What is the primary purpose of the agreement between AMD and ESDC?

The agreement is for a potential $650 million grant from the State of New York to Advanced Micro Devices (AMD) to support the construction of a new 300 mm wafer fabrication facility and related research and development activities in Saratoga County, New York.

Does AMD have to build the facility, or is it optional?

The agreement grants AMD the option to initiate construction of the facility. AMD can provide notice to ESDC to commence the project anytime between June 2007 and July 2009. If AMD does not notify ESDC of its intent to move forward by July 31, 2009, the agreement terminates without any penalty to AMD.

Under what conditions would AMD have to repay the grant money?

AMD may be required to repay all or part of the disbursed grant funds if it fails to attain or maintain certain specified levels of employment for the facility over designated periods. Additionally, the agreement outlines 'Events of Default' that, if not cured, could lead to termination and require repayment of any grant funds already disbursed.

When will AMD receive the grant money?

The grant funds will not be disbursed all at once. Actual disbursement will occur as AMD submits appropriate documentation verifying that expenditures have been incurred for the project. The State of New York is required to issue bonds or otherwise fund the project within 90 days after AMD notifies ESDC of its plans to initiate construction.

AMD 8-K: Material Agreements

Summary

Advanced Micro Devices, Inc. (AMD) has entered into a material definitive agreement with the New York State Urban Development Corporation d/b/a Empire State Development Corporation (ESDC) on December 22, 2006. This agreement outlines a potential grant of $650,000,000 for the construction of a new 300 mm wafer fabrication facility and related research and development at the Luther Forest Technology Campus in Saratoga County, New York. The grant disbursement is contingent upon AMD initiating construction between June 2007 and July 2009, and actual funding will occur as AMD incurs project expenditures and submits appropriate documentation.

Key Highlights

1AMD secured a potential $650 million grant from New York State for a new 300 mm wafer fabrication facility.
2The grant is for the construction of a facility and related R&D at the Luther Forest Technology Campus in Saratoga County, NY.
3AMD has the option to initiate construction between June 2007 and July 2009, with no penalty if they decide not to proceed by July 31, 2009.
4Grant funds will be disbursed as AMD incurs and documents project expenditures.
5If AMD proceeds, they must complete the facility and maintain operations for at least seven years post-full employment.
6Failure to meet certain employment levels or project completion deadlines may trigger repayment obligations for disbursed funds.
7The agreement includes defined 'Events of Default' which could lead to termination and potential withholding or repayment of the grant.

ADVANCED MICRO DEVICES INC 8-K Report, Material Agreement (Dec 27, 2006)

Summary

Key Highlights

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