AMD 2009 Annual Report Download - page 25

the “Capture Period,” to make, have made, use, sell, offer to sell, import and otherwise dispose of certain
semiconductor- and electronic-related products anywhere in the world. Under the cross license agreement, Intel
has rights to make semiconductor products for third parties, but the third party product designs are not licensed as
a result of such manufacture. We have rights to perform assembly and testing for third parties but not rights to
make semiconductor products for third parties. The term of the cross license agreement continues until the
expiration of the last to expire of the licensed patents, unless earlier terminated. A party can terminate the cross
license agreement or the rights and licenses of the other party if the other party materially breaches the cross
license agreement and does not correct the noticed material breach within 60 days. Upon such termination, the
terminated party’s license rights terminate but the terminating party’s license rights continue, subject to that
party’s continued compliance with the terms of the cross license agreement. The cross license agreement and the
Capture Period will automatically terminate if a party undergoes a change of control (as defined in the cross
license agreement) and both parties’ licenses will terminate. Upon the bankruptcy of a party, that party may
assume, but may not assign, the cross license agreement, and in the event that the cross license agreement cannot
be assumed, the cross license agreement and the licenses granted will terminate.
We also have a patent cross license agreement with GF pursuant to which each party granted to the other a
non-exclusive license under patents filed by a party (or are otherwise acquired by a party) within a certain
number of years following the effective date of the agreement. Under the agreements with GF, in 2009 we
assigned approximately 3,000 patents and approximately 1,000 patent applications to GF. GF owns its allocation
of patents and applications subject to pre-existing rights, licenses or immunities granted to third parties relating
to such patents and applications. The patents and patent applications to be owned by each party after the division
were licensed to the other party pursuant to the agreement.
In addition, we entered into a Non-Patent Intellectual Property and Technology Transfer Agreement with
GF pursuant to which we assigned to GF all of our right, title and interest in technology and non-patent
intellectual property rights used exclusively in the manufacture, sorting and/or intermediate (WIP) testing of
semiconductor products. We retained technology and non-patent intellectual property rights used exclusively in
the design and/or post-fabrication delivery testing of semiconductors. Technology and non-patent intellectual
property rights used both in the manufacture, sorting and/or intermediate (WIP) testing of semiconductor
products and in the design and/or post-fabrication delivery testing of semiconductor products is owned jointly by
us and GF.
Backlog
We sell standard lines of products. Consequently, a significant portion of our sales are made from inventory
on a current basis. Sales are made primarily pursuant to purchase orders for current delivery or agreements
covering purchases over a period of time. Some of these orders or agreements may be revised or canceled
without penalty. Generally, in light of current industry practice, we do not believe that such orders or agreements
provide meaningful backlog figures or are necessarily indicative of actual sales for any succeeding period.
Employees
As of December 26, 2009, we had approximately 10,400 employees, and GF had approximately 3,000
employees.
Environmental Regulations
Many aspects of our business operations and products are regulated by domestic and international
environmental laws and regulations. These regulations include limitations on discharge of pollutants to air, water,
and soil; remediation requirements; product chemical content limitations; manufacturing chemical use and
handling restrictions; pollution control requirements; waste minimization considerations; and requirements with
respect to treatment, transport, storage and disposal of solid and hazardous wastes. If we fail to comply with any
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