AMD 2010 Annual Report Download - page 115

The 7.75% Indenture contains certain covenants that limit, among other things, the Company’s ability and
the ability of its subsidiaries, from:
• incurring additional indebtedness, except specified permitted debt;
• paying dividends and making other restricted payments;
• making certain investments if an event of a default exists, or if specified financial conditions are not
satisfied;
• creating or permitting certain liens;
• creating or permitting restrictions on the ability of its subsidiaries to pay dividends or make other
distributions to the Company;
• using the proceeds from sales of assets;
• entering into certain types of transactions with affiliates; and
• consolidating, merging or selling its assets as an entirety or substantially as an entirety.
The 7.75% Notes rank equally with the Company’s existing and future senior debt and are senior to all of
the Company’s future subordinated debt. The 7.75% Notes rank junior to all of the Company’s existing and
future senior secured debt to the extent of the collateral securing such debt and are structurally subordinated to all
existing and future debt and liabilities of the Company’s subsidiaries.
The Company may elect to purchase or otherwise retire the 7.75% Notes with cash, stock or other assets
from time to time in open market or private negotiated transactions, either directly or through intermediaries, or
by tender offer, when the Company believes the market conditions are favorable to do so.
The agreements governing its 5.75% Notes, 6.00% Notes, 8.125% Notes and 7.75% Notes contain cross-
default provisions whereby a default under one agreement would likely result in cross defaults under agreements
covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit
the applicable note holders to declare all amounts outstanding under those borrowing arrangements to be
immediately due and payable.
Fab 36 Term Loan and Guarantee
On April 21, 2004, AMD Fab 36 KG, the legal entity that owned Fab 36, the Company’s former
300-millimeter wafer fabrication facility, entered into a 700 million euro Term Loan Facility Agreement among
AMD Fab 36 KG, as borrower, and a consortium of banks led by Dresdner Bank AG, as lenders, (the Fab 36
Term Loan) and other related agreements (collectively, the Fab 36 Loan Agreements) to finance the purchase of
equipment and tools required to operate Fab 36. The Company guaranteed the obligations of AMD Fab 36 KG to
the lender under the Fab 36 Loan Agreements.
In connection with the consummation of the GF manufacturing joint venture transaction on March 2, 2009,
the terms of the Fab 36 Loan Agreements were amended to allow for the transfer of the former 300-millimeter
wafer fabrication facility and its affiliated companies to GF. In addition, the Company also amended the terms of
the related guarantee agreement such that the Company and GF are joint guarantors of the borrower’s obligations
to the lenders under the Fab 36 Loan Agreements. However, if the Company is called upon to make any
payments under the guarantee agreement, GF has separately agreed to indemnify the Company for the full
amount of such payments. As of December 25, 2010, the total amount outstanding under the Fab 36 Term Loan
was $170 million, and the rate of interest on the loan was 2%. This loan is repayable by GF in quarterly
installments which terminate in March 2011.
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