AMD 2004 Annual Report Download - page 99

Table of Contents
The Company also entered into a registration rights agreement with the initial purchasers of the 7.75% Notes, which granted the holders certain exchange
and registration rights with respect to the 7.75% Notes. The Company agreed to:
• file a registration statement within 90 days after October 29, 2004 enabling holders to exchange 7.75% Notes for publicly registered notes with
substantially identical terms;
• use commercially reasonable efforts to cause the registration statement to become effective within 180 days after October 29, 2004;
• use commercially reasonable efforts to effect an exchange offer of the 7.75% Notes for registered notes within 225 days after October 29, 2004; and
• file a shelf registration statement for the resale of the 7.75% Notes if the Company cannot effect the exchange offer within the time periods listed
above.
If the Company does not meet these deadlines, additional interest of 0.25% per instance will be paid on the 7.75% Notes until the obligations under the
registration rights agreement are fulfilled. On January 20, 2005, the Company filed a registration statement on Form S-4 in order to enable holders to exchange
the outstanding 7.75% Notes for publicly registered notes with substantially identical terms.
Issuance costs incurred in connection with this transaction in the amount of approximately $13 million will be amortized ratably over the term of the
7.75% Notes as interest expense, approximating the effective interest method.
Dresden Term Loan and Subsidy
AMD Saxony Limited Liability Company & Co. KG, (AMD Saxony, formerly known as AMD Saxony Manufacturing GmbH), an indirect wholly owned
German subsidiary of AMD, continues to facilitize Fab 30, which began production in the second quarter of 2000. AMD, the Federal Republic of Germany, the
State of Saxony, and a consortium of banks are providing financing for the project.
In March 1997, AMD Saxony entered into a loan agreement and other related agreements (the Dresden Loan Agreements) with a consortium of banks led
by Dresdner Bank AG, a German financial institution, in order to finance the project.
Because most of the amounts under the Dresden Loan Agreements are denominated in deutsche marks (converted to euros), the dollar amounts are subject
to change based on applicable exchange rates. The Company used the exchange rate that was permanently fixed on January 1, 1999, of 1.95583 deutsche marks
to one euro for the conversion of deutsche marks to euros, and then used exchange rate as of December 26, 2004, of 0.739 euro to one U.S. dollar to translate the
amounts denominated in deutsche marks into U.S. dollars.
The Dresden Loan Agreements, as amended, provide for the funding of the construction and facilitization of Fab 30. The funding consists of:
• equity contributions, subordinated and revolving loans and loan guarantees from, and full cost reimbursement through, AMD;
• loans from a consortium of banks; and
• investment grants, investment allowances, interest subsidies, and loan guarantees from the Federal Republic of Germany and the State of Saxony.
The Dresden Loan Agreements require that the Company partially fund Fab 30 project costs in the form of subordinated and revolving loans to, or equity
investments in, AMD Saxony. In accordance with the terms of the
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005