction described in Section 10.1(a) shall be made as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date on which the Participant becomes entitled to exercise rights under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy free of the Company's security interest, and the reduction described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.1(b) shall be made as of the date on which the Participant receives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the death proceeds. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In the event of an offset as described herein, any election to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive distribution of the amounts credited to a Participant's Accounts in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of installments shall be deemed to be revoked, and any benefits which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or become payable under this Plan after such offset shall be paid in a lump sum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as soon as practicable following the Participant's Payment Eligibility Date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the Company has caused this Executive Savings Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be executed by its duly authorized officers on this _____ day of ________, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19__. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By_________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stanley Winvick \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Human Resources \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By_________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_9}{\*\bkmkend doc_1_9} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.31 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPLIT-DOLLAR LIFE INSURANCE AGREEMENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement is entered into as of __________, 19__ by and between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. (the "Company") and _______________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Employee") in reference to the following facts: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Employee is a valued employee of __________ _______________________. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Company has simultaneously with the execution of this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql caused The Manufacturers Life Insurance Company of America (the "Insurance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company") to issue policy number ___________________ (the "Policy") on the life \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Employee. The first annual premium has been paid by the Company as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. For purposes of this Agreement, the Company and its subsidiaries shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute the "Employer." For this purpose, a subsidiary is a corporation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Company owns, directly or indirectly, more than 50% of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation's outstanding securities. If Employee is employed by a corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which, as a result of a sale or other corporate reorganization, ceases to be a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary, such sale or other corporate reorganization shall be treated as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of Employee by Employer without Cause (as defined in Section 8) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless immediately following the event and without any break in employment the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee remains employed by the Company or another corporation which is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW THEREFORE, in consideration of the facts set forth above and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql various promises and covenants set forth below, the parties to this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Ownership of Policy. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company acknowledges that Employee is the owner of the Policy and that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee is entitled to exercise all of his or her ownership rights granted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms of the Policy, except to the extent that the power of the Employee to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise those rights is specifically limited by this Agreement. Except as so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited, it is the expressed intention of the parties to reserve to Employee all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights in and to the Policy granted to its owner by the terms thereof, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, but not limited to, the right to change the beneficiary of that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of the proceeds to which the Employee is entitled under Section 4 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and the right to exercise settlement options. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Company's Security Interest. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company's security interest in the Policy is conditioned upon its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactorily performing all of the covenants under this Agreement. Each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period covered by any individual premium payment described in Section 3 shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql considered a discrete extension of the Company's security interest in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy. The Company shall not have nor exercise any right in and to the Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which could, in any way, endanger, defeat, or impair any of the rights of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee in the Policy, including by way of illustration any right to collect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the proceeds of the Policy in excess of the amount due the Company as provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in this Agreement and in the Policy. The only rights in and to the Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to the Company in this Agreement shall be limited to the Company's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security interest in and to the cash value of the Policy, as defined herein, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a portion of the death benefit of the Policy as hereinafter provided (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Security Interest"). The Company shall not assign any of its Security Interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Policy to anyone other than Employee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Premium payments. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql So long as Employee is employed by the Employer and the Company's Security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest has not been released, the Company agrees to pay an annual premium on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Policy on or before the last day of each "Policy Year" (as such term is used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Policy) in an amount equal to the sum of (a) the compensation deferred by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee under the Advanced Micro Devices Executive Savings Plan (the "Plan") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the pay periods ending during such Policy Year plus (b) the "cost of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance" (as defined in the Policy) for the excess, if any, of (i) the death \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit required under Section 4 hereof (determined in compliance with the 7-pay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test set forth in Section 7702A of the Code) over (ii) the minimum death benefit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (determined in compliance with such 7-pay test) which could be provided by that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of the accumulated premiums actually paid under the Policy which were \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid pursuant to clause (a) of this sentence. The premium payment shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transmitted directly by the Company to the Insurance Company. Consistent with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the preceding sentences, prior to the release of the Company's Security Interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Policy, Employee and the Company agree that the Company shall from time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to time designate one or more individuals (the "Designee"), who may be officers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company, who shall be entitled to adjust the death benefit under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy and to direct the investments under the Policy; provided, however, that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Designee may only increase, but not decrease, the death benefit in effect on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date that the Policy is issued; provided further, that the Designee may only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql direct the investments under the Policies in funds offered by the Insurance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company under the Policy. During the period of time that this Agreement is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect, Employee irrevocably agrees that all dividends paid on the Policy shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be applied to purchase from the Insurance Company additional paid up life \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurance on the life of Employee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Death of Employee while employed by Employer. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If Employee dies prior to termination of employment with Employer and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to his or her Security Release Date (as defined in Section 10 below), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee's designated beneficiary shall be entitled to receive as a death \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit an amount equal to three times the Employee's annual base salary at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time of death, subject to a maximum benefit of Two Million Dollars ($2,000,000). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The amount described in the preceding sentence shall be paid from the proceeds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Policy; to the extent such amount exceeds such proceeds, the difference \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be paid from any other source that the Company may designate, which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either another life insurance policy on the life of Employee or the general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets of the Company. To the extent that the death benefit under the Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeds such amount, the balance of the death benefit shall be payable to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. The designation of the beneficiaries under the Policy shall be in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with this Section. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Employee agrees that, during the period of this Agreement, Employee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will obtain and provide to the Company and/or the Insurance Company the written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the spouse of the Employee, in the form attached hereto as Exhibit C, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any designation by Employee of anyone other than the Employee's spouse as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary to receive the benefits under this Section 4. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Employee's attaining his or her Security Release Date or termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee's employment on account of a Qualifying Termination. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) By making timely payment of the premiums described in Section 3, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may renew its Security Interest in the Policy for the period commencing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the due date of such payment until the later of (1) the due date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql next payment described in Section 3, or (2) the date that Employee attains his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or her Security Release Date or terminates employment with the Employer on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql account of a Qualifying Termination (either of which events described in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause 2 is referred to herein as a "Qualifying Event"). The Company may not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extend its Security Interest in the Policy under the Collateral Security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignment Agreement attached as Exhibit A after the occurrence of a Qualifying \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event. After such Qualifying Event, Employee shall be entitled to exercise all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of his or her ownership rights in the Policy without any limitation and this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and its accompanying Collateral Security Assignment Agreement shall no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql longer constitute a restriction on Employee's rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Notwithstanding paragraph (a), the Company shall continue to have its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Interest in the Policy, to the extent required to satisfy its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withholding obligations as described in Section 12 and to recover any amounts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owed by Employee as described in paragraph (c) below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Employee agrees that if, at the time of the occurrence of a Qualifying \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event, Employee has any outstanding balances on any loans made by the Company to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee, then, unless Employee otherwise pays such outstanding balances, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee shall cause, either by withdrawing from or borrowing on a non-recourse \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis against the Policy, to be transferred to the Company, that portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash value of the Policy which is equal to the sum of the outstanding balances \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on all such loans. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Termination of an Employee for a reason other than a Qualifying \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the employment of Employee with Employer is terminated prior to his or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql her Security Release Date for a reason other than a Qualifying Termination (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described below), Employee shall cause, either by withdrawing from or borrowing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Policy, on a nonrecourse basis, to be transferred to the Company an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the maximum amount that may then be obtained under the Policy. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that the amount that can be withdrawn from or borrowed against the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy is less than the cash surrender value of the Policy, the Company shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withhold from other compensation payable to Employee the amount of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql difference unless Employee has previously transferred to the Company an amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to such difference. In no event shall Employee's voluntary resignation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to attaining his or her Security Release Date (as such concept is further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined below) ever constitute a Qualifying Termination, except in certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql situations following a Change in Control (see Section 9). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Definition of a Qualifying Termination. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Qualifying Termination is either of the following events: the termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Employee by Employer for any reason other than "Cause," as described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8; or the termination of Employee after a Change in Control under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances described in Section 9(a). Both of these concepts are further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Qualifying Termination because Employee is terminated for a reason other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than "Cause". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For purposes of this Section, "Cause" shall mean (1) an act or acts of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dishonesty or moral turpitude (including but not limited to conviction of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql felony) taken by Employee; (2) Employee's willful failure to substantially \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform Employee's duties where such willful failure results in demonstrable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material injury and damage to the Employer; (3) Employee's misrepresentation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concealment of a material fact for the purpose of securing employment with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employer; or (4) performance by Employee which is substantially below the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard of performance which can reasonably be expected from an individual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occupying Employee's position or Employee's substantially failing to meet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance objectives (such as \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance objectives relating to profit) which have been previously agreed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between Employee and Employer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Qualifying Termination on account of a Change in Control. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) A Qualifying Termination shall be treated as occurring on account of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Change in Control" (as defined below) if within six (6) months prior to or 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months following such Change in Control, either (1) Employee's employment with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Employer is terminated without "Cause" (as defined in Section 8) or (2) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee terminates his or her employment with the Employer for "Good Reason" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (as defined in subsection (c) below). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) For purposes of this Section, a "Change in Control" shall mean a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change of control of a nature that would be required to be reported in response \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Exchange Act of 1934, as amended (the "Exchange Act"), or in response to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other form or report to the Securities and Exchange Commission or any stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange on which the Company's shares are listed which requires the reporting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a change of control. In addition, a Change of Control shall be deemed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have occurred if (i) any "person" (as such term is used in Sections 13(d) and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14(d) of the Exchange Act) is or becomes the beneficial owner, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, of securities of the Company representing more than 20% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined voting power of the Company's then outstanding securities; or (ii) in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any two-year period, individuals who were members of the Board of Directors (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Board') at the beginning of such period plus each new director whose election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or nomination for election was approved by at least two-thirds of the directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in office immediately prior to such election or nomination, cease for any reason \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to constitute at least a majority of the Board; or (iii) a majority of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql members of the Board in office prior to the happening of any event and who are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql still in office after such event, determines in its sole discretion within one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year after such event, that as a result of such event there has been a Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control. Notwithstanding the foregoing definition, "Change of Control" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclude the acquisition of securities representing more than 20% of the combined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voting power of the Company by the Company, any of its wholly-owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries, or any trustee or other fiduciary holding securities of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company under an employee benefit plan now or hereafter established by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. As used herein, the term "beneficial owner" shall have the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning as under Section 13(d) of the Exchange Act and related case law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) For purposes of this Section, "Good Reason" shall mean the occurrence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of one of the following events without Employee's consent: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) An adverse and significant change in the Employee's position, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duties, responsibilities, or status with the Employer, or a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change in Employee's office location to a point which is more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 30 miles from his or her office location prior to the Change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Control. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) A reduction by the Employer in Employee's base salary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incentive compensation opportunity not agreed to by Employee; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) The taking of any action by the Employer to eliminate benefit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plans without providing substitutes therefor, to reduce benefits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder or to substantially diminish the aggregate value of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incentive awards or other fringe benefits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) A termination of employment by Employee shall be for Good Reason if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one of the occurrences specified in paragraph (c) shall have occurred, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding that Employee may have other reasons for terminating employment, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including employment by another employer which Employee desires to accept. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Employee's attaining his or her Security Release Date. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Employee's "Security Release Date" shall mean the later of: (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date which is two years following the date on which the Company receives from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee a completed notice in the form attached hereto as Exhibit B (ii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date specified in such notice as the Security Release Date; provided that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee continues to be employed by Employer until such date. Notwithstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the preceding sentence, Employee may elect, by completing a notice in the form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached hereto as Exhibit D, that his or her Security Release Date be later \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the date selected in accordance with the preceding sentence, so long as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such election is filed with the Company at least two years prior to the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which would otherwise constitute his or her Security Release Date. For example, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if Employee originally selects January 1, 1998 as his or her Security Release \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, he or she may elect at any time prior to January 1, 1996 that his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date be postponed. Each election to postpone a Security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Release Date, once filed with the Company shall be irrevocable with regard to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql said election. Employee is entitled to make a maximum of two elections to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postpone his or her initial Security Release Date under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Employee shall attain his or her Security Release Date upon becoming \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disabled while employed by the Employer. Employee \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be considered "disabled" at the time that the Administrator (as defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 13(a) below) determines, based upon competent medical advice, that an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee is incapable of rendering substantial services to the Employer by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reason of mental or physical disability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Company's Security Interest in the Policy is contingent upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timely payment of premiums under Section 3 of this Agreement. Each period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covered by any individual premium payment shall be considered an independent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extension of the Company's Security Interest in the Policy. In the event that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company waives its rights by reason of failure to make payments under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3 of this Agreement, Employee shall immediately attain his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date. The Company's failure to extend its rights in no way \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affects the Company's duties and obligations under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Limitation on Employee's rights prior to a Qualifying Event. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order to protect the Company's Security Interest and notwithstanding any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other provisions in this Agreement, prior to a Qualifying Event, Employee agrees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that he or she will not modify the death benefit under the Policy, borrow \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Policy, assign the Policy, direct the investment of the cash \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender value of the Policy, or obtain any portion of the cash value of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy. Notwithstanding the preceding sentence, if Section 6 applies to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination, Employee may borrow or withdraw from the Policy, so long as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borrowing or withdrawal request is submitted to the Insurance Company along with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a directive that the borrowed or withdrawn amount be transferred directly to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. Tax Withholding. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It is recognized by the parties that the rights of Employee in the Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (as modified by the Agreement) may cause Employee to be treated under certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances as in receipt of gross income. These circumstances may also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impose upon the Company an obligation to deduct and withhold federal, state or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql local taxes. Unless Employee otherwise provides the Company the amounts it is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to withhold, Employee shall cause, either by withdrawing from or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql borrowing on a nonrecourse basis against the Policy, to be transferred to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company that portion of the cash value of the Policy which is equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount of any federal, state or local taxes required to be withheld. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Disputes. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Compensation Committee of the Board of Directors of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Administrator") shall administer this Agreement. The Administrator \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (either directly or through its designees) will have power and authority to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpret, construe, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and administer this Agreement (for the purpose of this section, the Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall include the Collateral Security Assignment Agreement); provided that, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Administrator's authority to interpret this Agreement shall not cause the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Administrator's decisions in this regard to be entitled to a deferential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard of review in the event that Employee or his or her beneficiary seeks \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review of the Administrator's decision as described below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Neither the Administrator, its designee nor its advisors, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liable to any person for any action taken or omitted in connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation and administration of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Because it is agreed that time will be of the essence in determining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether any payments are due to Employee or his or her beneficiary under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, Employee or his or her beneficiary may, if he or she desires, submit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any claim for payment under this Agreement or dispute regarding the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation of this Agreement to arbitration. This right to select \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitration shall be solely that of Employee or his or her beneficiary and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee or his or her beneficiary may decide whether or not to arbitrate in his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or her discretion. The "right to select arbitration" is not mandatory on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee or his or her beneficiary and Employee or his or her beneficiary may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql choose in lieu thereof to bring an action in an appropriate civil court. Once an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitration is commenced, however, it may not be discontinued without the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutual consent of both parties to the arbitration. During the lifetime of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee only he or she can use the arbitration procedure set forth in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Any claim for arbitration may be submitted as follows: if Employee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his or her beneficiary disagrees with the Administrator regarding the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretation of this Agreement and the claim is finally denied by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Administrator in whole or in part, such claim may be filed in writing with an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrator of Employee's or beneficiary's choice who is selected by the method \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in the next four sentences. The first step of the selection shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consist of Employee or his or her beneficiary submitting a list of five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql potential arbitrators to the Administrator. Each of the five arbitrators must \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be either (1) a member of the National Academy of Arbitrators located in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of California or (2) a retired California Superior Court or Appellate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court judge. Within one week after receipt of the list, the Administrator shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql select one of the five arbitrators as the arbitrator for the dispute in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql question. If the Administrator fails to select an arbitrator in a timely \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner, Employee or his or her beneficiary shall then designate one of the five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrators as the arbitrator for the dispute in question. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The arbitration hearing shall be held within seven days (or as soon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter as possible) after the picking of the arbitrator. No continuance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql said hearing shall be allowed without the mutual consent of Employee or his or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql her beneficiary \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Administrator. Absence from or nonparticipation at the hearing by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either party shall not prevent the issuance of an award. Hearing procedures \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which will expedite the hearing may be ordered at the arbitrator's discretion, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the arbitrator may close the hearing in his or her sole discretion when he \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or she decides he or she has heard sufficient evidence to satisfy issuance of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The arbitrator's award shall be rendered as expeditiously as possible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in no event later than one week after the close of the hearing. In the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event the arbitrator finds that the Company has breached this Agreement, he or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql she shall order the Company to immediately take the necessary steps to remedy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the breach. The award of the arbitrator shall be final and binding upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. The award may be enforced in any appropriate court as soon as possible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after its rendition. If an action is brought to confirm the award, both the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and Employee agree that no appeal shall be taken by either party from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any decision rendered in such action. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Solely for purposes of determining the allocation of the costs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in this subsection, the Administrator will be considered the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevailing party in a dispute if the arbitrator determines (1) that the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has not breached this Agreement and (2) the claim by Employee or his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary was not made in good faith. Otherwise, Employee or his or her \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary will be considered the prevailing party. In the event that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company is the prevailing party, the fee of the arbitrator and all necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses of the hearing (excluding any attorneys' fees incurred by the Company) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including stenographic reporter, if employed, shall be paid by the other party. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that Employee or his or her beneficiary is the prevailing party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the fee of the arbitrator and all necessary expenses of the hearing (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all attorneys' fees incurred by Employee or his or her beneficiary in pursuing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his or her claim), including the fees of a stenographic reporter if employed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be paid by the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. Collateral Security Assignment of Policy to the Company. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In consideration of the promises contained herein, the Employee has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemporaneously herewith granted the Security Interest in the Policy to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company as collateral, under the form of Collateral Security Assignment attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto as Exhibit A, which Collateral Security Assignment gives the Company the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited power to enforce its rights to recover the cash value of the Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the circumstances defined herein, or a portion of the death benefit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof. The Company's Security Interest in the Policy shall be specifically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to the rights set forth above in this Agreement, notwithstanding the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of any other documents including the Policy. Employee agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execute \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any notice prepared by the Company requesting a withdrawal or non-recourse loan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an amount equal to the amount to which the Company is entitled under Sections \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5, 6 or 12 of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. Employee's beneficiary rights and security interest. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Company and Employee intend that in no event shall the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have any power or interest related to the Policy or its proceeds, except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided herein and in the Collateral Security Assignment. In the event that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company ever receives or may be deemed to have received any right or interest in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Policy or its proceeds beyond the limited rights described herein and in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Collateral Security Assignment, such right or interest shall be held in trust \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the benefit of Employee and be held separate from the property of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In order to further protect the rights of the Employee, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees that its rights to the Policy and proceeds thereof shall serve as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security for the Company's obligations as provided in this Agreement to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee. The Company grants to Employee a security interest in and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collaterally assigns to Employee any and all rights the Company has in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy, and products and proceeds thereof whether now existing or hereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising pursuant to the provisions of the Policy, this Agreement, the Collateral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Assignment or otherwise, to secure any and all obligations owed by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company to Employee under this Agreement. In no event shall this provision be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpreted to reduce Employee's rights to the Policy or expand in any way the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights or benefits of the Company under this Agreement, the Policy or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Collateral Security Assignment. This security interest granted to Employee from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall automatically expire and be deemed waived if Employee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminates employment with Employer prior to a Qualifying Event. Nothing in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this provision shall prevent the Company from receiving its share of the death \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits under the Policy as provided in Section 4 of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. Amendment of Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as provided in a written instrument signed by the Company and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee, this Agreement may not be cancelled, amended, altered, or modified. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. Notice under Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any notice, consent, or demand required or permitted to be given under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement by one party to another shall be in writing, signed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the party giving or making it, and may be given either by delivering it to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other party personally or by mailing it, by United States \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certified mail, postage prepaid, to such party, addressed to its last known \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql address as shown on the records of the Company. The date of such mailing shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed the date of such mailed notice, consent, or demand. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. Binding Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement shall bind the parties hereto and their respective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors, heirs, executor, administrators, and transferees, and any Policy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19. Controlling law and characterization of Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) To the extent not governed by federal law, this Agreement and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to the parties hereunder shall be controlled by the laws of the State of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If this Agreement is considered a "plan" under the Employee Retirement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Income Security Act of 1974 (ERISA), both the Company and Employee acknowledge \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and agree that for all purposes the Agreement shall be treated as a "welfare \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan" within the meaning of section 3(1) of ERISA and that any rights that might \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arise under ERISA if this Agreement were treated as a "pension plan" within the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning of Section 3(2) of ERISA are hereby expressly waived. Consistent with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the preceding sentence, Employee further acknowledges that his or her rights to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Policy and the release of the Company's Security Interest are strictly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to those rights set forth in this Agreement. In furtherance of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledgement and in consideration of the Company's payment of the initial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premiums for this Policy, Employee voluntarily and irrevocably relinquishes and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waives any additional rights in the Policy or any different restrictions on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql release of the Company's Security Interest that he or she might otherwise argue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exist under either state, federal, or other law. Employee further agrees that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql he or she will not argue in any judicial or arbitration proceeding that any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional rights or different restrictions exist. Similarly, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledges that its Security Interest is strictly limited as set forth in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and voluntarily and irrevocably relinquishes and waives any additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest or different interest or advantages that the Company would have or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enjoy if the Agreement were not treated as a "welfare plan" within the meaning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 3(1) of ERISA. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. The Company and Employee agree to execute any and all documents \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to effectuate the terms of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EMPLOYEE ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________________ By: __________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Its __________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COLLATERAL SECURITY ASSIGNMENT AGREEMENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Collateral Security Assignment is made and entered into effective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of __________, 19__, by the undersigned as the owner (the "Owner") of Life \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Insurance Policy Number ______________ (the "Policy") issued by The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Manufacturers Life Insurance Company of America (the "Insurer") upon the life of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owner and by Advanced Micro Devices, Inc. a __________ corporation (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Assignee"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, the Owner is a valued employee of Assignee or a subsidiary of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee, and the Assignee wishes to retain him or her in its or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary's employ; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, to encourage the Owner's continued employment, the Assignee wishes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to pay premiums on the Policy, as more specifically provided for in that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain Split-Dollar Life Insurance Agreement dated as of ________________, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19__, and entered into between the Owner and the Assignee as such agreement may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be hereafter amended or modified (the "Agreement") (unless otherwise indicated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms herein shall have the definitions ascribed thereto in the Agreement); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, in consideration of the Assignee agreeing to make the premium \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments, the Owner agrees to grant the Assignee a security interest in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy as collateral security; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, the Owner and Assignee intend that the Assignee have no greater \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in the Policy than that prescribed herein and in the Agreement and that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the Assignee ever obtains any right or interest in the Policy or the proceeds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, except as provided herein and in the Agreement, such right or interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be held in trust for the Owner to satisfy the obligations of Assignee to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owner under the Agreement and the Assignee additionally agrees that its rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Policy shall serve as security for its obligations to the Owner under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOW, THEREFORE, the Owner hereby assigns, transfers and sets over to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee for security the following specific rights in the Policy, subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following terms, agreements and conditions: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. This Collateral Security Assignment is made, and the Policy is to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held, as collateral security for all liabilities of the Owner to the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the terms of the Agreement, whether now existing or hereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising (the "Secured Obligations"). The Secured Obligations include: (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation of the Owner to transfer an amount equal to the entire cash value in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event that the Owner terminates employment with Employer for a reason other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than a Qualifying Termination and before attaining his or her Security Release \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date; (ii) the obligation of the Owner to pay an amount of cash to Assignee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer to Assignee that portion of the cash value which is equal to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal, state or local taxes that Assignee may be required \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-1 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to withhold and collect (as set forth in Section 12 of the Agreement); and (iii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the obligation of the Owner to pay an amount of cash to the Company or transfer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company that portion of the cash surrender value of the Policy which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the sum of the outstanding balances on any loans made by Assignee to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Owner in the event of a Qualifying Event (as set forth in Section 5(c) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agreement; and (iv) the obligation of the Owner to name the Assignee as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary for a portion of the death benefit under the Policy in the event of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the death of the insured prior to Owner's termination of employment with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employer in accordance with Section 4 of the Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Owner hereby grants to Assignee a security interest in and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collaterally assigns to Assignee the Policy and the cash value to secure the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secured Obligations. However, the Assignee's interest in the Policy shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql strictly limited to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The right to be paid the Assignee's portion of the death benefit in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event of the death of the Owner prior to Owner's termination of employment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Employer in accordance with Section 4 of the Agreement; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The right to receive an amount equal to the entire cash value of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Policy (which right may be realized by Assignee's receiving a portion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql death benefit under the Policy or Owner's causing such amount to be transferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Assignee (through withdrawing from or borrowing against the Policy), in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the terms of the Agreement) if the Owner terminates employment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Employer for a reason other than a Qualifying Termination (unless he or she \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has previously attained his or her Security Release Date); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The right to receive an amount equal to the sum of the outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balances on any loans made by Assignee to the Owner in the event of a Qualifying \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event (as set forth in Section 5(c) of the Agreement); and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The right to receive an amount equal to any federal, state or local \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes that Assignee may be required to withhold and collect (as set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 12 of the Agreement). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. (a) Owner shall retain all incidents of ownership in the Policy, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may exercise such incidents of ownership except as otherwise limited by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and hereunder. The Insurer is only authorized to recognize (and is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully protected in recognizing) the exercise of any ownership rights by Owner if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Insurer determines that the Assignee has been given notice of Owner's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purported exercise of ownership rights in compliance with the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(b) hereof and as of the date thirty days after such notice is given, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Insurer has not received written notification from the Assignee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee's objection to such exercise; provided that, the designation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary to receive the death benefits not otherwise payable to Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 4 of the Agreement may be changed by the Owner without prior \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notification of Assignee. The Insurer shall not be responsible to ensure that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the actions of the Owner conform to the Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Assignee hereby acknowledges that for purposes of this Collateral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Assignment, Assignee shall be conclusively deemed to have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly notified of Owner's purported exercise of his or her ownership rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of the third business day following either of the following events: (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owner mails written notice of such exercise to Assignee by United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified mail, postage paid, at the address below and provides the Insurer with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a copy of such notice and a copy of the certified mail receipt or (2) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Insurer mails written notice of such exercise to Assignee by regular United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States mail, postage paid, at the address set forth below: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One AMD Place \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql M/S 181 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, California 94088 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Corporate Compensation Manager \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The foregoing address shall be the appropriate address for such notices to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sent unless and until the receipt by both Owner and the Insurer of a written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice from Assignee of a change in such address. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Notwithstanding the foregoing, Owner and Assignee hereby agree that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until Assignee's security interest in the Policy is released, Assignee shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time designate one or more individuals (the "Designee"), who may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers of Assignee, who shall be entitled to adjust the death benefit under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Policy and to direct the investments under the Policy; provided, however, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Designee may only increase, but not decrease, the death benefit in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect on the date that the Policy is issued; provided further, that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Designee may only direct the investments under the Policy in funds offered by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Insurer under the Policy. Assignee shall notify the Insurer in writing of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the identity of the Designee and any changes in the identity of the Designee. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Until Assignee's security interest in the Policy is released, no other party may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjust the death benefit or direct the investments under the Policy without the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the Assignee and the Owner. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. If the Policy is in the possession of the Assignee, the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, upon request, forward the Policy to the Insurer without unreasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delay for endorsement of any designation or change of beneficiary or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of any other right reserved by the Owner. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.(a) Assignee shall be entitled to exercise its rights under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement by delivering a written notice to Insurer, executed by the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Owner or the Owner's beneficiary, requesting either (1) a withdrawal or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nonrecourse policy \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql loan equal to the amount to which Assignee is entitled under Sections 5, 6 or 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Agreement and transfer of such withdrawn or borrowed amount to Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (2) the payment to the Assignee of that portion of the death benefit under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Policy to which the Assignee is entitled under Section 4 of the Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql So long as the notice is also signed by Owner or his or her beneficiary, Insurer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall pay or loan the specified amounts to Assignee without the need for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional documentation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Upon receipt of a properly executed notice complying with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of subsection (a) above, the Insurer is hereby authorized to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recognize the Assignee's claims to rights hereunder without the need for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional documentation and without investigating (1) the reason for such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action taken by the Assignee; (2) the validity or the amount of any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities of the Owner to the Assignee under the Agreement; (3) the existence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any default therein; (4) the giving of any notice required herein; or (5) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application to be made by the Assignee of any amounts to be paid to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee. The receipt of the Assignee for any sums received by it shall be a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full discharge and release therefor to the Insurer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Upon the full payment of the liabilities of the Owner to the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the Agreement, the Assignee shall execute an appropriate release of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Collateral Security Assignment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. The Assignee shall have the right to request of the Insurer and/or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Owner notice of any action taken with respect to the Policy by the Owner. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.(a) The Assignee and the Owner intend that in no event shall the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee have any power or interest related to the Policy or its proceeds, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as provided herein and in the Agreement, notwithstanding the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any other documents including the Policy. In the event that the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ever receives or may be deemed to have received any right or interest beyond the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited rights described herein and in the Agreement, such right or interest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be held in trust for the benefit of the Owner and be held separate from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property of the Assignee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In order to further protect the rights of the Owner, the Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees that its rights to the Policy and proceeds thereof shall serve as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql security for the Assignee's obligations to the Owner as provided in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. Assignee hereby grants to Owner a security interest in and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collaterally assigns to Owner any and all rights it has in the Policy, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products and proceeds thereof, whether now existing or hereafter arising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the provisions of the Policy, the Agreement, this Collateral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Assignment or otherwise, to secure Assignee's obligations ("Assignee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations") to Owner under the Agreement, whether now existing or hereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising. The Assignee Obligations include all obligations owed by the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee to Owner under the Agreement, including without limitation: (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to purchase the Policy designating Owner as the owner and to make the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql premium payments required under Section 3 of the Agreement and (ii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to do nothing which may, in any way, endanger, defeat or impair any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the rights of Owner in the Policy as provided in the Agreement. In no event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall this provision be interpreted to reduce Owner's rights in the Policy or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expand in any way the rights or benefits of the Assignee under the Agreement. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event that Owner terminates employment with Employer for any reason prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Qualifying Event, this security interest and collateral assignment granted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Assignee to Owner shall auto matically expire and be deemed waived. Nothing in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this provision shall prevent the Assignee from receiving its share of the death \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits under the Policy as provided in Section 4 of the Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Assignee and Owner agree to execute any documents necessary to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effectuate this Collateral Security Assignment pursuant to the provisions of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. All disputes shall be settled as provided in Section 13 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. The rights under this Collateral Security Assignment may be enforced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the terms of the Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the Owner and Assignee have executed this Collateral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Assignment effective the day and year first above written. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___________________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql , Owner \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: ______________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: ___________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A-5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPLIT-DOLLAR LIFE INSURANCE SECURITY RELEASE NOTICE \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the Split-Dollar Life Insurance Agreement entered into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between Advanced Micro Devices, Inc. ("the Company") and me as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ______________, 199__ (the "Agreement"), I hereby notify the Company that I \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request to be released on __________, ____ ("Security Release Date") from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's collateral security interest in Policy Number ________ issued by The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Manufacturers Life Insurance Company of America. I understand that my Security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Release Date must be at least two years from the date the Company receives this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notice. I also understand that my Security Release Date may be changed no more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than twice, and then only to a later date, not an earlier date, and that any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change in my Security Release Date must be made at least two years before the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date that would otherwise be my Security Release Date. I further understand that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order for the Company's collateral security interest to be released on my \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date, I must continue to be employed by the Employer (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in the Agreement) until such date. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ______________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date:_________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Received by the Company on _____________________________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by ______________________________________ \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPOUSAL CONSENT TO DESIGNATION OF NONSPOUSAL BENEFICIARY \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql My spouse is _____________________. I hereby consent to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designation made by my spouse of _______________________ as the beneficiary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (subject to any rights collaterally assigned to Advanced Micro Devices, Inc.) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Life Insurance Policy No. _________________ which Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc. has caused The Manufacturers Life Insurance Company of America to issue to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql him/her. I also understand that this consent is valid only with respect to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql naming of the beneficiary indicated above and that the designation of any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary will not be valid unless I consent in writing to such designation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This consent is being voluntarily given, and no undue influence or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coercion has been exercised in connection with my consent to the designation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made by my spouse of the beneficiary named above rather than myself as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beneficiary under the Split-Dollar Life Insurance Policy. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Spouse's Signature \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Print Spouse's Name \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date: ______________________________ \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NOTICE TO POSTPONE SPLIT-DOLLAR LIFE INSURANCE SECURITY RELEASE DATE \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First Election to Postpone Security Release Date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the Split-Dollar Life Insurance Agreement entered into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between Advanced Micro Devices (the "Company") and me as of ____________ (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Agreement"), I hereby notify the Company that I request to postpone my initial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date from ____________, _______ until ___________, _____ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Security Release Date"). I understand that this first election to postpone \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must be received by the Company at least two years prior to the date which would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise constitute my Security Release Date. I further understand that in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order for the Company's collateral security interest to be released on my \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date as postponed, I must continue to be employed by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or one of it subsidiaries until such date. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________________________________ _______________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant Date \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Received by Advanced Micro Devices \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on __________________________ By ___________________________________ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Second Election to Postpone Security Release Date. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the Split-Dollar Life Insurance Agreement entered into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between Advanced Micro Devices (the "Company") and me as of __________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Agreement"), I hereby notify the Company that I request to further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postpone by Security Release Date from ____________________, _____ until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___________________, _____. I understand that this second election to postpone \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must be received by the Company at least two years prior to the date which would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise constitute my Security Release Date. I further understand that in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order for the Company's collateral security interest to be released on my \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Security Release Date as postponed, I must continue to be employed by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or one of its subsidiaries until such date. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________________________________ _______________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant Date \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Received by Advanced Micro Devices \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on ___________________ By ____________________________________________ \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_10}{\*\bkmkend doc_1_10} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.35 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN DELETED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REQUEST FOR CONFIDENTIAL TREATMENT. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMPAQ COMPUTER CORPORATION/ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Agreement ("Agreement"), effective as of January 1, 1994 (Effective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date), is made by Compaq Computer Corporation ("Compaq") and Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. ("AMD"). The terms and conditions contained in this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall govern the purchase and sale of Product specified on purchase orders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued by Compaq. For purposes of this Agreement, Product shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current or future microprocessors that are Microsoft Windows Compatible and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Microsoft Windows Compatible follow-ons thereto that AMD either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently makes available or plans to make available to any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. Microprocessors that are Microsoft Windows Compatible shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include AMD's current 80X86 microprocessor family, and/or future derivatives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, including any future derivative microprocessors that are based on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar architecture. Product shall not include any of AMD's custom or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customer specific products (Custom Products). Custom Products shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product that: (i) contains significant functional differences from Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sold by AMD, and (ii) is sold to only one customer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. INTENT AND ROAD MAP MEETINGS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Compaq intends to enter into a long-term relationship with AMD. As such, AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is willing to cooperate with Compaq to further mutual long-term goals by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sharing Product road map and technology directions. During the term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, the parties agree to meet at least on a quarterly basis to review \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's Product road map (excluding Custom Products) and technology directions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Road Map Meeting). The topics discussed shall include Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications, anticipated prices, existing and planned capacity, projected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules and availability dates. Compaq shall provide feedback to AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regarding those items in AMD's Product road map which may be of interest to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq based on Compaq's product plans. Compaq may disclose to AMD those \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products in Compaq's road map which Compaq believes will pertain to AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] On an ongoing basis, Compaq may provide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD with input on the specifications of AMD's future Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq also expects that AMD will cooperate to achieve Compaq's long-term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql program goals such as shortening Product lead-times, increasing volume \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flexibility, achieving Just-in-Time delivery at all of Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing sites, achieving ongoing cost reductions and specific quality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql goals, and continuous quality improvement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Unless expressly stated otherwise for a particular Product, this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not a requirements contract and does not obligate Compaq to purchase any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql minimum quantity of Product but only establishes the terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for such purchases if and when they occur. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. PURCHASE ORDERS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Compaq will purchase Products only by issuing purchase orders ("Order or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders") to AMD. Orders shall contain such things as quantity, price, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desired delivery date, part number, and revision level. Compaq shall make \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercially reasonable efforts to send written confirmation (except by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mutual agreement) of Orders within one (1) week after issuance. AMD shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sign and return the acknowledgment copy of the Order within five (5) \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after receipt. If AMD fails to return the acknowledgment, AMD will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to have accepted any Order which conforms with the terms of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. Acceptance by AMD is limited to the terms of Compaq's offer as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in this Agreement and the Order. No additional or different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions proposed by AMD shall apply unless expressly agreed to in writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Compaq. Compaq hereby gives notice of its objection to any additional or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql different terms. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. AMD agrees that all Compaq sites, and subsidiaries, wherever located, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be entitled to make purchases under this Agreement. In addition, at Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request, AMD agrees to drop ship Product to Compaq's subcontractors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. EARLY PRODUCTION PRODUCT AND TESTING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD agrees to provide Compaq with prototypes and early production samples of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product for all new Products that Compaq notifies AMD it wishes to receive. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD shall use reasonable efforts to provide such prototypes and samples to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq as soon as they become available, and [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq will use reasonable efforts to evaluate and test such prototypes and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql early production samples of Product received from AMD and provide AMD with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql feedback regarding Compaq's test results. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. TERM OF AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The term of this Agreement shall be for [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] (Term), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencing on the Effective Date, unless extended pursuant to Section 4.B. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or 4.C. below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The Term of this Agreement may be [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE] extended for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION]: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. This Agreement shall be automatically renewed at the conclusion of the Term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for successive [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] periods unless one of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicates by written notice to the other party not less than [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] prior to the end of the Term that it does not intend to renew \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Agreement. Notwithstanding the foregoing, the Agreement shall remain in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full force and effect and shall be applicable to any Order(s) issued by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq to AMD during the Term of this Agreement until any and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of the parties under such Order(s) have been fulfilled. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] PRODUCT & NEW CAPACITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD shall offer for purchase by Compaq all new Products that AMD markets or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intends to market. AMD agrees that Compaq shall have the [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] made available by AMD, except for [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are equivalent in form, fit, function and performance to products from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other third party suppliers and such third party suppliers' products are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used in computer systems which are generally available in the marketplace \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Equivalent Products"). For each Product that Compaq [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION], AMD agrees that each such Product will include any similar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product which does not have significant functional or performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql differences. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The parties agree to negotiate a separate agreement for any co-developed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product, and any exclusivity benefits desired by Compaq will be as set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such separate agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For Equivalent Product, Compaq will be entitled, for a period or six (6) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months following first production shipment of such Equivalent Product, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. If, at any time during the [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of a particular \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product, a third party ships a product such that AMD's Product now can be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classified as an Equivalent Product, then AMD may, at its option, and upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice to Compaq, immediately terminate Compaq's [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] for that particular Product, except that Compaq shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to the [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] for a period of six (6) months from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date that Compaq's [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. AMD shall notify Compaq if and when AMD builds or obtains new or additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production capacity so that Compaq may, at its option elect to forecast (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shown in Exhibit A) and/or order more Product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. PRICING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] days prior to the end of the then-current quarter, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq and AMD shall meet to review pricing for the following quarter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Pricing Meeting). At the Pricing Meeting, Compaq and AMD shall agree on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price for Product \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the following quarter, subject to the conditions specified in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6. In addition, Compaq and AMD will, by mutual agreement, review and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql update Buyer's forecast and [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] as shown in Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Prices shall include all charges such as packaging, packing, crating, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql storage, forwarding agent or brokerage fees, document fees and duties. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Prices shall also include any and all sales, use, excise and similar taxes. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq shall not accept Product at any price above that indicated on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Order. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD acknowledges that [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION], AMD represents that, subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to this Section 6, the [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD may, upon reasonable notice to Compaq, appoint an independent auditor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review Compaq's records to determine if Compaq has [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified herein. Compaq shall allow such independent auditor access to all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable records of Compaq for the purpose of conducting such audit. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independent auditor shall only report to AMD whether Compaq has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION], as the case may be. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. Compaq may, upon reasonable notice to AMD, appoint an independent auditor to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql review AMD's records to determine if Compaq is receiving pricing as agreed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to hereunder and that AMD is complying with the terms of this Agreement. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall allow such independent auditor access to all applicable records of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the purpose of conducting such audit. The independent auditor shall only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql report to Compaq whether AMD is complying with the terms of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Compaq shall be entitled to purchase Product from AMD at an Effective Price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] equal to the lesser of: (i) the [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. AMD shall maintain a vigorous cost reduction program to ensure that pricing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is competitive at all times. In the event that Compaq does not consider \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's pricing aggressive relative to the market, Compaq shall have the right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to request an immediate meeting with AMD to renegotiate pricing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql J. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql K. AMD may wish to obtain additional capacity from one or more foundries, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it may be necessary, as part of AMD's agreement with such foundries, for AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to permit the foundries to internally consume certain quantities of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] Product which is the same or similar to Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Compaq is entitled to purchase. Compaq agrees that AMD may permit such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundries to internally consume up to 135,000 units of Product per year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (aggregate for all foundries) without any requirement by AMD to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] pursuant to Section 6.C above because of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangements with such foundries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that AMD's arrangements with such foundries permits such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundries to internally consume Product in quantities greater than 135,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in 1994, Compaq shall be entitled to purchase from AMD an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the quantities above 135,000 per year that such foundries are internally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consuming, at [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION]. If Compaq is not purchasing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products comparable to those that the foundries are consuming internally, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq will be eligible for a [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the nearest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comparable Product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that AMD's arrangement with such foundries permits such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundries to internally consume Product in quantities greater than 135,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in 1995 and 1996, Compaq shall be entitled to purchase from AMD: (i) an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the quantities above 135,000 per year and less than 270,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql per year that such foundries are internally consuming at a [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] Compaq is otherwise [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql L. As specified in Section 7.E. below and Exhibit D, AMD agrees to have certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql backup capacity available to Compaq for quantities over and above forecasted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quantities as specified in Exhibit A. In the event that Compaq utilizes the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql backup capacity, the following prices apply. For the first [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] Product purchased from the backup capacity [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql M. Compaq agrees that Product purchased under this Agreement will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated into Compaq's products except that Compaq may sell Product to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its distributors and end-users for use as replacement parts, upgrades parts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or spare parts. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql N. AMD agrees that Compaq will be [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] relative to any \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of it's other customers with respect to [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. DELIVERY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Compaq's Order shall state delivery dates for Product delivery by AMD on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committed date and shall be considered to be of equal importance as quality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and price in meeting Compaq's requirements. Delivery performance shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql measured by on-dock date at Compaq's specified ship-to location. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represents and warrants that it will use its best efforts to at all times \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meet the delivery dates for Products on the committed delivery date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. All sales are F.O.B. Point of Shipment. Title and risk of loss shall pass to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq upon AMD's delivery of Product purchased hereunder to carrier \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized by Compaq. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. If AMD delivers Product more than three (3) days in advance of the specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery date, Compaq may either return such Product at AMD's risk and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense for subsequent delivery on the specified delivery date or retain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such material and make payment when it would have been due based on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified delivery date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Changes to delivery dates may only be made by Compaq's authorized purchasing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives. All other schedule changes are at AMD's risk. Compaq may, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without cost or liability, issue change requests for Product quantities and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedule dates in accordance with the Flexibility Agreement attached as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit D ("Flexibility Agreement"). Written confirmation will be sent by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD to Compaq within two (2) work days of receiving such change request, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq shall provide a confirming Order change within ten (10) working days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of receiving AMD's confirmation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. In addition, AMD agrees to have available backup capacity as specified in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit D. The quarterly backup capacity quantities specified in Exhibit D \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represent Compaq's backup requirements for each quarter. The amounts listed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for each quarter may be divided equally over the thirteen (13) weeks in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql particular quarter. AMD agrees to supply such quantities in the quarter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicated upon eight (8) weeks written notice from Compaq of the need for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the particular Product. In the event that Compaq does not need the backup \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capacity indicated above for a particular Product and quarter, Compaq will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lose that backup capacity. In the event that AMD is unable to supply the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql backup capacity for a particular Product and quarter, Compaq may increase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the backup capacity on another Product by the amount that AMD is unable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supply. Compaq and AMD shall update the quarterly backup capacity amounts on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a rolling quarterly basis through 4Q95. Unless otherwise agreed to in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing, the backup capacity amounts for 1995 shall be a minimum of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] per quarter. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. AMD shall notify Compaq in writing immediately if AMD has knowledge of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql impending material shortage, labor dispute, or other event which could \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result in any change to the agreed delivery plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. In the event that Product scheduled for delivery is more than one (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business day late, Compaq may request such Product to be shipped and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered via a different mode of transportation. In such event, AMD agrees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to pay or reimburse Compaq for all transportation charges in excess of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql normal charges. Compaq agrees to discuss with AMD mutually acceptable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternatives that might be available for securing substitute for Product. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq agrees to attempt, with AMD's assistance, and as time allows, to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product from AMD's authorized distributors at no additional charge to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq. Compaq also agrees to make reasonable attempts to adjust orders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql placed with other third party vendors and/or adjust Compaq production \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules before incurring additional reprocurement costs. If Compaq cannot \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain Product in a timely fashion from AMD or AMD's authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distributors, then, Compaq may purchase substitute for Product elsewhere. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Without affecting other remedies Compaq may have, Compaq may [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. PACKING, MARKING, AND SHIPPING INSTRUCTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. All Product shall be prepared and packed in a commercially reasonably manner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so as to secure the lowest transportation rates and meet carrier's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements or those set forth in the Product specification attached as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit B ("Specification"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Each shipping container shall be marked to show Compaq's Order number, part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number, revision level, lot number, and quantity contained therein. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql packing list showing the Order number shall be included in each container. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD agrees to standardize the count multiples used in shipments so that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq can verify the quantity of each shipment. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. QUALITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD agrees to use its best efforts to deliver defect-free materials to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq at all times. AMD shall establish and/or maintain a quality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvement plan acceptable to Compaq. AMD's Quality Improvement Plan is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached to this Agreement as Exhibit C ("Quality Plan"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. At Compaq's request, AMD will facilitate on-site visits and inspections by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq. Such inspections shall take place during normal business hours at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's facilities. AMD shall, as far as reasonably practicable, assist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's personnel in the conduct of this inspection. Compaq's inspections \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall in no way relieve AMD of its obligation to deliver conforming Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or waive Compaq's right of inspection and acceptance at the time the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products are delivered. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD agrees to provide relevant outgoing inspection, quality, and reliability \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data upon Compaq's request. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. AMD agrees to conform to the revision level stated on Compaq's Order. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. AMD agrees to advise Compaq of any changes to process, materials, or sources \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of supply and ensure that such changes do not compromise specifications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quality, or reliability of Products ordered by Compaq. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. INSPECTION AND ACCEPTANCE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Products purchased pursuant to this Agreement shall be subject to inspection \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and test by Compaq at all times and places, including the period of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture or development. Unless otherwise specified in the Order, final \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inspection and acceptance of Product by Compaq shall be at Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities. Compaq reserves the right to reject Product which does not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conform to the specifications, drawings, samples or other descriptions \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified by Compaq. Compaq shall contact AMD to discuss mutually acceptable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies for defective or non-conforming Product provided however that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ultimately, Compaq may, at its option, either return defective or non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conforming Product for full credit of the purchase price plus any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transportation charges paid by Compaq, or require prompt correction or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacement of defective or non-conforming Product, which rights shall be in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition to such other rights as Compaq may have in law or under any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. Return to AMD of any non-conforming or defective Product shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at AMD's expense and no replacements shall be made unless specified by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq. Product required to be corrected or replaced shall be subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same inspection and warranty provisions of this Agreement as Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally delivered under any Order. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. In the event Compaq returns Product back to AMD for correction or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacement, AMD shall use its best efforts to repair or replace all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defective Product within five (5) days of receipt of such Product. AMD will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue a "Return Material Authorization" within twenty-four (24) hours of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of notification by Compaq of defective Product. AMD shall bear all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql risk and costs such as, material, sorting (provided Compaq notifies AMD of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the anticipated sorting costs) and shipping to and from Compaq's facilities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If Compaq incurs any such costs, it may either receive them directly from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD or set-off via a credit note any amounts due to AMD. AMD agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide failure analysis of rejected material within five (5) days after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of such rejected materials. AMD will also provide a written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corrective action report addressing the steps that will be taken to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminate the cause of the problem. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Upon notification of rejection, Compaq will advise AMD of the reason for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rejection. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. WARRANTY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD warrants that title to all Products delivered to Compaq under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall be free and clear of all liens, encumbrances, security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests or other claims and that for a period of three (3) years from date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of acceptance of material by Compaq, all Product shall be free from defects \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in material, workmanship, and design. AMD further warrants that all Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall conform to applicable specifications, drawings, samples, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql descriptions referred to in this Agreement. The warranty for replaced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product will be the same as the original Product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Defective material discovered during Compaq's manufacturing or assembly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processes are not considered to be a warranty repair and shall be corrected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with Section 10.B. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD agrees that in case of epidemic failure (greater than 2% failure for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same cause in any six (6) month period), AMD shall provide correction or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql replacement in accordance with Section 10.B. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Except as expressly provided in this Section 11 and Section 19, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties, express or implied, statutory or otherwise, are made with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Product delivered by AMD to Compaq under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Compaq's obligations under this Section shall be as follows: (i) Compaq \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall notify AMD either in writing or orally of defects or non-conformity in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any unit of Product for which Compaq wishes to make a warranty claim; (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq will obtain authorization from AMD to return such Product; (iii) such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product will be returned to AMD, transportation costs paid by AMD, F.O.B. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Point of Shipment, in accordance with AMD's customer Product return \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guidelines; and (iv) AMD's examination of returned Product must disclose to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction that such alleged defect or non-conformity actually existed and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was not caused by negligence, misuse, improper installation, accident, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unauthorized repair. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Except as set forth specifically in Section 19, this warranty is in lieu of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all other warranties, expressed or implied, including the implied warranty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of fitness for a particular purpose, the implied warranty of merchantability \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and of all other warranty obligations or liabilities on AMD's part and it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither assumes nor authorizes any other person to assume for AMD any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liabilities. The foregoing constitutes Compaq's sole and exclusive remedy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the furnishing of defective or non-conforming Product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. PAYMENT AND SET-OFF \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Compaq shall issue payment for Product delivered by AMD under individual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders. Terms of payment shall be net [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] days from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of AMD's invoice, provided that Product has been received by Compaq. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Payment of invoices shall not constitute final acceptance of the Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Invoices and shall be subject to adjustment for errors, shortages, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defects. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Amounts owed to Compaq due to rejections of Product or discrepancies on paid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invoices will be, at Compaq's option, fully credited against future invoices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable by AMD's receipt of a debit memo, or other written request for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment from Compaq. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Unless otherwise specified in Exhibit A or agreed to in writing by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties, payment shall be in U.S. dollars. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. CHANGES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Compaq may from time to time change the specifications for the Products, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD agrees to make best efforts to comply with such changes. If such changes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result in a change in AMD's costs or in the time for performance, an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment in price and time for performance will be made by the parties in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing, provided, however, that AMD shall request such an adjustment within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ten (10) days of receipt by AMD of the notice of such changes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. No changes shall be made by AMD in the form, fit, or function of Products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchased hereunder without AMD providing Compaq at least ninety (90) days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior written notice, or as soon as possible if AMD is not reasonably able \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to provide ninety (90) days prior notice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. TERMINATION FOR CAUSE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD may terminate this Agreement and/or any Order issued hereunder at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time by written notice in the event Compaq: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Fails to comply with any material provision of this Agreement or any Order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued hereunder, and, in the case of a breach which is capable of remedy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fails to remedy same within thirty (30) days of notification of said breach; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Becomes insolvent or makes an assignment for the benefit of creditors, or a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiver or similar officer is appointed to take charge of all or a part of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's assets and such condition is not cured within thirty (30) days; or \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Assigns or attempts to assign, or subcontracts or attempts to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subcontract, any or all of its rights or obligations under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or any Orders issued hereunder to a third party without AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior written approval, which approval shall not be unreasonably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Compaq may terminate this Agreement and/or any Order issued hereunder at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time by written notice in the event AMD: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Fails to comply with any material provision of this Agreement or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Order issued hereunder, and in the case of a breach which is capable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of remedy, fails to remedy same within thirty (30) days of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notification of said breach, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Becomes insolvent or makes an assignment for the benefit of creditors, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or a receiver or similar officer is appointed to take charge of all or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a part of AMD's assets and such condition is not cured within thirty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (30) days, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Assigns or attempts to assign, or subcontracts or attempts to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subcontract, any or all of its rights or obligations under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or any Orders issued hereunder to a third party without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's prior written approval. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Upon termination of the Agreement and/or any Order issued hereunder: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Compaq shall have the option to purchase any materials or work in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql progress which AMD may have purchased or processed for the fulfillment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any Order at AMD's cost plus a reasonable amount for any value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql already added by AMD, \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Compaq shall have no liability beyond payment for any balance due for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products delivered by AMD before notice of termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. LIMITATION OF LIABILITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. EXCEPT FOR A BREACH OF SECTION 19, 25 OR 26 OF THIS AGREEMENT, NEITHER PARTY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SHALL BE LIABLE FOR ANY CONSEQUENTIAL (INCLUDING, WITHOUT LIMITATION, LOST \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROFITS, UNLIQUIDATED INVENTORY, ETC.), INCIDENTAL, INDIRECT, SPECIAL, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE POSSIBILITY OF SUCH DAMAGES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. FORCE MAJEURE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Neither party shall be liable for its failure to perform any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations hereunder during any period in which such performance is delayed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by fire, flood, war, embargo, riot or the intervention of any government \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority ("Force Majeure"), provided that the party suffering such delay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately notifies the other party of the delay. If, however, AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance is delayed for reasons set forth above for a cumulative period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of fourteen (14) calendar days or more , Compaq, notwithstanding any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Agreement to the contrary, may terminate this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or any Order issued hereunder by notice to AMD. In the event of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination, Compaq's sole liability hereunder will be for the payment to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD of any balance due and owing for conforming Product delivered by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to AMD's notification of delay to Compaq. In the event the parties do \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not terminate this Agreement and/or Order due to a Force Majeure, the time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for performance or cure will be extended for a period equal to the duration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Force Majeure. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. PRODUCT NOTICES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any notice given under this Agreement shall be in writing and will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective when delivered personally or deposited in the mail, postage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepaid and addressed to the parties at their respective addresses set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below, or at any new address subsequently designated in writing by either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party to the other: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to AMD: If to Compaq: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. COMPAQ COMPUTER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20333 SH 249 CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Suite 525 P.O. Box 692000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Houston, TX 77070 MS070202 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTN: Sales Manager Houston, TX 77269-2000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTN.: Ken Chen \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: with a copy to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. COMPAQ COMPUTER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One AMD Place CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mail Stop 68 P.O. Box 692000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3456 MS060803 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTN: Legal Department Houston, TX 77269-2000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTN.:Legal Department \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. COMPLIANCE WITH LAWS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. All Product supplied and work performed under this Agreement shall comply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with all applicable laws and regulations in effect. In particular, AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees that its performance under this Agreement shall comply with all laws \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governing its relationship with its employees, agents or subcontractors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the chlorofluorocarbon labeling requirements of the U.S. Clean Air Act \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of 1990. Upon request, AMD agrees to certify compliance with such applicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws and regulations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19. INTELLECTUAL PROPERTY WARRANTY AND INDEMNITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD warrants that, to the best of its knowledge and belief, the Products do \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not infringe any patent [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], copyright, mask \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql work right, trademark, trade secret or any other intellectual property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights (collectively referred to as "IPR") of any third party. AMD further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warrants that to the best of its knowledge and belief, Compaq's use of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products for its intended purpose (including but not limited to combinations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of said Products with other devices or elements) do not infringe any IPR of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any third party. The parties recognize that [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are currently pending resolution before a court. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Except as limited elsewhere in this Section 19, AMD warrants that it will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defend, at its expense, any claim, suit or proceeding ("legal action") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql brought against Compaq alleging either, (i) infringement by the Product of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any IPR of a third party; and/or (ii) infringement by Compaq's use of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product for its intended purpose (including but not limited to [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. AMD further warrants that it will indemnify \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and hold Compaq harmless from any and all costs, expenses and damages \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suffered by Compaq in connection with legal action, resulting from a claim \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against Compaq [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] of (i) infringement by the Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any IPR of any third party; and/or (ii) infringement by Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] use of the Product for its intended purpose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including but not limited to [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], provided AMD is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly notified in writing of such legal action and given the option to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take sole control, at AMD's expense, of the defense of such legal action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including any settlement negotiations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition to the above, AMD warrants that it will assist and reimburse \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq in the amount equal to [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] in the defense of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any legal action brought against Compaq alleging infringement by Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] use of the Product for its intended purpose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including but not limited to [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of any IPR of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION]. AMD further warrants that it will indemnify Compaq \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and hold Compaq harmless from [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of any costs, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses and damages suffered by Compaq in connection with legal action, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting from a claim against Compaq [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql infringement by Compaq's [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] use of Product for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its intended purpose (including but not limited to [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any IPR [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]. AMD shall not be liable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION], however, for any costs, expenses or damages from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such legal action relating to or resulting from Compaq's use of products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained from vendors other than [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. Compaq agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly notify AMD in writing of such legal action. The parties agree that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq shall have sole control of the defense of such legal action including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any settlement negotiations. Compaq may not enter into any settlement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such legal action without the prior written consent of AMD, which consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be unreasonably withheld. Compaq agrees to keep AMD informed of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the status of such defense, including, but not limited to, the expenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql associated with such defense. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Without prejudice to the foregoing warranty and indemnity, in case any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Products are held to constitute such infringement and the use of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product(s) is enjoined, AMD shall at its discretion and expense, either (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procure for Compaq the right to continue using the Product, (ii) modify such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product so that it becomes non-infringing without adversely affecting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's specifications or requiring changes in the circuitry of Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment where such Product is used and provide Compaq with such non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql infringing Products in exchange for the infringing Products or if (i) or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) are not possible, then (iii) \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remove such Product and refund the purchase price and transportation costs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Products and reimburse Compaq for its reasonable expenses incurred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in procuring substitute product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. No rights to Compaq's or AMD's trademarks, trade names or brand names are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conferred, either expressly or by implication. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. AMD represents and warrants that it will not assert any claim or action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against Compaq or it's customers that Compaq's or its customers' use of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product for its intended purpose infringes any IPR of AMD, and AMD hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grants Compaq and its customers, mediate and immediate, an immunity from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such claim or action. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Except for the rights specifically set forth elsewhere in Section 19 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 20, the sale of Products by AMD does not convey any license by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql implication, estoppel, or otherwise, under any patent claims covering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combinations of said Products with other devices or elements, or the process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or method of making such Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. Compaq shall defend, at its expense, AMD from any claims resulting from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance of Products with Compaq's designs or custom specifications that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are implemented by AMD as specified by Compaq if such Compaq specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql implementation resulted in the claim of infringement of any patent, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyright, trademark, or other proprietary right of a third party, and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay all costs and damages awarded against AMD provided that Compaq is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly notified in writing and given authority, information and assistance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (at Compaq's expense) for the defense and compromise of same with counsel of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's choice. The foregoing states the entire liability of Compaq for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql infringement of patent, copyright, trademark, or other proprietary rights of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a third party. The foregoing obligation shall only apply to such Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is sold to Compaq and shall not apply to any of such Product that AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may sell to any of its other customers. In addition, the foregoing shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apply to situations where the Compaq specified implementation was a result \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of AMD's failure to provide Product that has full Microsoft Windows \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compatibility and Socket Compatibility. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. If, as a result of and in the performance of AMD's obligations under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 19, AMD's [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] such that AMD determines that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it is no longer [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION], then AMD may [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] by giving written notice to Compaq [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the date of termination, provided that such notice may be given no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] following the Effective Date of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21. SPARES AVAILABILITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Except where AMD has discontinued manufacture of Product as specified below \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 21.B, AMD shall make available for purchase by Compaq replacement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products ("Spares"). Spares shall be available for purchase at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] after delivery of the last shipment of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product. Spares shall be of the latest revision. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. AMD shall provide Compaq at least six (6) months written notice ("Notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period") that the manufacture of any Product will be discontinued by AMD. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq may place Orders for such Product during the Notice Period at prices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in this Agreement, and AMD shall deliver Product against such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders even if the Notice Period extends beyond the Term of this Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq must take final delivery of this Product within [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] of the initial formal notification. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22. CAPACITY PLANNING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD agrees to review forecasts provided by Compaq and advise Compaq if AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anticipates that he will be unable to achieve the requested volumes. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq's volume forecasts will be provided to AMD in accordance with Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD may from time to time request Compaq to review Compaq's forecast and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advise of any changes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23. GRATUITIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Each party represents that it has not offered nor given and will not offer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nor give any employee, agent, or representative of the other party any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gratuity with a view toward securing any business from the other party or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql influencing such person with respect to the business between the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. INSURANCE AND STATUTORY OBLIGATIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. If AMD's work under this Agreement or Orders issued hereunder require access \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD to any of Compaq's premises or the premises of any of Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers or any location where Compaq conducts business, or with material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or equipment furnished by Compaq, AMD shall take all necessary precautions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to prevent the occurrence of any injury to persons or property during the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql progress of such work and except to the extent that such injury is due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql solely and directly to Compaq's acts or negligence, AMD shall indemnify \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Compaq against all loss which may result in any way from any act or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negligence of AMD, its employees, servants, agents or subcontractors, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD shall maintain such insurance as shall protect Compaq from said risks \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and from any statutory liabilities whatsoever arising therefrom and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide evidence of such insurance to Compaq upon request. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25. INDEMNIFICATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD agrees to protect, defend, indemnify and save Compaq harmless from all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sums, costs and expense which Compaq may incur or be obliged to pay as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of any and all loss, expense, damage, liability, claims, demands, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either at law or in equity, of every nature whatsoever in favor of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person, including both AMD's and Compaq's employees, resulting from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal injury or death caused by the use of any Product sold to Compaq by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD hereunder, but AMD shall be so liable only to the extent required by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable law and only where such claims, expenses, damages, or demands are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by a court of law to be the result of Products provided by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26. CONFIDENTIAL INFORMATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Each party recognizes that it may have previously entered or will in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql future enter into various agreements with the other party which obligates it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to maintain as confidential certain information disclosed to it by the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. To the extent that such information or any further confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information (collectively referred to hereinafter as "Information") is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosed in furtherance of this Agreement or any Order issued hereunder, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Information shall be so disclosed pursuant to the minimum terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions listed below; provided, however, such minimum terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions listed below shall in no way relieve the parties from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation or modify such obligations previously agreed to in such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements. Both parties agree that this Agreement and such other agreements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall hereafter be considered as coterminous, and shall expire no earlier \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the date of expiration or termination of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Information disclosed that is considered in good faith by the disclosing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party as confidential and/or proprietary shall be clearly marked as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Confidential" or "Proprietary". Information not easily marked, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information orally disclosed, shall be summarized in writing and designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential by the disclosing party within thirty (30) days of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Both parties agree that the party receiving Information will maintain such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information in confidence for a period of [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of disclosure of such Information. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Each party shall protect the other party's Information to the same extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that it protects it own confidential and proprietary information and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take all reasonable precautions to prevent unauthorized disclosure to third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The parties acknowledge that the unauthorized disclosure of such Information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will cause irreparable harm. Accordingly, the parties agree that the injured \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall have the right to seek immediate injunctive relief enjoining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such unauthorized disclosure. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. This provision shall not apply to information (1) known to the receiving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party at the time of receipt from the other party, (2) generally known or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available to the public through no act or failure to act by the receiving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, (3) furnished to third parties by the disclosing party without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restriction or disclosure, (4) furnished to the receiving party by a third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party as a matter of right and without restriction on disclosure, or (5) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is independently developed by the recipient. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. Immediately upon termination of this Agreement or at the request of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party, each of the parties shall promptly return all materials in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possession containing Information of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27. COUNTRY OF ORIGIN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A For each Product purchased under this Agreement, AMD shall furnish Compaq \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with country of origin (manufacture), by quantity and part number (Compaq's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and AMD's) if necessary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. AMD agrees to provide necessary export documents and to facilitate export of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product. AMD further agrees to assist Compaq's import of Product as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably requested by Compaq. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28. PROPERTY FURNISHED BY BUYER \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any tools, drawings, specifications, or other materials furnished by Compaq \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for use by AMD in its performance under this Agreement or any Order issued \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall be identified and shall remain the property of Compaq and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be used by AMD only in its performance hereunder. Such property shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be delivered, upon request, to destination specified by Compaq in good \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition, except for normal wear and tear. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29. GENERAL \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any obligations and duties which by their nature extend beyond the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration or earlier termination of this Agreement shall survive any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration or termination and remain in effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. If any provision or provisions of this Agreement shall be held to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invalid, illegal or unenforceable, such provision shall be enforced to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fullest extent permitted by applicable law and the validity, legality and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforceability of the remaining provisions shall not in any way be affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or impaired thereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. No action, except those regarding claims by third parties, or claims with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to patents, copyrights, trademarks or trade names or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unauthorized disclosure of Confidential Information, regardless of form, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arising out of this Agreement may be brought by either party more than two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) years after the cause of action has arisen, or, in the case of non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment, more than two (2) years from the date the payment was due. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Any waiver of any kind by a party of a breach of this Agreement must be in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing, shall be effective only to the extent set forth in such writing and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not operate or be construed as a waiver of any subsequent breach. Any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delay or omission in exercising any right, power or remedy pursuant to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach or default by a party shall not impair any right, power or remedy \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which either party may have with respect to a future breach or default. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Each party hereby gives its assurance to the other party that it shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql export, re-export or otherwise disclose, directly or indirectly, technical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data received from the other party or the direct product of such technical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data to any person or destination when such export, re-export or disclosure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is prohibited by the laws of the United States or regulations of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Department of the United States. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The parties have requested that this Agreement and the documents relating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto be drawn up in the English language. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. This Agreement is confidential to both parties. Neither party shall disclose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the existence of this Agreement to the public or any third party without the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior written approval of both parties. Any public announcements or press \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql releases which relate to or reference this Agreement require the prior \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written approval of both parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. The entire Agreement between the parties is incorporated in this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Appendices attached hereto, and it supersedes all prior discussions and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements between the parties relating to the subject matter hereof. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement can be modified only by a written amendment duly signed by persons \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized to sign agreements on behalf of both parties, and shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplemented or modified by any course of dealing or trade usage. Variance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the terms and conditions of this Agreement in any Order, or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notification from AMD or Compaq will be of no effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. The construction, validity, and performance of this Agreement and any Order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued under it shall be governed by the laws of the state of Texas, U.S.A. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, THE AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS AGREEMENT. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For Compaq For AMD \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Eckhard Pfeiffer 1/26/94 /s/ W.J. Sanders III 1/24/94 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----------------------------- ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature (date) Signature (date) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Eckhard Pfeiffer W.J. Sanders III \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ----------------------------------- ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name Name \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql President and CEO Chairman and CEO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - -------------------------------- ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Title \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORECAST & [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. FORECAST \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION 1Q94 2Q94 3Q94 4Q94 Total \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product Requirements: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Compaq and AMD will work together to ensure mutually agreeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conversions [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] functionality and [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] functionality on all [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. It is expected that [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] and have [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Full Microsoft Windows Compatibility and [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. All DX microprocessors above [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] require \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] write back cache. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Int. Core Ext. Bus 1Q94 2Q94 Jly-Aug Sep-Dec \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ** AMD reserves the right to ship Sept.-Dec. production of [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] quantities in [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] provided sufficient \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice is given to Compaq. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIFICATION \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD agrees that all Product shall conform to the applicable specification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the Product. Compaq shall provide AMD with the applicable specification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and part number for the Product prior to issuing Orders for such Product. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUALITY AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD and Compaq will work together to ensure that AMD's quality process is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capable of mass production of Product in accordance with Compaq's World \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Class Supplier Process(W.C.S.P.) specification, to assure cost, delivery and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flexibility. \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I. PURCHASE ORDERS [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following changes to [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] on existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase orders may be made without cost or liability to Compaq. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER OF WEEKS PRIOR % INCREASE % DECREASE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1H94 2H94 1995 & after 1H94 2H94 1995 & after \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] REQUIREMENTS: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1Q94 2Q94 3Q94 4Q94 Total \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Applies only to [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] no later than the following calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter. \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_11}{\*\bkmkend doc_1_11} \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.36 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOUNDRY AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BETWEEN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL EQUIPMENT CORPORATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN DELETED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REQUEST FOR CONFIDENTIAL TREATMENT. \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1 - DEFINITIONS..................................................... 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2 - NATURE OF THIS AGREEMENT........................................ 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3 - DEVELOPMENT PROCEDURE........................................... 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4 - DEVICE QUALIFICATION............................................ 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5 - PRODUCTION...................................................... 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6 - OWNERSHIP AND LICENSES.......................................... 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 7 - MASK WORKS RIGHTS............................................... 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8 - PURCHASE ORDERS AND FORECASTS................................... 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 9 - PAYMENT......................................................... 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 10 - DELIVERY AND ACCEPTANCE........................................ 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 11 - TERM AND TERMINATION........................................... 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 12 - WARRANTY AND INDEMNITY......................................... 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 13 - CONFIDENTIALITY................................................ 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 14 - FORCE MAJEURE.................................................. 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 15 - PARTIAL INVALIDITY............................................. 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 16 - NOTICES........................................................ 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 17 - NON-WAIVER..................................................... 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 18 - NON-ASSIGNABILITY/TRANSFERABILITY.............................. 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 19 - SECTION HEADINGS............................................... 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 20 - GOVERNING LAW.................................................. 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 21 - PUBLICITY...................................................... 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 22 - ENTIRE AGREEMENT............................................... 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 23 - LIMITATION OF LIABILITY........................................ 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A DEVICES AND DEVICE SPECIFICATIONS................................ 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B SECTION 1: DEVICE TRANSFER AND QUALIFICATION PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2: DEVICE TECHNOLOGY PACKAGE............................ 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C QUALIFIED PROCESS(ES) SPECIFICATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRODUCT QUALIFICATION SPECIFICATION.............................. 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D WAFER ACCEPTANCE CRITERIA........................................ 24 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT E PAYMENT CALCULATION.............................................. 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT F [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]...................................................... 28 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEC-AMD \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOUNDRY AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Foundry Agreement, together with the Exhibits referenced herein and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached hereto ("Agreement") is between Digital Equipment Corporation, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Massachusetts corporation having a principal place of business of 146 Main \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Street, Maynard, Massachusetts, 01754 and all of its majority owned subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("DIGITAL") and Advanced Micro Devices, Inc., a Delaware corporation having a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal place of business at 901 Thompson Place, P.O. Box 3453, Sunnyvale, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, 94088-3453 and all of its majority owned subsidiaries ("AMD"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, AMD has developed certain technology relating to microprocessors; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, DIGITAL is, among other things, in the business of designing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developing, manufacturing and selling computer systems and associated software, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and components thereof, including semiconductor integrated circuits; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, DIGITAL has also developed manufacturing processes, capabilities and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foundry capabilities to produce silicon wafers containing integrated circuit die \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for microprocessors designed and laid out by other parties, such as AMD; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, DIGITAL and AMD desire to enter into this Agreement for the manufacture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by DIGITAL of microprocessor wafers containing AMD microprocessor technology for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN CONSIDERATION of the mutual promises in this Agreement, the parties agree as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1 - DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used in this Agreement, the following terms shall have the meanings set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 DEVICE shall mean a fully qualified, semiconductor integrated circuit, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embodying a specific unique design provided to DIGITAL by AMD which corresponds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to an AMD microprocessor product and which has successfully completed Product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualification. The different types and speed classes of microprocessors to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql produced under this Agreement are set forth in Exhibit A as amended from time to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 INTELLECTUAL PROPERTY RIGHTS shall mean all PATENTS, TRADE SECRETS, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COPYRIGHTS, MASK WORKS RIGHTS AND KNOW-HOW which have been, or will be, acquired \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise secured by either party before or during the TERM of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, throughout the world: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2.1 PATENTS shall mean all right, title and interest in and to all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Letters Patent and applications for Letters Patent, Industrial Models, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Industrial Designs, Petty Patents, Patents of Importation, Utility Models, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Certificates of Invention, and other indicia of invention ownership, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such rights granted upon any reissue, division, continuation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continuation-in-part applications now or hereafter filed; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2.2 TRADE SECRETS shall mean all right, title and interest in and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all trade secret rights arising under the common law, state law, federal law or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the laws of any foreign country; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2.3 MASK WORKS RIGHTS shall mean all right, title and interest in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to all MASK WORKS as MASK WORKS are defined in Section 901(a) (2) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Chip Protection Act of 1984. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2.4 COPYRIGHT RIGHTS shall mean all right, title and interest in and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to all copyright rights and all other literary property and author rights; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2.5 KNOW-HOW shall mean all right, title and interest in and to all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql know-how and show-how. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 LOT shall mean twenty four (24) WAFER starts. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 WAFER shall mean the six inch (6") diameter or six inch (6") diameter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equivalent silicon wafers produced by DIGITAL for AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 QUALIFIED PROCESS(ES) shall mean DIGITAL's CMOS process(es), with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modification, if any, made by DIGITAL with the mutual agreement of the parties, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which has been demonstrated to meet the objective reliability and quality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications referred to as AMD process qualification specification as set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in Exhibit C. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.6 PRODUCT QUALIFICATION shall mean the determination that DEVICES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufactured in the QUALIFIED PROCESS(ES) meet the objective criteria and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specification for the DEVICE as specified in AMD's PRODUCT QUALIFICATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specification set forth in Exhibit C. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.7 MASK WORK shall mean any mask set or work created and produced by or for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL and utilized in the fabrication of a DEVICE, and shall include both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql physical mask works, e.g., reticles, and any electronic form of a mask work, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally created by DIGITAL from information, data bases or the like provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD to DIGITAL in the TECHNOLOGY PACKAGE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.8 AMD DEVICE SPECIFICATION shall mean the document which shall define the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specific function, electrical, timing, mechanical, environmental, reliability \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other requirements of a DEVICE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 TERM shall mean the period of time during which this Agreement is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect. Such period shall commence upon the execution of this Agreement by both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 SEMICONDUCTOR CHIP PROTECTION LAW(S) shall mean the Semiconductor Chip \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Protection Act of 1984 in the United States and any associated regulations and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any amendments or revisions to such law or regulations, or any corresponding law \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and regulations in a country other than the United States. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.11 PREQUALIFICATION DEVICE shall mean a DEVICE produced by DIGITAL on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql line upon which it intends to produce the DEVICE, but prior to final \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualification of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the DEVICE. A PREQUALIFICATION DEVICE must meet all of the requirements of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable requirements of the applicable AMD GENERAL SPECIFICATION, with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exception of environmental and reliability requirements and other requirements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are being tested during qualification. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.12 TECHNOLOGY PACKAGE shall mean (i) layout design data bases utilized for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the creation of a DEVICE, (ii) DEVICE specific test programs/patterns for wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql functional and electrical test, (iii) DEVICE specific electrical and probe \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information, and (iv) logic/circuit schematics as the parties shall agree are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary for DIGITAL to convert layout designs for fabrication in the QUALIFIED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCESS(ES) and/or to complete any agreed upon design modifications, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternatively a mechanism to verify electrical and logical correctness of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data base conversion and/or design modifications. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.13 CONFIDENTIAL INFORMATION shall mean the confidential and proprietary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information of either party marked as such and treated in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of Section 13, CONFIDENTIAL INFORMATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.14 PROTOTYPE shall mean a preliminary form of a DEVICE which is fabricated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the purpose of functional and electrical verification. A PROTOTYPE is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranted for other than workmanship. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.15 [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] . \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2 - NATURE OF THIS AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 This Agreement shall constitute the basic terms and conditions which can \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be used for the production of multiple DEVICES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.2 For each DEVICE transaction, as may occur, the parties will separately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiate the schedules, terms, conditions, development processes and the like \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of an Exhibit A, an Exhibit B, and an Exhibit C, as appropriate. Each such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A, Exhibit B, and Exhibit C, as appropriate, shall, become amendments to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 3 - DEVELOPMENT PROCEDURE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 DIGITAL, with such participation and cooperation from AMD as the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall agree is appropriate, and as set forth in the pertinent Exhibit B, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql produce an electronic data base from which physical MASK WORKS (reticles) for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its fabrication process, can be produced, and shall produce or have produced on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's behalf such physical MASK WORKS (reticles). The process for DIGITAL to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql produce such MASK WORKS (and for AMD's participation in such process, if any) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the information in the TECHNOLOGY PACKAGE for a given DEVICE shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in its appropriate Exhibit B. Exhibit B for each DEVICE shall define, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the specific elements of the TECHNOLOGY PACKAGE needed to be provided by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to DIGITAL, or access to the results of the utilization of which are needed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be provided by AMD to DIGITAL, to convert an AMD DEVICE electronic layout design \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data base to DIGITAL's fabrication process design rules and parameters, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fabricate PROTOTYPES and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREQUALIFICATION DEVICES and DEVICES, (2) a set of Milestone events in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL layout design development process, with assignments for which party or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties will be responsible for what steps in achieving each Milestone, (3) an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indication of where such work will occur, and (4) the projected completion dates \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for each Milestone. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 As proof of capability, DIGITAL will manufacture one LOT of each DEVICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql using the process described in Exhibit B at a fee of [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] on an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expedited hot lot basis after AMD provides DIGITAL with the TECHNOLOGY PACKAGE. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The LOT will be considered a noncommercial PROTOTYPE order. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.1 AMD will inspect and test PROTOTYPES in accordance with a test \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql program as part of the development process outlined in Exhibit B. AMD will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide DIGITAL with the results of such inspection and testing in writing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accepting or rejecting the PROTOTYPES within thirty (30) days after receipt of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the PROTOTYPES by AMD. This PROTOTYPE development process will be repeated until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD provides DIGITAL with approval of the PROTOTYPE or terminates development of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the DEVICE corresponding to the PROTOTYPE because the parties determine that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICE cannot be effectively produced on fabrication process. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.3 DIGITAL shall modify DIGITAL's semiconductor fabrication process as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to enable DIGITAL to fabricate DEVICES, which meet the AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications for such DEVICES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4 DIGITAL shall provide specific design engineering services to incorporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] . AMD shall pay DIGITAL [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] within thirty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (30) days of completion [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] and delivery of a copy of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4.1 DIGITAL acknowledges that as between DIGITAL and AMD, AMD owns \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall retain all right, title and interest in and to all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY RIGHTS in and to the [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] upon which DIGITAL will incorporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] . \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4.2 AMD acknowledges that as between DIGITAL and AMD, DIGITAL owns \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall retain all right, title and interest in and to all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY RIGHTS in and to [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.5 AMD will provide to DIGITAL such test programs and patterns, as shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed upon by the parties are needed by DIGITAL to produce DEVICES, and as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be listed in Exhibit B as part of the TECHNOLOGY PACKAGE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.6 While an employee of one party is on the premises of the other party in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order to perform its obligations under this Agreement, such employee shall obey \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all reasonable personnel, safety and security policies and procedures of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party. Each party hereby indemnifies and holds harmless the other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any loss, damage or other award, arising from any suit, claim or cause of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action resulting from any injury or harm, including loss of life, to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee of the other party, other than that resulting from the gross negligence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or willful or wanton act of any employee, officer, director, agent or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 4 - DEVICE QUALIFICATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 DIGITAL and AMD will agree upon a qualification plan for each DEVICE to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufactured pursuant to this Agreement, and incorporated in Exhibit B, clearly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifying which party will be responsible for each part of the qualification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan. Such plan will be shown in Exhibit B and will address both QUALIFIED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCESS(ES) and PRODUCT QUALIFICATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Qualification tests shall be performed in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualification specifications as mutually agreed upon by the parties and as set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in Exhibit C. AMD will notify DIGITAL in writing of such QUALIFIED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCESS(ES) and PRODUCT QUALIFICATION or failure of such for each specific \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICE. In case of failure of qualification, AMD shall notify DIGITAL in writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifying the reasons for the failure of qualification of the specific DEVICE, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and both parties shall faithfully cooperate in order to resolve problems causing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the failure of qualification. AMD shall pay for one initial MASK WORKS and any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sets required due to changes required by AMD. Any other MASK WORKS will be paid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for by DIGITAL. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 Upon acceptance by AMD of a DEVICE PROTOTYPE, DIGITAL shall run, upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request by AMD, a mutually agreed upon number of qualification engineering LOTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql using the same reticle set as the accepted PROTOTYPE at a fee of [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] per LOT. Any qualification engineering LOTS using reticle sets \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporating any design modifications will also be run at a fee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] per LOT. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Prior to PRODUCT QUALIFICATION, AMD may stop production for any or all AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES by providing written notice to DIGITAL. DIGITAL will stop production \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following completion of the process steps at which the appropriate WAFERS reside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the time of written notification. As long as the production is stopped at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's request, through no fault of DIGITAL, AMD will pay DIGITAL for all such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WAFERS started prior to DIGITAL receiving the written notice. Prices for such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql work in progress (WIP) WAFERS will be prorated based on the stage of production, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but in no event shall the price exceed the completed price as stated in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section covering price. Upon payment, the WIP WAFERS will be delivered to AMD. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The parties will work together to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determine the best course of stopping production in accordance with good \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing practice to prevent waste. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.5 As part of the PRODUCT QUALIFICATION, DIGITAL and AMD shall agree upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parametric and process flow specifications prior to the production of DEVICES. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL will not modify the agreed upon specifications or routine process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control steps without the prior written consent of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.6 After approval of a PROTOTYPE, but before full qualification of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponding DEVICE, AMD may order from DIGITAL PREQUALIFICATION DEVICES, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anticipation of successful qualification of such DEVICE. Such orders shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected by a Purchase Order, which denominates the DEVICES being ordered as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREQUALIFICATION DEVICES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 5 - PRODUCTION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 DIGITAL will manufacture the DEVICES as WAFERS with tested die. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Upon successful completion of PRODUCT QUALIFICATION: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.1 As part of the production ramp up, DIGITAL shall reserve for AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a QUALIFIED PROCESS production capacity of at least the following DEVICE WAFER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outs per week: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2Q94 3Q94 4Q94 1Q95 After 1Q95 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- ---- ---- ---- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.2 Upon the achievement of [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] WAFER outs per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql week as stated in Section 5.2.1 above, DIGITAL shall reserve for AMD a QUALIFIED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCESS production capacity so as to be able to provide AMD with at least the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following minimum good DEVICE die outs per year: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.2.1 [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] good DEVICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql die outs per year using the initial Mask Works; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.2.2 The equivalent to [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] good DEVICE die outs per year as indicated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a change in the die size and defect density using Mask \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Works after the initial Mask Works. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.3 AMD agrees to purchase, at a minimum, a number of WAFERS per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql week equal to [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] of the manufacturing capacity reserved in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.2.1 above provided the Acceptance Criteria of Exhibit D are met. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.3 In the event AMD reduces its purchases to a level below that of Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2.2, DIGITAL may reduce its reservation of manufacturing capacity to a level \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proportionate to the AMD purchase level. The purchase level shall be evaluated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on a monthly basis. If, during any sixty (60) day period AMD does not purchase, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on an average, at least [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] WAFERS per week, DIGITAL has the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option to terminate this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.4 If die fail to meet parametric specifications, and in AMD's reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opinion such failure is deemed material, AMD may request that DIGITAL stop \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production. If DIGITAL is unable to correct such failures within a reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time not to exceed three (3) months, AMD may cancel orders for subsequent DEVICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production. AMD will notify DIGITAL in writing of its intention to cancel such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orders for subsequent production and include any substantiating data. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.5 AMD and DIGITAL will work together to install a mutually agreed upon Wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Level Reliability (WLR) program. The results of the program will be used to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monitor the process, identify problems, and make improvements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.6 AMD representatives shall be allowed to visit DIGITAL's manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facility during normal working hours upon reasonable prior notice to DIGITAL. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL representatives shall be allowed to visit AMD's probe, assembly, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final test facilities upon reasonable prior notice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.7 At AMD's request, DIGITAL will allow AMD to perform periodic audits and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operational reviews of DIGITAL's manufacturing facility. Such an audit will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to supervision by DIGITAL. The audit will encompass at a minimum \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quality Systems, Document Control, Performance to Specifications, Statistical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Process Control (SPC), Wafer Level Reliability (WLR), Calibration, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preventative maintenance. In no event shall the foregoing include detailed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary process recipes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 6 - OWNERSHIP AND LICENSES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.1 DIGITAL acknowledges and agrees that as between the parties AMD owns and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall retain all INTELLECTUAL PROPERTY RIGHTS in the TECHNOLOGY PACKAGE and AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION disclosed to DIGITAL. DIGITAL agrees the information and data \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in the TECHNOLOGY PACKAGE constitutes AMD CONFIDENTIAL INFORMATION to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be treated in accordance with Section 12. AMD acknowledges and agrees that as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the parties, DIGITAL owns and shall retain all INTELLECTUAL PROPERTY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RIGHTS in DIGITAL INFORMATION disclosed to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.2 The physical medium (e.g., reticles, data bases, etc.) upon which reside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all MASK WORKS generated by DIGITAL in its performance under this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be the property of AMD. However, possession of those physical embodiments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MASK WORKS shall not be deemed to give DIGITAL any INTELLECTUAL PROPERTY RIGHTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any of the contents of the TECHNOLOGY PACKAGE, even though such content may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be fixed in such physical embodiments of such MASK WORKS. DIGITAL agrees that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such physical embodiments of MASK WORKS created by DIGITAL in performance under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement shall not be disclosed by DIGITAL to any third party, nor used or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reproduced by DIGITAL for itself or any third party for any purpose during the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TERM of this Agreement or thereafter, except that, pursuant to the licenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted hereunder, DIGITAL may fabricate semiconductor integrated circuits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilizing such MASK WORKS solely for sale to AMD. Upon request from AMD, after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the termination of this Agreement, unless otherwise provided herein, DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees at AMD's request to send to AMD or destroy such MASK WORKS and notify AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing that such destruction has occurred, or, in the case of any backup, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql archive, or other copy of any electronic form of such MASK WORK, which DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is unable to send to AMD or destroy, without destruction of other data or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information contained on the media containing such archive, backup, or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy, DIGITAL agrees that it will not access or otherwise use such electronic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form to produce physical MASK WORKS (e.g., reticles). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.3 AMD hereby grants to DIGITAL an exclusive, worldwide, personal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable, nontransferable, fully paid-up, royalty free right and license, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the right to grant sublicenses to third parties, under all of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights to MASK WORKS, created by AMD or DIGITAL, to utilize any such MASK WORKS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql solely for the fabrication of DEVICES by DIGITAL solely for sale to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.4 AMD hereby grants to DIGITAL a non-exclusive, worldwide, personal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable, nontransferable, fully paid-up, royalty free right and license, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the right to grant sublicenses to third parties, under all of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY RIGHTS embodied in the TECHNOLOGY PACKAGE, solely for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of making and selling DEVICES to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.5 DIGITAL hereby grants to AMD a non-exclusive, worldwide, personal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable, nontransferable, fully paid-up, royalty free right and license, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the right to grant sublicenses to third parties under all of DIGITAL's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY RIGHTS in QUALIFIED PROCESS(es) solely for the purposes of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql using and selling DEVICES manufactured by DIGITAL. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6.6 DIGITAL grants to AMD a nonexclusive, worldwide, personal, irrevocable, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nontransferable, right and license, without the right to grant sublicenses to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third parties, under all of DIGITAL's INTELLECTUAL PROPERTY RIGHTS in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] , to make, have made, use, sell or otherwise dispose of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products which incorporate [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] . AMD products include, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without limitation, those products sold under the AMD name for which AMD is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensed to make, have made, use, sell, or otherwise dispose of. This license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be considered to be fully paid-up if this Agreement is not terminated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to its initial term. If the Agreement is terminated prior to its initial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term and AMD continues to use DIGITAL's INTELLECTUAL PROPERTY RIGHTS in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] , the royalty for the license granted in this Section 6.6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be fully paid-up upon payment by AMD of [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] , which shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and payable upon termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 7 - MASK WORKS RIGHTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.1 DIGITAL agrees that AMD is the owner of all MASK WORKS RIGHTS in MASK \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WORKS created by DIGITAL under this Agreement, including MASK WORKS rights under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all SEMICONDUCTOR CHIP PROTECTION LAWS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7.2 DIGITAL grants to AMD a non-exclusive, worldwide, personal, irrevocable, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nontransferable, right and license, without the right to grant sublicenses to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third parties, under all of DIGITAL's INTELLECTUAL PROPERTY RIGHTS in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements or modifications made by DIGITAL to the MASK WORKS, data base \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tapes, or test tapes to make, have made, use, sell, or otherwise dispose of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 8 - PURCHASE ORDERS AND FORECASTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1 AMD shall issue rolling blanket purchase orders which estimate in detail \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total volume of DEVICES required for six (6) months of production. All \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase orders and releases shall reference the DIGITAL assigned part number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the specific DEVICE to be supplied. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.1.1 Purchase Orders issued by AMD shall contain a minimum of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of demand forecast by DEVICE type and die level part number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with firm delivery dates and locations for the first [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] delivery dates and locations to be submitted on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monthly basis. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.2 AMD shall submit a twelve (12) month rolling forecast, by month. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forecast shall be non-binding. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.3 AMD may reschedule orders on a one time basis provided that DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receives notice of such rescheduling at least [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql originally scheduled date and provided that the rescheduled date is within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of the original shipment date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.4 AMD may not cancel any purchase orders for DEVICES or PREQUALIFICATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES once production has begun by DIGITAL. At any time, AMD may stop \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production for any or all AMD DEVICES by providing written notice to DIGITAL. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL will stop production following completion of the process steps at which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate WAFERS reside at the time of written notification. As long as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production is stopped at AMD's request, through no fault of DIGITAL, AMD will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay DIGITAL for all such WAFERS started prior to DIGITAL receiving the written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice. Prices for such work in progress (WIP) WAFERS will be prorated based on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stage of production, but in no event shall the price exceed the completed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price as stated in the Section covering price. Upon payment, the WIP WAFERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be delivered to AMD. The parties will work together to determine the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql course of stopping production in accordance with good manufacturing practice to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevent waste. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 9 - PAYMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.1 AMD will pay DIGITAL in accordance with the formula set forth in Exhibit E \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no later than thirty (30) days after invoice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.2 AMD shall keep reasonable and accurate business records from which it is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possible to audit the payments pursuant to Section 9.1 remitted to DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Agreement. DIGITAL shall have the right, not more than once \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql per twelve (12) month period during the TERM of this Agreement or thereafter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following termination of this Agreement, at its own expense, and through a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified public accounting firm chosen by DIGITAL and reasonably acceptable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD, to examine such books and records for auditing the payments and fees due \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and owing under this Agreement. Such auditor shall report only the amount of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments payable for the period of the audit and such records shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintained for a period of two (2) years after the period the records record. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3 With each payment, AMD shall furnish DIGITAL with a payment report. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment report shall be duly certified by an authorized representative of AMD, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifying the total amount of payments due to DIGITAL. It is expressly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understood and agreed by the parties that all computations relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination of the payments due shall be made in accordance with accounting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principles as reflected in the practices of certified independent public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accountants of international reputation. Each such report shall contain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient detail to verify the accuracy of the payments submitted hereunder. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql At a minimum, the payment report shall contain the numbers used for each factor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the payment calculation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3.1 Payment reports shall be submitted to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Digital Equipment Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 77 Reed Road \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hudson, MA 01749 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Semiconductor Manufacturing Finance Manager \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Digital Equipment Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 77 Reed Road \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hudson, MA 01749 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Semiconductor Operations Marketing Manager \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.4 All other payments from AMD to DIGITAL are due and payable thirty (30) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days from the date of invoice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 10 - DELIVERY AND ACCEPTANCE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.1 Unless otherwise provided herein, title, and liability and risk of loss or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damage to the die and/or WAFERS shall pass to AMD upon DIGITAL's tender of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery F.O.B. DIGITAL's plant of such die and/or WAFERS to a carrier which has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been approved by AMD for shipment to AMD and any loss or damage thereafter shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not relieve AMD from any obligation hereunder. Delivery shall be made in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments as agreed by the parties. The date of any receipt issued by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carrier shall be conclusive proof of the date of such shipment or delivery to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.2 Default or delay by DIGITAL in shipping or delivering the whole or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part or installment of the die and/or WAFERS under the purchase orders shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect any other portion thereof nor shall it affect any other purchase order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between AMD and DIGITAL. If any delay in delivery by DIGITAL of an order or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion thereof, exceeds [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION], AMD may cancel the corresponding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order or portion without liability to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.3 Purchase acceptance tests shall be performed by AMD as set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit D. If any die and/or WAFERS are not either accepted or rejected by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] of receipt of such die and/or WAFERS, then \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such shipments shall be deemed accepted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.4 WAFERS are to be provided to AMD with tested die accompanied by electrical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test data and yield sort information. Copies of such information will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql retained for one (1) year after the TERM hereof at which time AMD may obtain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such information upon request. Shipping materials and methods are to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consistent with AMD's materials and methods. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 11 - TERM AND TERMINATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.1 The TERM of this Agreement shall be two (2) years from the date of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execution by both parties. The TERM hereof may be renewed for one (1) year by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the mutual agreement of the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.2 In the event of any breach of this Agreement by either party hereto, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such breach is not corrected within sixty (60) days after written notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql describing such breach, this Agreement may be terminated forthwith by further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written notice to that effect from the party noticing the breach. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3 Either party hereto shall also have the right to terminate this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forthwith by giving written notice of termination to the other party at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, upon or after: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.1 the filing by such other party of a petition in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy or insolvency; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.2 any adjudication that such other party is bankrupt or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insolvent; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.3 the filing by such other party of any legal action or document \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seeking reorganization, readjustment or arrangement of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business under any law relating to bankruptcy or insolvency; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.4 the appointment of a receiver for all or substantially all of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the property of such other party; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.5 the making by such other party of any assignment for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of creditors; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.6 the institution of any proceedings for the liquidation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql winding up of such other party's business or for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of its corporate charter; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.3.7 the majority ownership or the controlling entity of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party is changed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.4 Termination shall not rescind any payment which has been made or which has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql become due and owing prior to the date of such termination, nor shall it relieve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any party of any obligation for performance or payment due and owing which has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accrued prior to the date of termination, unless a remedy for such non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance or non-payment is otherwise provided for in this Agreement. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and obligations of the parties under Sections 6, 7, 9, 11.4, 12, 13, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 shall survive termination for any reason. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.5 DIGITAL and AMD agree to discuss potential cooperation in design, process, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and manufacturing as an addition to this Agreement or another agreement as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 12 - WARRANTY AND INDEMNITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.1 DIGITAL warrants any DEVICES delivered hereunder will meet the AMD DEVICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SPECIFICATION and shall be free from defects in material and workmanship, under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql normal use and service, from the time of shipment to AMD through a period of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION]. If during such warranty period (i) DIGITAL is notified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promptly in writing upon discovery of any defect or nonconformance in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICE, including a detailed description of the defect or nonconformance; (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql samples of such DEVICES are returned to DIGITAL pursuant to a DIGITAL Return \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Material Authorization (RMA); (iii) DIGITAL's examination of such DEVICES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discloses that such DEVICES are defective or nonconforming, and such defects or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nonconformance are not caused by accident, abuse, misuse, neglect, improper \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installation, repair or alteration by someone other than DIGITAL, improper \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql testing or use contrary to any instructions issued by DIGITAL within a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable time, DIGITAL shall, at DIGITAL's sole option, either replace or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql credit AMD for such DEVICES. This warranty extends to AMD only and may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql invoked by AMD only for itself or its customers. DIGITAL will not issue RMAs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, or accept warranty returns directly from, customers or users of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. Prior to the return of any DEVICES by AMD, AMD shall afford DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the opportunity to inspect such DEVICES at AMD's location. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.2 In the event of a dispute as to conformance, at DIGITAL's request, AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall provide an agreed upon number of Data-Logged samples to DIGITAL. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.3 The foregoing warranty constitutes DIGITAL's exclusive liability, and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusive remedy of AMD, for any breach of warranty of the DEVICES. THIS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql STATUTORY, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE EXPRESSLY DISCLAIMED. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.4 AMD shall indemnify, defend, and hold DIGITAL harmless against all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expenses, damages, costs, or other losses to DIGITAL contained in the judgment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or settlement of any suit or proceeding brought against DIGITAL for infringement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of copyright, patent, trademark or other INTELLECTUAL PROPERTY RIGHTS arising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from (i) compliance with AMD's design, specifications, processes or DEVICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related instructions, in designing and/or producing DEVICES or (ii) sale to AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such DEVICES. AMD will defend at its own expense, including reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorney's fees, any suit or proceeding brought against DIGITAL alleging any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such infringement, provided that DIGITAL (i) gives AMD immediate notice of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such suit or proceeding and permits AMD through counsel of its own choice, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably acceptable to DIGITAL, to defend such suit or proceeding and (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gives AMD all needed information, assistance and authority, including the right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to settle such suit or proceeding on such terms as AMD deems acceptable, at AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expense, necessary for AMD to defend any such suit or proceeding. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.5 Except as provided for in Section 12.4, and limited to copyright, patent, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trademark or other INTELLECTUAL PROPERTY RIGHTS held or used by DIGITAL in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql process of providing foundry services, to AMD under this Agreement, DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall indemnify, defend, and hold harmless against all expenses, damages, costs, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other losses to AMD contained in the judgment or settlement of any suit or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding brought against AMD for infringement of copyright, patent, trademark \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other INTELLECTUAL PROPERTY RIGHTS arising from AMD's purchase, sale, or use \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of die, WAFERS or DEVICES manufactured by DIGITAL. DIGITAL will defend at its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql own expense, including reasonable attorney's fees, any suit or proceeding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql brought against AMD alleging any such infringement, provided that AMD (i) gives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL immediate notice of any such suit or proceeding and permits DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through counsel of its own choice, reasonably acceptable to AMD, to defend such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suit or proceeding and (ii) gives DIGITAL all needed information, assistance and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority, including the right to settle such suit or proceeding on such terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as DIGITAL deems acceptable, at DIGITAL's expense, necessary for DIGITAL to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defend any such suit or proceeding. Additionally, if use of die, WAFERS, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES is enjoined or ceases in accordance with a settlement of any suit or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding, DIGITAL will, at its expense, procure for AMD the right to continue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql using and selling the previously delivered die, WAFERS, or DEVICES or modify \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql them to become noninfringing, or if the first two options are not reasonably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available, to refund the purchase price for such previously delivered die, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WAFERS, or DEVICES. This indemnification obligation by DIGITAL shall not apply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if the alleged infringement is based upon the combination of the DIGITAL process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with AMD design, specifications, processes or DEVICE related instructions where \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the asserted \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql infringement would not exist but for such AMD design, specifications, processes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or DEVICE related instructions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.6 In the event of a ruling by any court that AMD does not have the license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights necessary for AMD to have a DEVICE manufactured by DIGITAL for AMD, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL shall have the option to immediately terminate its manufacture of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICE impacted by such ruling. If a party in good faith believes that an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse decision in current litigation imposes too great of a business risk to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue this Agreement, such party may terminate this Agreement in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entirety. This option shall apply even if AMD is not enjoined from operating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under such disputed license while the matter is on appeal. In the event of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination under the terms of this Section, AMD shall pay DIGITAL for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES already ordered by AMD and in the process of production as provided for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 8.4. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12.7 AMD warrants to the best of its knowledge that AMD has the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract with DIGITAL to have DIGITAL manufacture DEVICES for AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 13 - CONFIDENTIALITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.1 DIGITAL and AMD have developed and will develop certain confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information, ("INFORMATION" or "CONFIDENTIAL INFORMATION") including, by way of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql example, described in Exhibit A. Both party's exchange of INFORMATION is for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the sole purpose of performance under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.2 Unless otherwise agreed upon by the parties as to the length of time for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql maintaining confidentiality as to a particular item of INFORMATION, for a period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of seven (7) years from the date of disclosure, Recipient shall maintain in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidence Discloser's INFORMATION, provided that it (a) is clearly marked with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discloser's name and "Confidential", "Proprietary" or the substantial equivalent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the date of disclosure; and (b) if orally disclosed, is summarized in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing or corporeal form and is clearly marked with Discloser's name and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Confidential", "Proprietary" or the substantial equivalent and the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure and delivered to Recipient within thirty (30) days thereafter. Upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of INFORMATION so marked (or such summary in the case of oral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure), Discloser, at its option, may furnish to the receiving party an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledgment of receipt of such INFORMATION (or such summary) which contains \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the identity, media, and disclosure date of each separate tangible item of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION (or such summary) and a place for Recipient's signature \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acknowledging such receipt. Recipient shall, within ten (10) working days of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of such acknowledgment, either sign the acknowledgment and return it to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discloser, or indicate in writing that the acknowledgment cannot be so signed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and returned due to the inaccuracy of the identification of each or any of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql items of INFORMATION (or such summary). In the event that Discloser discloses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION which is agreed by the parties to be subject to a requirement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidentiality for more than seven (7) years, it shall be Discloser's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql responsibility to include in the above noted marking, the period of time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql different from seven (7) years. The date of disclosure shall be deemed to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no earlier than the date of the execution of this Agreement, or, the date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql creation of the corporeal form of the INFORMATION, if clearly shown on the face \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such corporeal form or any physical or electronic image generated from such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporeal form of the INFORMATION. During the confidentiality period of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosed by Discloser, Recipient agrees that Recipient may disclose such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION only to Recipient's employees having a need to know such INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for performance of this Agreement, that Recipient shall use the same degree of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql care to avoid disclosure of INFORMATION as it employs with respect to its own \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential/proprietary information, using at least a reasonable standard of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql care, and that Recipient shall notify its employees who receive such INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the obligations hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.3 Discloser shall prevent Recipient from being exposed to third party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential information which is in Discloser's possession. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.4 Recipient shall have no obligation as to Discloser's INFORMATION that (a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is known to Recipient at the time of disclosure; or (b) is independently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developed by Recipient, provided Recipient can show that such development was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accomplished by or on behalf of Recipient without the use of or any reference to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such INFORMATION; or (c) becomes known to Recipient from another source without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidentiality restriction on subsequent disclosure or use; or (d) is or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql becomes part of the public domain through no wrongful act of Recipient; or (e) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is disclosed with the prior written approval of Discloser; or (f) is disclosed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to any judicial or governmental request, requirement or order; provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Recipient takes reasonable steps to give Discloser sufficient prior notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order to contest such request, requirement or order; or (g) is furnished to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third party by Discloser without similar confidentiality restriction on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.5 Title to all tangible forms of Discloser's INFORMATION and any copies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof shall be and remain with Discloser. Recipient shall not copy or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reproduce in whole or in part any such INFORMATION without written approval of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discloser, except as is necessary to fulfill the purposes of this Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon written request or termination of this Agreement, all such tangible forms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such INFORMATION, with the exception of an archive copy to be used solely for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complying with Recipient's obligations hereunder, shall be promptly returned to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discloser or destroyed at Discloser's option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.6 Recipient shall not remove any proprietary, copyright, semiconductor chip \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql protection, trade secret, or other legend ("Proprietary Rights Legend") from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of Discloser's INFORMATION. Recipient, when reasonably possible and at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discloser's expense, will add to such INFORMATION any Proprietary Rights Legend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (or modify same) which Discloser deems necessary to protect its INTELLECTUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY RIGHTS and requests in writing to be so added or modified. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.7 The confidentiality obligations under this Section 13 shall survive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.8 No rights or obligations other than expressly recited herein are to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql implied solely from the transfer and/or receipt of INFORMATION. Nothing except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that expressly stated herein shall affect either party's present or prospective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights under any country's patent, copyright or mask works rights laws, or be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construed as granting any license under any present or future patent or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyright rights or mask works rights, or application therefor, or preclude \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql marketing an product unless such marketing constitutes unauthorized use and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure of INFORMATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.9 Consistent with other provisions herein, each party assures that it will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not knowingly, without obtaining prior authorization from the U.S. Dept. of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commerce, Office of Export Administration, transmit directly or indirectly the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technical data received pursuant hereto or the immediate product (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technical data to Afghanistan, People's Republic of China, or any Country Group \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Q, S, W, Y, or Z country specified in Supplement No.1 to Part 370 U.S. Dept. of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commerce Export Administration Regulations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13.10 Each party shall insure, to the extent that it employs any sub- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractor to perform any of its obligations under this Agreement, and in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance thereof, such sub-contractor needs to have access to the INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the other party, that a confidentiality agreement is in place between the one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and the sub-contractor of that one party, which obligates the sub- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contractor to protect the INFORMATION of the other party at least to the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql degree that the one party is so obligated under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 14 - FORCE MAJEURE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14.1 Neither party to this Agreement shall be liable for its failure to perform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its obligations hereunder during any period in which such performance is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delayed by fire, drought, earthquake, floods, war, embargo, strike, riot, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other causes beyond the reasonable control of either party, or the intervention \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any government authority, provided that the party suffering such delay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately notifies the other party of the delay and diligently works to end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such delay. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 15 - PARTIAL INVALIDITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15.1 If any provision of this Agreement is held to be ineffective, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unenforceable or illegal for any reason, such decision shall not affect the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validity or enforceability of any or all of the remaining portions hereof, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that the economic equity of the parties under this Agreement is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantially affected thereby and provided further that the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiate in good faith with respect to alternative or modified provisions which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will accomplish the objectives of this Agreement consistent with applicable law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 16 - NOTICES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16.1 Except as otherwise expressly provided herein, any notice which may be or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is required to be given under this Agreement shall be written or telegraphic, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and any written notices shall be sent by telephonic facsimile machine (e.g., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FAX) or by registered mail or certified mail, postage prepaid, return receipt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested. Any telephonic facsimile machine notice must be followed within five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) working days by an original of the facsimile, and any telegraphic notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must be followed within five (5) working days by written notice. All such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notices shall be deemed to have been given when such notice is received. Any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice given hereunder shall be in writing and addressed as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to DIGITAL: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Digital Equipment Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Operations Group \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 77 Reed Road \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hudson, MA 01749 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Semiconductor Operations Group Manager \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Digital Equipment Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Law Department \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 111 Powdermill Road \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maynard, MA 01754 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Semiconductor Operations Counsel \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to AMD: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 901 Thompson Place \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P.O. Box 3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: General Counsel \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Either party hereto may change its address by a notice given to the other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the manner set forth above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 17 - NON-WAIVER \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17.1 No waiver by either party, expressed or implied, of any right or remedy or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause of action resulting from a breach of any term, condition or obligation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement by the other party shall be construed as a waiver of any right or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedy or cause of action for any subsequent breach of that term, condition or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation or of any other term, condition or obligation of this Agreement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same or different nature. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 18 - NON-ASSIGNABILITY/TRANSFERABILITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither this Agreement nor any right, obligation, or interest hereunder is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignable or otherwise transferrable by either party without the prior written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 19 - SECTION HEADINGS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19.1 Section headings are for convenience purposes only and shall not affect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interpretation of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 20 - GOVERNING LAW \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20.1 This Agreement, and any Purchase Orders issued hereunder, and the rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and obligations of the parties hereto shall be governed by and interpreted in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the laws of the Commonwealth of Massachusetts, without regard to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its law as to conflicts of laws. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 21 - PUBLICITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21.1 Neither party will disclose to any third party and/or otherwise publicly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announce the existence of or terms and conditions of this Agreement without the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior written consent of the other party. However, the parties will issue a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public announcement and a mutually agreed to press release upon execution of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and contemplate that there will be occasions when public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announcements will be mutually agreed to be made by the parties, together or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql separately, concerning the existence of, aspects of and/or the progress of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 22 - ENTIRE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22.1 The terms and conditions contained herein constitute the entire agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the parties and shall supersede all previous communications, either oral \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or written, between the parties with respect to the foundry relationship for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES, set forth in this Agreement. No oral explanation or oral information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by either party hereto shall alter the meaning or interpretation of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. No amendment, modification, alteration, addition or change in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms hereof, or addition of new Exhibits, shall be binding on either party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless reduced to writing and duly executed by authorized representatives of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 23 - LIMITATION OF LIABILITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23.1 In no event will either party be subject to any indirect, special, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incidental or consequential damages resulting from its performance or failure to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform under this Agreement, or the furnishing, performance, or use of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql goods or services sold pursuant hereto, whether due to a breach of contract, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach of warranty, negligence or otherwise. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their duly authorized representatives as of this day 4 of Feb , 1994. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- ------ \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL EQUIPMENT CORPORATION ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ R.E. Caldwell /s/ Gene Conner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------ ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signature Signature \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql R.E. Caldwell Gene Conner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------ ---------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Printed Name Printed Name \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql V.P. Semiconductor OPS Sr. Vice President \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------ -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title Title \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2/4/94 Feb. 4, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------------------------ ----------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date Date \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES AND DEVICE SPECIFICATIONS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - ------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICE SPECIFICATIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - - --------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1: DEVICE TRANSFER AND QUALIFICATION PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2: DEVICE TECHNOLOGY PACKAGE \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 1: Device Transfer and Qualification Plan \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Device Transfer and Qualification Plan is defined by the "Macallan Project \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan". The project plan will be updated and tracked by the joint AMD-DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql start-up team. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECTION 2: Device Technology Package \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As a part of the start-up of AM486 manufacturing at DIGITAL, AMD will transfer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to DIGITAL certain information necessary for the manufacturing of the product at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL. This information is considered proprietary and is to be used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusively in the manufacture of AM486 product for AMD. AMD will transfer to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL information to the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product design rules \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product CD targets \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product Database including schematic database and all labels \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Database fracturing detail \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product test patterns \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product test programs at source level, and documentation \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Probe Card specifications \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql QUALIFIED PROCESS(ES) SPECIFICATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRODUCT QUALIFICATION SPECIFICATION \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The process and product qualification requirements are described in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following AMD controlled documents: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Fab Process Technology Qualification Specification # 00.021.2 Revision D \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --Product Reliability Qualification Specification # 00.021.4 Revision A \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WAFER ACCEPTANCE CRITERIA \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL will be manufacturing sorted die for AMD. The Acceptance Criteria for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the die will be based on three criteria. The criteria will be Wafer Electrical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Test (WET), Wafer Sort Yield, and Die Visual Quality. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. WET criteria will be based on the measurements of DIGITAL test structures \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to wafer sort. All test structures will reside on nine sites per wafer. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The test structure minimum, maximum, and target will be defined and agreed upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the parties and be incorporated by reference in this Exhibit \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of the wafers will be tested at WET. If a test is outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the minimum - maximum range, that will constitute a failure at that site. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there are greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] failures on a wafer for the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql test, the wafer will be considered as failing the WET criteria. If the wafer is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outside the WET range due to engineering tests, it will be accepted; if it is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outside the range due to processing issues, then it will be a candidate for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scrap. The final decision on scrap will be made by the joint AMD-DIGITAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposition review process. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The Wafer Sort Criteria will initially be set such that any wafers with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql yield of less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] and any lots with an average yield of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] (for the lot size of those wafers entering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sort--accounting for fab yield and WET rejection) will be scrapped. (Changes in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql die size can trigger a review of these initial scrap limits if requested by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL). Recognizing that product reliability is heavily dependent on defect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql levels, these scrap limits will be reviewed by AMD and DIGITAL on a semi-annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis and adjusted upward as yield improves. New limits should be set based on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql yield data from the latest six (6) months of production. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The lot-scrap limit should be set at the greater of the following (Use the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution of lot-yield averages for items (2) and (3)): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) the present lot-scrap limit, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] -standard deviations less \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the mean, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit D--Wafer Acceptance Criteria (continued) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) the lower [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] point of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution (point where [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all lots pass). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The wafer-scrap limit should be set at the greater of the following (Use \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the distribution of wafer yields for items (2) and (3) after removing scrapped \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lots from the distribution): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) The present wafer-scrap limit, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]-standard deviations less \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the mean (excluding lot scraps, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) the lower [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] point of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution (excluding lot scraps), (point where [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of all wafers pass). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL has the option to request a material review for disposition with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD of any scrap material. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Die Visual criteria will be based on AMD Product Assurance Outgoing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inspection specification #306-005, or as modified by mutual agreement of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. DIGITAL has the option on any questionable material, that does not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meet the inspection criteria, to request a joint disposition review by AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIGITAL. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT E \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAYMENT CALCULATION \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As per Section 9.1, AMD will pay DIGITAL for DEVICES according to the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formula: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT F \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_12}{\*\bkmkend doc_1_12} \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.37 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOUNDRY AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BETWEEN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TAIWAN SEMICONDUCTOR MANUFACTURING CORPORATION, LTD. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELETED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONFIDENTIAL TREATMENT. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. DEFINITIONS......................................................... 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. PROCESS TECHNOLOGY.................................................. 2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. PRODUCTION.......................................................... 4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. ON-SITE INSPECTION AND VENDOR INFORMATION........................... 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. TERM AND TERMINATION................................................ 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. CONFIDENTIAL INFORMATION............................................ 7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. WARRANTY/ACCEPTANCE TESTING......................................... 7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. PRICES/PAYMENT...................................................... 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. DELIVERY............................................................ 9 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. INDEMNIFICATION..................................................... 9 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. GENERAL............................................................. 10 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A (1.3) PRODUCTS................................................. 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B (1.4, 1.7, 1.8) QUALIFICATION REQUIREMENTS AND PLAN ........... 14 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT C (1.9) RESERVED PRODUCTION CAPACITY............................. 16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT D (3.3) ACTUAL ORDERS............................................ 17 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT E (8.1) PRICE TABLE.............................................. 18 \par\pard\plain\fs16 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD - TSMC \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOUNDRY AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THIS AGREEMENT (Agreement) is between Taiwan Semiconductor Manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation (TSMC), a Taiwanese corporation having its principal office at No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 121, Park Avenue 3, Science Based Industrial Park, Hsin-chu, Taiwan, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. (AMD), a Delaware U.S.A. corporation having its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal office at One AMD Place, Sunnyvale, California 94088-3453. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, AMD has developed certain technology relating to microprocessors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other logic; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, TSMC has developed manufacturing processes, capabilities and foundry \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capabilities to produce silicon wafers based upon the operational criteria and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql process technology provided by others; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, TSMC and AMD desire to enter into this Foundry Agreement for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture by TSMC of microprocessor and other logic wafers containing AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN CONSIDERATION of mutual promises in this Agreement, the parties agree as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 "Die" means good silicon die produced according to the Qualification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements by TSMC for AMD using the Qualified Process. The Die are to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided to AMD as Wafers with tested die. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 "Wafer" means the six inch (6") diameter and eight inch (8") diameter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wafers produced by TSMC for AMD using the Qualified Process. Where only six \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inch (6") or eight inch (8") wafers are referred to, they will be respectively \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified as 6" or 8" Wafers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 "Products" means the different types of microprocessors or other logic to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be produced from Die manufactured under this Agreement as set forth in Exhibit A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1.3) as amended from time to time by the mutual consent of the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 "Qualification Plan" means the steps to be taken to meet the objective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reliability and quality specifications referred to as AMD Specification 00-021 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as set forth in Exhibit B (1.4, 1.7, 1.8). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 "Qualification" means the determination that the Die meet the Qualification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements in accordance with the Qualification Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.6 "Qualified Process" means the 0.5 micron or smaller AMD manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql process which will include AMD proprietary technology including, but not limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, AMD's chemical mechanical polishing (CMP) process, with modifications made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the mutual agreement of the parties. The Qualified Process may be amended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time by the mutual consent of the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.7 "Qualification Requirements" means the criteria and specification the die \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must pass to be accepted by AMD, as set forth in Exhibit B (1.4, 1.7, 1.8). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.8 "Transfer Documentation" means the topographical design rules, parametric \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications, and process information for the Qualified Process, as set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Exhibit B (1.4, 1.7, 1.8). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 "Reserved Production Capacity" means the maximum capability to produce \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Wafers which TSMC will allocate to AMD and guaranteed to produce at AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request as set forth in Exhibit C (1.9). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 "Confidential Information" means the provisions of this Agreement and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously transferred and to be transferred information related to Wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production, Products and test under this Agreement including all exhibits, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information including but not limited to technical information, database tapes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifications, test tapes, masks and supporting documentation provided either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql orally, in writing, or in machine readable format and masks or reticles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generated by or for TSMC using AMD database tapes; provided that all such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information other than masks or reticles, is marked "Confidential" or similarly, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, if oral, identified as confidential at the time of disclosure and described \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in writing within thirty (30) days thereafter. Notwithstanding the foregoing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information does not include information generally available to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public, information independently developed or known by the receiving party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without reference to information disclosed hereunder, information rightfully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received from a third party without confidentiality obligations, or information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized in writing for release by the disclosing party hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. PROCESS TECHNOLOGY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 AMD will transfer to TSMC for the Qualified Process [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] as more fully described in the Transfer [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.2 TSMC agrees that it will manufacture exclusively for AMD [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] or smaller devices which are capable of running an [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] or [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] compatible instruction set for a period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on the Effective Date and ending on [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing exclusivity, however, does not apply to any manufacturing activity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where TSMC uses its own process that does not include AMD's CMP process or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other AMD proprietary technology. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.3 AMD grants to TSMC a personal, nonexclusive, irrevocable, nontransferable, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right and license, without the right to grant sublicenses to third parties, to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use the Qualified Process \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relevant process information to make, use, and sell products of third parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as provided in Section 2.2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.4 AMD will provide the initial mask set for each version or the initial mask \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the mask set for each revision requested by AMD of each Product. TSMC will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide any subsequent mask set for each version or any mask set for each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revision requested by TSMC. Such mask sets or variations thereof shall only be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used for AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.5 Upon mutual agreement of the parties, production may be started prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completion of full Qualification. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6 Die delivered for Qualification must meet all Qualification Requirements as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in Exhibits B (1.4, 1.7, 1.8). Quarterly progress reports will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided by TSMC on its progress towards Qualification of the Qualified Process. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6.1 If TSMC successfully completes Qualification, then, upon written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice from AMD of successful completion, TSMC will proceed to manufacture and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver Die at a rate which is agreed upon by TSMC and AMD in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6.2 If TSMC fails Qualification, such failure shall not be considered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a breach of this Agreement, and: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6.2.1 If TSMC is at fault or neither party is at fault, TSMC shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide AMD with new Die at TSMC's expense within sixty (60) days after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notification in writing by AMD of TSMC's failure to pass Qualification and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql repeat the process of Section 2.6 until TSMC successfully completes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualification or AMD notifies TSMC it is terminating this Agreement after at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least two unsuccessful attempts at Qualification which are the fault of TSMC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If AMD terminates this Agreement under this Section 2.6.2.1, the manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusivity under Section 2.2 shall continue until [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the license to TSMC under Section 2.3 shall be suspended until [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6.2.2 If AMD is at fault, TSMC shall provide AMD with new Die at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's request and expense within sixty (60) days after notification in writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD of TSMC's failure to pass Qualification and shall repeat the process of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.6 until TSMC successfully completes Qualification or either party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notifies the other it is terminating this Agreement after at least two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unsuccessful attempts at Qualification which are the fault of AMD. If this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement is terminated under this Section 2.6.2.2, the manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusivity under Section 2.2 shall continue until [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], but \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the license to TSMC under Section 2.3 shall continue unabated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.6.3 The target date for completion of Qualification is June 31, 1995. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSMC will make its best effort to complete Qualification by August 31, 1995. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Time is of the essence for AMD so that, if TSMC fails to complete Qualification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by October 31, 1995, and AMD is not at fault, the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase minimum of Section 3.2.2 will be reduced to levels determined by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon notice from AMD or this Agreement shall immediately terminate upon notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from AMD with no further opportunity for TSMC to complete Qualification. If AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminates this Agreement under this Section 2.6.3, the manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusivity under Section 2.2 shall continue until [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the license to TSMC under Section 2.3 shall be suspended until [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.7 Before Qualification, TSMC and AMD will agree upon parametric and process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql flow specifications which will be finalized before TSMC begins production. TSMC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not modify agreed upon specifications or routine process control steps in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any way without the prior written consent of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.8 TSMC agrees that it will transfer the 0.5 micron Qualified Process to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8" wafer production line currently under construction in a timely fashion. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will provide reasonable support for the transfer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. PRODUCTION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Using the Qualified Process, TSMC will manufacture the Products as Wafers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with tested Die. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 As soon as a process becomes a Qualified Process: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.1 TSMC will reserve for AMD the Reserved Production Capacity on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Qualified Process. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.1.1 The initial Reserved Production Capacity will become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql firm only when the Products are released for production \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and will ramp up as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Month After Release Rate (Wafers/Week) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- ------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1st [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2nd [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3rd [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.1.2 Except for the production increases agreed to and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided for in Exhibit C (1.9) Reserved Production Capacity, any requested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase in production volumes by AMD shall be no more than [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] Wafers/week in any ninety (90) day period upon ninety (90) days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice from AMD up to the Reserved Production Capacity unless otherwise agreed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to by TSMC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.2 AMD will purchase a minimum number of Wafers/week equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] %) of TSMC's Reserved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Production Capacity specified in the above Section 3.2.1 and in Exhibit C (1.9), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided: (i) the yield of Die per Wafer is at least [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent ([CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] % ); and (ii) the Product can be sold with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] . If requested by TSMC, AMD will provide reasonable and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient evidence of its [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] for the Product to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent it is permitted to do so if the [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] given in 3.2.2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2.3 If the Die cannot be sold to AMD to produce a [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] greater than provided in Section 3.2.2 for a particular Product and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TSMC cannot thenceforward [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of such Die to AMD to meet AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE CO