AMD 2006 Annual Report Download - page 295

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
All of Spansion Japan’s debts under the Spansion Japan 2006 Merged Revolving Credit Facility will automatically become due and payable without any
notice or demand if proceedings of bankruptcy, insolvency, dissolution or similar matters are initiated by or against Spansion Japan. All of the debts under this
credit facility will become due and payable upon notice to Spansion Japan by the lenders in an event of default, which includes, among other things, the
following: a default in performance of payment; any of Spansion Japan’s debts or guarantee obligations (other than those under Spansion Japan 2006 Merged
Revolving Credit Facility) in an aggregate amount exceeding 10 million yen (approximately $84,000 as of December 31, 2006) become due and payable; or the
suspension of the business of Spansion Japan by Spansion Japan or by a government authority, in each case if not cured within applicable time periods set forth
in the Spansion Japan 2006 Merged Revolving Credit Facility.
The Spansion Japan 2006 Merged Revolving Credit Facility may be terminated in the event of default or by either party upon written notice in accordance
with its terms.
On December 15, 2006, Spansion Japan borrowed 2.0 billion yen (approximately $16.8 million as of December 31, 2006) under this facility. This amount
bears interest at a rate of 1.05 percent and must be repaid no later than March 15, 2007.
Exchangeable Senior Subordinated Debentures
In June 2006, Spansion LLC, the wholly owned operating subsidiary of the Company, issued $207.0 million of aggregate principal amount of 2.25%
Exchangeable Senior Subordinated Debentures due 2016. The Debentures are general unsecured senior subordinated obligations and rank subordinate in right of
payment to all of the Company’s senior indebtedness, including the Senior Notes, and senior in right of payment to all of the Company’s subordinated
indebtedness. The Debentures bear interest at 2.25 percent per annum. Interest is payable on June 15 and December 15 of each year beginning December 15,
2006 until the maturity date of June 15, 2016.
The Debentures were not exchangeable prior to January 6, 2007. On January 6, 2007, the Debentures became exchangeable for shares of the Company’s
Class A common stock, cash or a combination of cash and shares of such Class A common stock, at the Company’s option. Full conversion of the Debentures
into shares would result in an initial exchange rate of 56.7621 shares of Class A common stock per debenture representing an initial exchange price of
approximately $17.6174 per share of Spansion Inc. Class A common stock. The Company has reserved 11.7 million shares issuable upon conversion of the
debentures. The debentures have not been exchanged for Class A common stock as of February 21, 2007.
The Company, at any time prior to maturity may make an irrevocable election to satisfy the exchange obligation in cash up to 100 percent of the principal
amount of the debentures exchanged, with any remaining amount to be satisfied in shares of Class A common stock or a combination of cash and shares of
Class A common stock at the above exchange ratio. In the event that the Company makes this irrevocable election, debenture holders may exchange their
debentures only under the following circumstances:
• during any fiscal quarter after the Company’s fiscal quarter ending April 1, 2007 (and only during such fiscal quarter) if the sale price of Spansion Inc.
Class A common stock, for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the previous fiscal
quarter, is greater than or equal to 120 percent of the conversion price per share of the Spansion Inc. Class A common stock;
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007