AMD 2008 Annual Report Download - page 28

specified patents, patent applications, trademarks and other intellectual property rights and technology. The
patents that we transferred included patents and patent applications covering Flash memory products and
technology, the processes necessary to manufacture Flash memory products, and the operation and control of
Flash memory products. We reserved rights, on a royalty free basis, to practice the contributed patents and to
license these patents to our affiliates and successors-in-interest. We also have the right to use the jointly-owned
intellectual property for our internal purposes and to license such intellectual property to others to the extent
consistent with our non-competition obligations to Spansion.
We also have a patent cross-license agreement with Fujitsu whereby each party was granted a non-exclusive
license under certain of the other party’s respective semiconductor-related patents. This patent cross-license
agreement terminates on June 30, 2013, unless earlier terminated upon 30 days notice following a change of
control of the other party. We also have a patent cross-license agreement with Spansion. The patents and patent
applications that are licensed are those with an effective filing date prior to the termination of the patent cross-
license agreement. The agreement will automatically terminate on the later of June 30, 2013 or the date we sell
our entire equity interest in Spansion. The agreements may be terminated by a party on a change in control of the
other party or its semiconductor group.
In connection with the consummation of the transactions contemplated by the Master Transaction
Agreement, we intend to enter into a Patent Cross License Agreement pursuant to which we and The Foundry
Company would grant 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 Patent Cross License
Agreement. Under the agreement all of our issued patents and pending patent applications (other than patents and
applications owned by ATI Technologies ULC and its wholly owned subsidiaries) will be divided between us.
The Foundry Company will own 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 will be licensed to the other party pursuant to the Patent
Cross License Agreement.
In addition, we intend to enter into a Non-Patent Intellectual Property and Technology Transfer Agreement,
where we would assign to The Foundry Company 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 will retain technology and non-patent intellectual property rights used exclusively in
the design and/or post-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-delivery testing of semiconductor products will be owned jointly by us and The Foundry
Company.
In addition, as is typical in the semiconductor industry, we have numerous cross-licensing and technology
exchange agreements with other companies under which we both transfer and receive technology and intellectual
property rights. One such agreement is the patent cross-license agreement with Intel which was effective as of
January 1, 2001. Under this agreement we granted each other a non-exclusive license under each party’s patents
for the manufacture and sale of semiconductor products worldwide. We pay Intel a royalty for certain licensed
microprocessor products sold by us or any AMD affiliate anywhere in the world. The license applies to each
party’s patents that have a first effective filing date during the capture period, which is the period from January 1,
2001 through January 1, 2011. Either party may terminate the agreement if the other party commits a material
breach of the agreement and does not correct the breach within 60 days after receiving written notice thereof. In
addition, either party may terminate the agreement upon 60 days written notice in the event of a filing by the
other party of a petition in bankruptcy or insolvency, or any adjudication thereof, the filing of any petition
seeking reorganization under any law relating to bankruptcy, the appointment of a receiver, the making of any
assignment for the benefit of creditors, the institution of any proceedings for the liquidation or winding up of the
other party’s business, or in the event of a change of control. For purposes of our agreement with Intel, change of
control means a transaction or a series of related transactions in which (i) one or more related parties who did not
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