AMD 2007 Annual Report Download - page 128

Table of Contents
Pursuant to the terms of the Guarantee Agreement among the Company, as guarantor, AMD Fab 36 KG, Dresdner Bank AG and Dresdner Bank AG,
Niederlassung Luxemburg, the Company must comply with specified adjusted tangible net worth and EBITDA financial covenants if the sum of the Company’s
group consolidated cash declines below the following amounts:
Amount
(in millions)
if Moody’s
Rating is at least
if Standard & Poor’s Rating
is at least
$500 B1 or lower and B+ or lower
425 Ba3 and BB-
400 Ba2 and BB
350 Ba1 and BB+
300 Baa3 or better and BBB-or better
As of December 29, 2007, group consolidated cash was greater than $500 million and therefore, the preceding financial covenants were not applicable.
If the Company’s group consolidated cash declines below the amounts set forth above, the Company would be required to maintain adjusted tangible net
worth, determined as of the last day of each preceding fiscal quarter, of not less than the amounts set forth below:
Measurement Date on fiscal quarter ending
Amount
(In millions)
December 2005 $ 1,500
March 2006 and on the last day of each fiscal quarter thereafter $ 1,750
In addition, if the Company’s group consolidated cash declines below the amounts set forth above, the Company would be required to maintain EBITDA
(as defined in the agreement) as of the last day of each preceding fiscal period set forth below opposite the date of such preceding fiscal period:
Period Amount (In millions)
For the four consecutive fiscal quarters ending December 2005 and
for the four fiscal quarters ending on each fiscal quarter thereafter
$850 and $750 on an annualized basis for the two most recent
fiscal quarters ending prior to December 31, 2006
Also on April 21, 2004, AMD, AMD Fab 36 KG, AMD Fab 36 LLC, AMD Fab 36 Holding GmbH, a German company and wholly owned subsidiary of
AMD that owns substantially all of the Company’s limited partnership interest in AMD Fab 36 KG, and AMD Fab 36 Admin GmbH, a German company and
wholly owned subsidiary of AMD Fab 36 Holding that owns the remainder of the Company’s limited partnership interest in AMD Fab 36 KG, (collectively
referred to as the AMD companies) entered into a series of agreements (the partnership agreements) with the unaffiliated limited partners of AMD Fab 36 KG,
Leipziger Messe and Fab 36 Beteiligungs, relating to the rights and obligations with respect to their limited partner and silent partner contributions in AMD Fab
36 KG. The partnership was established for an indefinite period of time. A partner may terminate its participation in the partnership by giving twelve months
advance notice to the other partners. The termination becomes effective at the end of the year following the year during which the notice is given. However, other
than for good cause, a partner’s termination will not be effective before December 31, 2015.
The partnership agreements set forth each limited partner’s aggregate capital contribution to AMD Fab 36 KG and the milestones for such contributions.
Pursuant to the terms of the partnership agreements, AMD, through AMD Fab 36 Holding and AMD Fab 36 Admin, agreed to provide an aggregate of $860
million, Leipziger Messe agreed to provide an aggregate of $294 million and Fab 36 Beteiligungs agreed to provide an aggregate of $176 million. The capital
contributions of Leipziger Messe and Fab 36 Beteiligungs are comprised
123
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008