AMD 2006 Annual Report Download - page 124

Table of Contents
priority over prepayment of the amount outstanding under the October 2006 Term Loan. Excess cash flow is defined as consolidated net income adjusted for
non-cash items and changes in working capital, but subtracting actual capital expenditures and mandatory and optional repayment of any funded debt (other than
revolving loans, except to the extent the revolving loan commitment is permanently reduced).
The October 2006 Term Loan contains certain covenants that limit, among other things, the Company’s ability and the ability of its restricted subsidiaries
(which at this time are all of the Company’s subsidiaries) from:
• incurring additional indebtedness, except specified permitted debt;
• creating or permitting certain liens;
• consolidating, merging or selling assets as an entirety or substantially as an entirety unless specified conditions are met;
• paying dividends and making other restricted payments if a default or an event of default exists, or if specified financial conditions are not satisfied;
• making or committing to make any capital expenditures in the ordinary course of business exceeding a specified amount;
• issuing or selling any shares of capital stock of the Company’s restricted subsidiaries;
• entering into certain types of transactions with affiliates;
• creating restrictions on the making of certain distributions by the Company’s restricted subsidiaries, such as dividends, loans or transfer of properties to
the Company;
• permitting domestic wholly-owned restricted subsidiaries to guarantee the Company’s indebtedness unless they also guarantee the October 2006 Term
Loan; and
• permitting the Company’s Consolidated Net Senior Secured Leverage Ratio (as defined in the October 2006 Term Loan) to exceed 2.25 to 1.00.
Amounts outstanding under the October 2006 Term Loan may become due and payable upon the occurrence of specified events, including, among other
things: failure to pay any obligations under the October 2006 Term Loan that have become due; breach of any representation or warranty, or certain covenants;
any default in making any payment of principal or interest of any debt the outstanding amount of which exceeds $50 million or any default in the observance or
performance of any other obligations under such debt; any default in the related security documents executed in connection with the October 2006 Term Loan, or
the security documents or any lien created by the security documents ceasing to be in full force or effect; filings or proceedings in bankruptcy; judgment or
awards entered against us or any significant subsidiary involving aggregate liability of $50 million or more; or a change of control (as defined in the October
2006 Term Loan).
In connection with the October 2006 Term Loan, the Company and its subsidiaries, AMD International Sales & Service, Ltd., AMD (U.S.) Holdings, Inc.,
AMD US Finance, Inc., ATI Research Silicon Valley Inc., ATI Research, Inc., and ATI Technologies Systems Corp. (collectively referred to as the Grantors)
entered into a collateral agreement in favor of Wells Fargo, as Collateral Agent. Under the Collateral Agreement, each Grantor granted Wells Fargo a security
interest in, among other things, and subject to certain exceptions, now owned and hereafter acquired: (i) accounts receivable; (ii) proceeds and products from the
sale of capital stock of Spansion Inc.; (iii) the Spansion Collateral Account (as defined in the October 2006 Term Loan), if and when it is created; (iv) certain of
the Grantors’ respective equity interests in certain affiliates; and (v) all indebtedness for borrowed money owed to any Grantor by an affiliate.
In connection with the October 2006 Term Loan and the Collateral Agreement, the Grantors and Wells Fargo, as Collateral Agent, entered into a collateral
trust agreement (Collateral Trust Agreement) whereby Wells Fargo will hold in trust the pledged collateral under the Collateral Agreement. The Collateral Trust
Agreement is the principal document by which our 7.75% Notes are secured equally and ratably with the lenders under the
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007