AMD 2008 Annual Report Download - page 13

$1.1 billion (as of December 27, 2008) of our outstanding indebtedness. In addition, ATIC agreed to contribute
approximately $1.4 billion of cash to The Foundry Company in exchange for The Foundry Company securities,
consisting of one Class A Ordinary Share, 218,190 Class A Preferred Shares, 172,760 Class B Preferred Shares,
$201,810,000 aggregate principal amount of Class A Subordinated Convertible Notes and $807,240,000
aggregate principal amount of Class B Subordinated Convertible Notes, collectively, the Convertible Notes, and
ATIC agreed to pay $700 million in cash to us in exchange for the transfer of 700,000 Class B Preferred Shares
of The Foundry Company to ATIC.
Although ATIC’s Convertible Notes will not be convertible immediately upon consummation of the
transactions contemplated by the Master Transaction Agreement, on an as converted to ordinary shares basis, we
will own 34.2 percent of The Foundry Company and have a 50 percent voting interest in The Foundry Company
while ATIC will own 65.8 percent of The Foundry Company and have a 50 percent voting interest in The
Foundry Company.
In addition, we will issue to WCH 58 million shares of our common stock and warrants to purchase
35 million shares of our common stock at an exercise price of $0.01 per share for an aggregate purchase price of
58,000,000 multiplied by the lesser of (i) the average of the closing prices of our common stock on the NYSE for
the 20 trading days immediately prior to and including December 12, 2008 or (ii) the average of the closing
prices of our common stock on the NYSE for the 20 trading days immediately prior to the closing date of the
transactions contemplated by the Master Transaction Agreement. The warrants will be exercisable after the
earlier of (i) public ground-breaking of a proposed Foundry Company manufacturing facility in up-state New
York and (ii) 24 months from the date of issuance, and the warrants will have a ten year term.
Upon consummation of the transactions contemplated by the Master Transaction Agreement, we also intend
to enter into a Funding Agreement with The Foundry Company and ATIC which provides for the further funding
of The Foundry Company. Pursuant to the Funding Agreement, ATIC will provide additional equity funding to
The Foundry Company of a minimum of $3.6 billion and up to $6.0 billion over five years. The aggregate
amount of equity funding to be provided to The Foundry Company in any fiscal year depends on the time period
of such funding (Phase I, II or III) and the amounts set forth in the five-year capital plan of The Foundry
Company. ATIC’s obligation to provide funding is subject to certain conditions, including, among other things,
the accuracy, in all material respects, of The Foundry Company’s representations and warranties in the Funding
Agreement, the absence of a material adverse effect of The Foundry Company, and the absence of a material
breach or default by The Foundry Company or by us under the provisions of any document related to the
transaction. In addition, each Phase has its own specific conditions that The Foundry Company must meet in
order to receive funding from ATIC. With respect to Phase I, ATIC’s obligation to provide funding is subject to
certain additional conditions, including, among other things: (i) the continuing effectiveness of a specified
agreement with IBM; (ii) the availability of New York and Dresden subsidies in amounts not materially different
than contemplated in The Foundry Company’s five-year capital plan; and (iii) if the Reconciliation Event has not
occurred, our continuing compliance with the covenants under the Shareholders’ Agreement with respect to the
Intel Patent Cross License Agreement. The term Reconciliation Event means the earlier of (i) such time when we
have secured for The Foundry Company the right to make unlimited volumes of products, including
microprocessors, for us and our subsidiaries, regardless of whether The Foundry Company is our “Subsidiary” or
“Affiliate” for purposes of the Intel Patent Cross License Agreement, or (ii) such time when The Foundry
Company Board determines that The Foundry Company no longer needs to be a “Subsidiary” of AMD as defined
in the Intel Patent Cross License Agreement. With respect to Phase II, in addition to the conditions for Phase I,
ATIC’s obligation to provide funding is subject to certain additional conditions, including, among other things:
(i) we will have secured for The Foundry Company “AMD-specific Have Made” rights (defined as our right to
have unlimited volumes of products, including microprocessors, made for us and our subsidiaries by The
Foundry Company); (ii) The Foundry Company will have achieved targets for cumulative revenue and
cumulative gross margin; and (iii) The Foundry Company will have achieved certain strategic milestones relating
to the groundbreaking and build out of their Abu Dhabi fabrication facility and to AMD technology and the
timing of the receipt by The Foundry Company of third party customer interest and revenue. With respect to
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