Adaptec 2003 Annual Report Download - page 74

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partnership or trust formed in the United States, and the surviving entity assumes PMC’s obligations under the indenture, including the
payment of principal and interest on the notes and, no event of default has occurred and is continuing.
During the third fiscal quarter of 2003, the Company repurchased $100 million principal amount of these notes for $96.7 million and
wrote off $1.6 million of related unamortized debt issue costs, resulting in a net gain of $1.7 million.
On January 6, 2004, the Company repurchased $106.9 million of these notes pursuant to a tender offer, at par value. The Company
will write off approximately $1.6 million of debt issue costs related to the repurchased notes.
NOTE 8. Commitments and Contingencies
Operating leases. The Company leases its facilities under operating lease agreements, which expire at various dates through
September 30, 2011.
Rent expense including operating costs for the years ended December 31, 2003, 2002 and 2001 was $11.5 million, $12.4 million and
$15.9 million, respectively. Excluded from rent expense for 2003 was additional rent and operating costs of $20.9 million (2002 –
$27.5 million; 2001 − $3.4 million) related to excess facilities, which were accrued as part of the restructuring charges in 2003 and
2001.
Minimum future rental payments under operating leases are as follows:
Year Ending December 31 (in thousands)
2004 $ 10,971
2005 9,592
2006 9,023
2007 9,115
2008 11,118
Thereafter 17,090
Total minimum future rental payments under operating leases $ 66,909
Supply agreements. The Company has supply agreements with both Chartered and TSMC that we renewed during 2003. These
renewed agreements are in effect until December 31, 2004. As a result of these renewals, the deposits the Company made to secure
access to wafer fabrication capacity decreased to $6.8 million from $22 million at December 31, 2002. Under these agreements, the
foundries must supply certain quantities of wafers per year. Neither of these agreements have minimum unit volume requirements but
we are obliged under one of the agreements to purchase a minimum percentage of our total annual wafer requirements provided that
the foundry is able to continue to offer competitive technology, pricing, quality and delivery. The agreements may be terminated if
either party does not comply with the terms.
Investment agreements. The Company participates in four professionally managed venture funds that invest in early−stage private
technology companies which participate in markets of
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