AMD 2009 Annual Report Download - page 117

and unpaid interest. In addition, prior to December 15, 2012, the Company may redeem up to 35% of the 8.125%
Notes from the proceeds of certain equity offerings at pre-defined redemption prices.
Holders have the right to require the Company to repurchase all or a portion of the Company’s 8.125%
Notes in the event that the Company undergoes a change of control, as defined in the indenture governing the
8.125% Notes, at a repurchase price of 101 percent of the principal amount plus accrued and unpaid interest.
The 8.125% Indenture contains certain covenants that limit, among other things, the Company’s ability and
the ability of its subsidiaries from:
• incurring additional indebtedness, except specified permitted debt;
• paying dividends and making other restricted payments;
• making certain investments if an event of a default exists, or if specified financial conditions are not
satisfied;
• creating or permitting certain liens;
• creating or permitting restrictions on the ability of its subsidiaries to pay dividends or make other
distributions to the Company;
• using the proceeds from sales of assets;
• entering into certain types of transactions with affiliates; and
• consolidating, merging or selling our assets as an entirety or substantially as an entirety.
The agreements governing our 5.75% Notes, 6.00% Notes and 8.125% Notes contain cross-default
provisions whereby a default under one agreement would likely result in cross defaults under agreements
covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit
the applicable note holders to declare all amounts outstanding under those borrowing arrangements to be
immediately due and payable.
Fab 36 Term Loan and Guarantee
On April 21, 2004, AMD Fab 36 KG, the legal entity that owned Fab36, the Company’s 300-millimeter
wafer fabrication facility, entered into a 700 million euro Term Loan Facility Agreement among AMD Fab 36
KG, as borrower, and a consortium of banks led by Dresdner Bank AG, as lenders, (the Fab 36 Term Loan) and
other related agreements (collectively, the Fab 36 Loan Agreements) to finance the purchase of equipment and
tools required to operate Fab 36. The Company guaranteed the obligations of AMD Fab 36 KG to the lender
under the Fab 36 Loan Agreements. As of December 26, 2009, total amount outstanding under the Fab 36 Term
Loan was $460 million; the rate of interest on the loan as of December 26, 2009 was 2.23406 percent. This loan
is repayable in quarterly installments which terminate in March 2011.
In connection with the consummation of the GF manufacturing joint venture transaction on March 2, 2009,
the terms of the Fab 36 Loan Agreements were amended to allow for the transfer of Fab 36, AMD Fab 36 KG
and its affiliated limited partners and general partner, AMD Fab 36 Holding GmbH, AMD Fab 36 Admin GmbH
and AMD Fab 36 LLC as well as the Fab 36 Loan Agreement to GF. In addition, the Company also amended the
terms of the related guarantee agreement such that the Company and GF are joint guarantors of AMD Fab 36
KG’s obligations to the lenders under the Fab 36 Loan Agreements. However, if the Company is called upon to
make any payments under the Guarantee Agreement, GF has separately agreed to indemnify the Company for the
full amount of such payments.
The Company must comply with certain covenants set forth in the Guarantee Agreement, such as adjusted
tangible net worth and EBITDA financial covenants. The Company was in compliance with all such covenants at
December 26, 2009.
109