AMD 2004 Annual Report Download - page 95

Table of Contents
As of December 26, 2004, Spansion Japan was in compliance with these financial covenants.
As security for amounts outstanding under the revolving facility, Spansion Japan pledged its accounts receivable from Fujitsu. The accounts receivable are
held in trust pursuant to the terms of a trust agreement. Under the trust agreement, Spansion Japan is required to maintain the value of its accounts receivable at
specified thresholds (as defined by the trust agreement), based upon the amounts outstanding under tranche A and tranche B. In addition, the trustee collects
payments from Fujitsu into a separate trust account and releases these amounts to Spansion Japan, subject to the calculated thresholds, upon instruction from the
agent for the lenders. At any time when the accounts receivable balance in the trust account is less than the required thresholds, Spansion Japan is required to do
one of the following to cure the shortfall:
• provide additional cash to the trust; or
• repay a specified portion of the outstanding loans.
Amounts outstanding under the revolving credit facility may become automatically due and payable upon the occurrence of specified events with respect
to Spansion Japan, including: filings or proceedings in bankruptcy, failure to pay any obligations under the revolving credit facility that have become due, failure
to pay other third-party indebtedness where such debt exceeds 200 million yen (approximately $2 million as of December 26, 2004), or if the value of the
accounts receivable from Fujitsu held in trust is below the required thresholds and such shortfall is not remedied within three business days. In addition, amounts
outstanding under the revolving credit facility may become automatically due and payable upon the occurrence of specified events with respect to Fujitsu
including: filings or proceedings in bankruptcy, default by Fujitsu with respect to payments to Spansion Japan or other obligations under their purchase and sale
agreement, or default by Fujitsu with respect to other third-party indebtedness where such debt exceeds one billion yen (approximately $10 million as of
December 26, 2004). As of December 26, 2004, the amount of accounts receivable held in the trust was approximately $166 million.
Because most amounts under the Spansion Japan Revolving Loan are denominated in yen, the dollar amounts stated above are subject to change based on
applicable exchange rates. The Company used the exchange rate at December 26, 2004 of 103.62 yen to one U.S. dollar to translate the amounts denominated in
yen into U.S. dollars.
90
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005