AMD 2001 Annual Report Download - page 210

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Dresden Loan Agreements, as amended, also require that we:
o provide interim funding to AMD Saxony if either the remaining capital
investment allowances or the remaining interest subsidies are delayed, such
funding to be repaid to AMD as AMD Saxony receives the grants or subsidies
from the State of Saxony;
o fund shortfalls in government subsidies resulting from any default under
the subsidy agreements caused by AMD Saxony or its affiliates; and
o guarantee up to 35 percent of AMD Saxony's obligations under the Dresden
Loan Agreements, which guarantee must not be less than $100 million or more
than $277 million, until the bank loans are repaid in full.
AMD Saxony would be in default under the Dresden Loan Agreements if we, AMD
Saxony or AMD Saxony Holding GmbH (AMD Holding), the parent company of AMD
Saxony and a wholly owned subsidiary of AMD, fail to comply with certain
obligations thereunder or upon the occurrence of certain events including:
o material variances from the approved plans and specifications;
o our failure to fund equity contributions or shareholder loans or otherwise
comply with our obligations relating to the Dresden Loan Agreements;
o the sale of shares in AMD Saxony or AMD Holding;
o the failure to pay material obligations;
o the occurrence of a material adverse change or filings or proceedings in
bankruptcy or insolvency with respect to us, AMD Saxony or AMD Holding; and
o the occurrence of default under the Loan Agreement.
Generally, any default with respect to borrowing made or guaranteed by AMD that
results in recourse to us of more than $2.5 million and is not cured by us,
would result in a cross-default under the Dresden Loan Agreements and the Loan
Agreement. As of December 30, 2001, we were in compliance with all conditions
of the Dresden Loan Agreements.
In the event we are unable to meet our obligations to AMD Saxony as required
under the Dresden Loan Agreements, we will be in default under the Dresden Loan
Agreements and the Loan Agreement, which would permit acceleration of certain
indebtedness, which would have a material adverse effect on us. We cannot assure
that we will be able to obtain the funds necessary to fulfill these obligations.
Any such failure would have a material adverse effect on us.
Commercial Mortgage
As of December 30, 2001, we had a $1.2 million commercial mortgage outstanding
relating to one of our research facilities. The mortgage balance will be repaid
through 2007.
Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002