AMD 2006 Annual Report Download - page 130

Table of Contents
Under the Fab 36 Loan Agreements, AMD Fab 36 KG, AMD Fab 36 Holding and AMD Fab 36 Admin are generally prevented from paying dividends or
making other payments to the Company. In addition, AMD Fab 36 KG would be in default under the Fab 36 Loan Agreements if the Company or any of the
AMD companies fail to comply with certain obligations thereunder or upon the occurrence of certain events and if, after the occurrence of the event, the lenders
determine that their legal or risk position is adversely affected. Circumstances that could result in a default include:
• the Company’s failure to provide loans to AMD Fab 36 KG as required under the Fab 36 Loan Agreements;
• failure to pay any amount due under the Fab 36 Loan Agreements within five days of the due date;
• occurrence of any event which the lenders reasonably believe has had or is likely to have a material adverse effect on the business, assets or condition
of AMD Fab 36 KG or AMD or their ability to perform under the Fab 36 Loan Agreements;
• filings or proceedings in bankruptcy or insolvency with respect to us, AMD Fab 36 KG or any limited partner;
• occurrence of a change in control (as defined in the Fab 36 Loan Agreements) of AMD;
• AMD Fab 36 KG’s noncompliance with certain affirmative and negative covenants, including restrictions on payment of profits, dividends or other
distributions except in limited circumstances and restrictions on incurring additional indebtedness, disposing of assets and repaying subordinated debt;
and
• AMD Fab 36 KG’s noncompliance with certain financial covenants, including loan to fixed assets value ratio and, in certain circumstances, a minimum
cash covenant.
In general, any default with respect to other indebtedness of AMD or AMD Fab 36 KG that is not cured, would result in a cross-default under the Fab 36
Loan Agreements.
The occurrence of a default under the Fab 36 Loan Agreements would permit the lenders to accelerate the repayment of all amounts outstanding under the
Fab 36 Term Loan. In addition, the occurrence of a default under this agreement could result in a cross-default under the indenture governing the Company’s
7.75% Notes and the October 2006 Term Loan. The Company cannot provide assurance that it would be able to obtain the funds necessary to fulfill these
obligations. Any such failure would have a material adverse effect on the Company.
4.75% Convertible Senior Debentures Due 2022
On January 29, 2002, the Company issued $500 million of its 4.75% Convertible Senior Debentures due 2022 (the 4.75% Debentures) in a private offering
pursuant to Rule 144A and Regulation S of the Securities Act.
In February 2006, holders of the Company’s 4.75% Debentures elected to convert their debentures into 21,378,605 shares of the Company’s common
stock pursuant to the original terms of the 4.75% Debentures. Upon conversion, the principal amount of the debentures of $500 million plus $12 million of
unamortized finance costs were reclassified and reflected in stockholders’ equity. Accordingly, as of December 31, 2006 the 4.75% Debentures were no longer
outstanding.
4.50% Convertible Senior Notes Due 2007
On November 25, 2002, the Company issued $402.5 million of 4.50% Convertible Senior Notes due 2007 (the 4.50% Notes) in a registered offering.
Interest on the 4.50% Notes was payable semiannually in arrears on June 1 and December 1 of each year, beginning June 1, 2003. Beginning on December 4,
2005, the 4.50% Notes were redeemable by the Company at the Company’s option for cash at specified prices expressed as a percentage of the outstanding
principal amount plus accrued and unpaid interest provided that the Company could not
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007