AMD 2006 Annual Report Download - page 84

Table of Contents
forth below in an amount not less than the amount set forth below opposite the date of such preceding fiscal period:
Period
Amount
(In millions)
for the four consecutive fiscal quarters ending December
2005 and for the four fiscal quarters ending on each fiscal
quarter thereafter
$850 and $750 on an annualized basis for the two most
recent fiscal quarters ending prior to December 31, 2006
Also on April 21, 2004, AMD, AMD Fab 36 KG, AMD Fab 36 LLC, AMD Fab 36 Holding GmbH, a German company and wholly owned subsidiary of
AMD that owns substantially all of our limited partnership interest in AMD Fab 36 KG, and AMD Fab 36 Admin GmbH, a German company and wholly owned
subsidiary of AMD Fab 36 Holding that owns the remainder of our limited partnership interest in AMD Fab 36 KG, (collectively referred to as the AMD
companies) entered into a series of agreements (the partnership agreements) with the unaffiliated limited partners of AMD Fab 36 KG, Leipziger Messe and Fab
36 Beteiligungs, relating to the rights and obligations with respect to their limited partner and silent partner contributions in AMD Fab 36 KG. The partnership
was established for an indefinite period of time. A partner may terminate its participation in the partnership by giving twelve months advance notice to the other
partners. The termination becomes effective at the end of the year following the year during which the notice is given. However, other than for good cause, a
partner’s termination will not be effective before December 31, 2015.
The partnership agreements set forth each limited partner’s aggregate capital contribution to AMD Fab 36 KG and the milestones for such contributions.
Pursuant to the terms of the partnership agreements, AMD, through AMD Fab 36 Holding and AMD Fab 36 Admin, agreed to provide an aggregate of $772
million, Leipziger Messe agreed to provide an aggregate of $264 million and Fab 36 Beteiligungs agreed to provide an aggregate of $158 million. The capital
contributions of Leipziger Messe and Fab 36 Beteiligungs are comprised of limited partnership contributions and silent partnership contributions. These
contributions were due at various dates upon the achievement of milestones relating to the construction and operation of Fab 36. As of December 31, 2006, all
capital contributions were made in full.
The partnership agreements also specify that the unaffiliated limited partners will receive a guaranteed rate of return of between 11 percent and 13 percent
per annum on their total investment depending upon the monthly wafer output of Fab 36. We guaranteed these payments by AMD Fab 36 KG.
In April 2005, we amended the partnership agreements in order to restructure the proportion of Leipziger Messe’s silent partnership and limited
partnership contributions. Although the total aggregate amount that Leipziger Messe has agreed to provide remained unchanged, the portion of its contribution
that constitutes limited partnership interests was reduced by $66 million while the portion of its contribution that constitutes silent partnership interests was
increased by a corresponding amount. In this report, we refer to this additional silent partnership contribution as the New Silent Partnership Amount.
Pursuant to the terms of the partnership agreements and subject to the prior consent of the Federal Republic of Germany and the State of Saxony, AMD
Fab 36 Holding and AMD Fab 36 Admin have a call option over the limited partnership interests held by Leipziger Messe and Fab 36 Beteiligungs, first
exercisable three and one-half years after the relevant partner has completed the applicable capital contribution and every three years thereafter. Also,
commencing five years after completion of the relevant partner’s capital contribution, Leipziger Messe and Fab 36 Beteiligungs each have the right to sell their
limited partnership interest to third parties (other than competitors), subject to a right of first refusal held by AMD Fab 36 Holding and AMD Fab 36 Admin, or
to put their limited partnership interest to AMD Fab 36 Holding and AMD Fab 36 Admin. The put option is thereafter exercisable every three years. Leipziger
Messe and Fab 36 Beteiligungs also have a put option in the event they are outvoted at AMD Fab 36 KG partners’ meetings with respect to certain specified
matters such as increases in the partners’ capital contributions beyond those required by the partnership agreements, investments
79
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007