AMD » Topics » Senior Secured Term Loan Facility

These excerpts taken from the AMD 10-K filed Feb 24, 2009.

Senior Secured Term Loan Facility

In May 2007, in connection with the issuance of its Senior Secured Floating Rate Notes (see below), the Company repaid and cancelled the Senior Secured Term Loan Facility of $500.0 million principal amount. The Company recognized a loss on early extinguishment of debt of approximately $3.4 million as a result of the write-off of unamortized Senior Secured Term Loan Facility issuance costs.

Senior Secured Term Loan Facility

On November 1, 2006, Spansion LLC entered into a new senior secured term loan facility with a certain domestic financial institution, as administrative agent, and the lenders party thereto, in the aggregate amount of


Spansion Inc.

Notes to Consolidated Financial Statements—(Continued)

 

$500 million. The Company, along with STI, Spansion International, Inc. and Cerium Laboratories LLC, or Cerium, are guarantors of Spansion LLC’s obligations under the senior secured term loan facility. Amounts borrowed under the senior secured term loan facility bear interest equal to either (at Spansion LLC’s option) (a) LIBOR, plus a 3.0 percent margin or 2.75 percent margin depending upon the Company’s credit rating or (b) the base rate, defined as the higher of (i) the administrative agent’s prime rate and (ii) the federal funds rate (as defined in the credit agreement for the senior secured term loan facility) plus 0.50 percent, plus a 2.0 percent margin or 1.75 percent margin depending upon the Company’s credit rating. The senior secured term loan facility will terminate and all outstanding borrowings must be repaid no later than November 3, 2012.

In connection with the senior secured term loan facility, the Company and each of Spansion LLC, STI, Spansion International and Cerium, collectively referred to as the loan parties, executed a pledge and security agreement pursuant to which the administrative agent received a first priority security interest in (a) all present and future capital stock of each of the Company’s present and future direct and indirect subsidiaries, limited in the case of foreign subsidiaries to a pledge of 65 percent of the capital stock of each first-tier foreign subsidiary, (b) all present and future debt of each loan party, but excluding certain intercompany debt to a foreign subsidiary, (c) all present and future other property and assets of each loan party, but excluding intellectual property and any equipment subject to a lien securing a capitalized lease permitted by the credit agreement for the senior secured term loan facility, and (d) all proceeds and products of the property and assets described above. The net book value of the pledged assets as of December 31, 2006 was approximately $663.5 million.

Pursuant to the terms of the senior secured term loan facility, and subject to certain exceptions, Spansion LLC and its subsidiaries are limited in their ability, among other things, to:

 

   

create or permit liens;

 

   

incur indebtedness, subject to certain exceptions, including existing indebtedness under Spansion LLC’s 11.25% Senior Notes indenture, Spansion LLC’s 2.25% Exchangeable Senior Subordinated Debentures indenture, the senior secured revolving credit facility, capital leases not to exceed 15 percent of Spansion Inc.’s total assets, indebtedness of acquired subsidiaries existing at the time of such acquisition and up to $500 million for capital expenditures at SP1;

 

   

make or hold investments above certain thresholds;

 

   

have interest coverage and minimum liquidity of less than specified amounts;

 

   

consolidate, merge or sell assets as an entirety or substantially as an entirety;

 

   

make any disposition of properties, including any sale leaseback transaction;

 

   

make certain distributions, stock redemptions or other payments on account of any equity interests;

 

   

enter into certain types of transactions with affiliates;

 

   

make or become obligated to make any capital expenditures except for those in the ordinary course of business not to exceed specified amounts; and

 

   

voluntarily prepay any indebtedness.

In addition, under the senior secured term loan facility, the Company is not permitted to engage in any business or activity other than, among other things, holding equity interests in Spansion LLC and STI and activities incidental to being a publicly traded company.

Amounts outstanding under the senior secured term loan facility may become immediately due and payable upon the occurrence of specified events, including, among other things: failure to pay any obligations under the senior secured term loan facility; the breach of any representation or warranty or certain covenants; any default in


Spansion Inc.

Notes to Consolidated Financial Statements—(Continued)

 

the payment when due of indebtedness of more than $25 million; filings or proceedings in bankruptcy; judgments or awards entered against the Company, Spansion LLC, STI, Spansion International, Cerium or any subsidiaries involving aggregate liability of $10 million or more; or a change of control (as defined in the credit agreement for the senior secured term loan facility).

Senior Secured Term Loan Facility

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">In May 2007, in connection with the issuance of its Senior Secured Floating Rate Notes (see below), the Company repaid and cancelled the Senior Secured
Term Loan Facility of $500.0 million principal amount. The Company recognized a loss on early extinguishment of debt of approximately $3.4 million as a result of the write-off of unamortized Senior Secured Term Loan Facility issuance costs.

These excerpts taken from the AMD 10-K filed Feb 26, 2008.

Senior Secured Term Loan Facility

In May 2007, in connection with the issuance of its Senior Secured Floating Rate Notes (see below), the Company repaid and cancelled the Senior Secured Term Loan Facility of $500.0 million principal amount. The Company recognized a loss on early extinguishment of debt of approximately $3.4 million as a result of the write-off of unamortized Senior Secured Term Loan Facility issuance costs.

Senior Secured Term Loan Facility

On November 1, 2006, Spansion LLC entered into a new senior secured term loan facility with a certain domestic financial institution, as administrative agent, and the lenders party thereto, in the aggregate amount of


Spansion Inc.

Notes to Consolidated Financial Statements—(Continued)

 

$500 million. The Company, along with STI, Spansion International, Inc. and Cerium Laboratories LLC, or Cerium, are guarantors of Spansion LLC’s obligations under the senior secured term loan facility. Amounts borrowed under the senior secured term loan facility bear interest equal to either (at Spansion LLC’s option) (a) LIBOR, plus a 3.0 percent margin or 2.75 percent margin depending upon the Company’s credit rating or (b) the base rate, defined as the higher of (i) the administrative agent’s prime rate and (ii) the federal funds rate (as defined in the credit agreement for the senior secured term loan facility) plus 0.50 percent, plus a 2.0 percent margin or 1.75 percent margin depending upon the Company’s credit rating. The senior secured term loan facility will terminate and all outstanding borrowings must be repaid no later than November 3, 2012.

In connection with the senior secured term loan facility, the Company and each of Spansion LLC, STI, Spansion International and Cerium, collectively referred to as the loan parties, executed a pledge and security agreement pursuant to which the administrative agent received a first priority security interest in (a) all present and future capital stock of each of the Company’s present and future direct and indirect subsidiaries, limited in the case of foreign subsidiaries to a pledge of 65 percent of the capital stock of each first-tier foreign subsidiary, (b) all present and future debt of each loan party, but excluding certain intercompany debt to a foreign subsidiary, (c) all present and future other property and assets of each loan party, but excluding intellectual property and any equipment subject to a lien securing a capitalized lease permitted by the credit agreement for the senior secured term loan facility, and (d) all proceeds and products of the property and assets described above. The net book value of the pledged assets as of December 31, 2006 was approximately $663.5 million.

Pursuant to the terms of the senior secured term loan facility, and subject to certain exceptions, Spansion LLC and its subsidiaries are limited in their ability, among other things, to:

 

   

create or permit liens;

 

   

incur indebtedness, subject to certain exceptions, including existing indebtedness under Spansion LLC’s 11.25% Senior Notes indenture, Spansion LLC’s 2.25% Exchangeable Senior Subordinated Debentures indenture, the senior secured revolving credit facility, capital leases not to exceed 15 percent of Spansion Inc.’s total assets, indebtedness of acquired subsidiaries existing at the time of such acquisition and up to $500 million for capital expenditures at SP1;

 

   

make or hold investments above certain thresholds;

 

   

have interest coverage and minimum liquidity of less than specified amounts;

 

   

consolidate, merge or sell assets as an entirety or substantially as an entirety;

 

   

make any disposition of properties, including any sale leaseback transaction;

 

   

make certain distributions, stock redemptions or other payments on account of any equity interests;

 

   

enter into certain types of transactions with affiliates;

 

   

make or become obligated to make any capital expenditures except for those in the ordinary course of business not to exceed specified amounts; and

 

   

voluntarily prepay any indebtedness.

In addition, under the senior secured term loan facility, the Company is not permitted to engage in any business or activity other than, among other things, holding equity interests in Spansion LLC and STI and activities incidental to being a publicly traded company.

Amounts outstanding under the senior secured term loan facility may become immediately due and payable upon the occurrence of specified events, including, among other things: failure to pay any obligations under the senior secured term loan facility; the breach of any representation or warranty or certain covenants; any default in


Spansion Inc.

Notes to Consolidated Financial Statements—(Continued)

 

the payment when due of indebtedness of more than $25 million; filings or proceedings in bankruptcy; judgments or awards entered against the Company, Spansion LLC, STI, Spansion International, Cerium or any subsidiaries involving aggregate liability of $10 million or more; or a change of control (as defined in the credit agreement for the senior secured term loan facility).

Senior Secured Term Loan Facility

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">In May 2007, in connection with the issuance of its Senior Secured Floating Rate Notes (see below), the Company repaid and cancelled the Senior Secured
Term Loan Facility of $500.0 million principal amount. The Company recognized a loss on early extinguishment of debt of approximately $3.4 million as a result of the write-off of unamortized Senior Secured Term Loan Facility issuance costs.

This excerpt taken from the AMD 10-K filed Mar 1, 2007.

Senior Secured Term Loan Facility

 

On November 1, 2006, Spansion LLC entered into a new senior secured term loan facility with a certain domestic financial institution, as administrative agent, and the lenders party thereto, in the aggregate amount of


Spansion Inc.

 

Notes to Consolidated Financial Statements—(Continued)

 

$500 million. The Company, along with STI, Spansion International, Inc. and Cerium Laboratories LLC, or Cerium, are guarantors of Spansion LLC’s obligations under the senior secured term loan facility. Amounts borrowed under the senior secured term loan facility bear interest equal to either (at Spansion LLC’s option) (a) LIBOR, plus a 3.0 percent margin or 2.75 percent margin depending upon the Company’s credit rating or (b) the base rate, defined as the higher of (i) the administrative agent’s prime rate and (ii) the federal funds rate (as defined in the credit agreement for the senior secured term loan facility) plus 0.50 percent, plus a 2.0 percent margin or 1.75 percent margin depending upon the Company’s credit rating. The senior secured term loan facility will terminate and all outstanding borrowings must be repaid no later than November 3, 2012.

 

In connection with the senior secured term loan facility, the Company and each of Spansion LLC, STI, Spansion International and Cerium, collectively referred to as the loan parties, executed a pledge and security agreement pursuant to which the administrative agent received a first priority security interest in (a) all present and future capital stock of each of the Company’s present and future direct and indirect subsidiaries, limited in the case of foreign subsidiaries to a pledge of 65 percent of the capital stock of each first-tier foreign subsidiary, (b) all present and future debt of each loan party, but excluding certain intercompany debt to a foreign subsidiary, (c) all present and future other property and assets of each loan party, but excluding intellectual property and any equipment subject to a lien securing a capitalized lease permitted by the credit agreement for the senior secured term loan facility, and (d) all proceeds and products of the property and assets described above. The net book value of the pledged assets as of December 31, 2006 was approximately $663.5 million.

 

Pursuant to the terms of the senior secured term loan facility, and subject to certain exceptions, Spansion LLC and its subsidiaries are limited in their ability, among other things, to:

 

   

create or permit liens;

 

   

incur indebtedness, subject to certain exceptions, including existing indebtedness under Spansion LLC’s 11.25% Senior Notes indenture, Spansion LLC’s 2.25% Exchangeable Senior Subordinated Debentures indenture, the senior secured revolving credit facility, capital leases not to exceed 15 percent of Spansion Inc.’s total assets, indebtedness of acquired subsidiaries existing at the time of such acquisition and up to $500 million for capital expenditures at SP1;

 

   

make or hold investments above certain thresholds;

 

   

have interest coverage and minimum liquidity of less than specified amounts;

 

   

consolidate, merge or sell assets as an entirety or substantially as an entirety;

 

   

make any disposition of properties, including any sale leaseback transaction;

 

   

make certain distributions, stock redemptions or other payments on account of any equity interests;

 

   

enter into certain types of transactions with affiliates;

 

   

make or become obligated to make any capital expenditures except for those in the ordinary course of business not to exceed specified amounts; and

 

   

voluntarily prepay any indebtedness.

 

In addition, under the senior secured term loan facility, the Company is not permitted to engage in any business or activity other than, among other things, holding equity interests in Spansion LLC and STI and activities incidental to being a publicly traded company.

 

Amounts outstanding under the senior secured term loan facility may become immediately due and payable upon the occurrence of specified events, including, among other things: failure to pay any obligations under the senior secured term loan facility; the breach of any representation or warranty or certain covenants; any default in


Spansion Inc.

 

Notes to Consolidated Financial Statements—(Continued)

 

the payment when due of indebtedness of more than $25 million; filings or proceedings in bankruptcy; judgments or awards entered against the Company, Spansion LLC, STI, Spansion International, Cerium or any subsidiaries involving aggregate liability of $10 million or more; or a change of control (as defined in the credit agreement for the senior secured term loan facility).

 

This excerpt taken from the AMD 8-K filed Jul 24, 2006.

$2,500,000,000 SENIOR SECURED TERM LOAN FACILITY

[Capitalized terms not otherwise defined herein have the same meanings as

specified therefor in the Commitment Letter to which this Annex II is attached]

 

Conditions Precedent

    

to Closing:

   The closing and the initial extension of credit under the Term Loan Facility will be subject to satisfaction (or
waiver) of the following conditions precedent:
   (i)   The final terms and conditions of the Transaction, including, without limitation, all material legal and tax aspects thereof, shall be as described in the Commitment Letter and otherwise consistent with the description thereof received in writing as part of the Pre-Commitment Information or otherwise reasonably satisfactory to the Lenders. The Lenders shall be reasonably satisfied with (x) the Purchase Agreement (including all schedules and exhibits thereto), which shall provide for an aggregate cash purchase price not in excess of $5,389,000,000 and (y) all other agreements, instruments and documents relating to the Transaction; and the Purchase Agreement and such other agreements, instruments and documents relating to the Transaction shall not be altered, amended or otherwise changed or supplemented or any condition therein waived, in each case in any manner materially adverse to the Lenders, without the prior written consent of the Administrative Agent (it being agreed that the draft Purchase Agreement dated July 23, 2006 is satisfactory to the Administrative Agent). The Acquisition shall have been consummated substantially in accordance with the terms of the Purchase Agreement and in compliance with applicable law.
   (ii)   The execution and delivery of definitive documentation with respect to the Term Loan Facility consistent with the Summary of Terms and the Commitment Letter.
   (iii)   All of the capital stock of the Borrower’s restricted subsidiaries shall be owned by the Borrower or one or more of the Borrower’s subsidiaries (except, with respect to foreign subsidiaries, for insignificant interests statutorily required to be owned by another person), in each case free and clear of any lien, charge or encumbrance not permitted under the loan documentation; the Lenders shall have a valid and perfected first priority (subject to certain exceptions to be set forth in the loan documentation) lien and security interest in such capital stock and in the other collateral referred to under the section “Security” above; all filings, recordations and searches necessary or desirable in connection with such liens and security interests

 

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         shall have been duly made; and all filing and recording fees and taxes shall have been duly paid. To the
extent required by the terms of the Borrower’s Existing Senior Notes, the Existing Senior Notes shall
be equally and ratably secured by such of the collateral as required by the related indenture. The
Lenders will agree that upon distribution of the proceeds from the sale of collateral, such proceeds
allocable to any of the Term Loans under the security documentation shall be applied in a manner such
that all of the Lenders shall share ratably in such application.
  (iv)    There shall exist no action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental or regulatory agency or authority that (a) could reasonably be expected to (i) have a material adverse effect on the business, condition (financial or otherwise), operations, performance or properties of the Borrower, the Company and their subsidiaries, taken as a whole, (ii) adversely affect the ability of the Borrower to perform its obligations under the loan documentation for each Facility or (iii) adversely affect the rights and remedies of the Administrative Agent and the Lenders under the loan documentation (collectively, a “Material Adverse Effect”) or (b) purports to adversely affect the Transaction or the Term Loan Facility.
  (v)    All material governmental and third party consents and approvals necessary in connection with the Transaction and the Term Loan Facility shall have been obtained (without the imposition of any conditions that are not reasonably acceptable to the Lenders) and shall remain in effect; all applicable waiting periods shall have expired without any materially adverse action being taken by any competent authority; and no law or regulation shall be applicable in the judgment of the Lenders that restrains, prevents or imposes materially adverse conditions upon the Transaction or the Term Loan Facility.
  (vi)    All loans made by the Lenders to the Borrower or any of its affiliates shall be in full compliance with the Federal Reserve’s Margin Regulations.
  (vii)    The Borrower shall have delivered certificates, in form and substance satisfactory to the Lenders, attesting to the Solvency (as hereinafter defined) of the Borrower, individually and together with its subsidiaries, taken as a whole, immediately before and immediately after giving effect to the Transaction, from its chief financial officer. As used herein, the term “Solvency” of any person means (i) the fair value of the property of such person exceeds its total liabilities (including, without limitation, contingent liabilities), (ii) the present fair saleable value of the assets of such person is not less than the amount that will be required to pay its probable liability on its debts as they

 

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          become absolute and matured, (iii) such person does not intend to, and does not believe that it will,
incur debts or liabilities beyond its ability to pay as such debts and liabilities mature and (iv) such
person is not engaged, and is not about to engage, in business or a transaction for which its property
would constitute an unreasonably small capital.
   (viii)    The Lenders shall have received annual financial statements as of the end of the most recently completed three fiscal years, interim financial statements dated the end of the most recent fiscal quarter for which financial statements are available (or, in the event the Lenders’ due diligence review reveals material changes since such financial statements, as of a later date within 45 days of the Closing Date), pro forma consolidated financial statements as to the Borrower and its subsidiaries, and forecasts prepared by management of the Borrower, in a form satisfactory to the Lenders, of balance sheets, income statements and cash flow statements on a quarterly basis for the first year following the Closing Date and on an annual basis for each year thereafter during the term of the Term Loan Facility.
   (ix)    The Lenders under the Term Loan Facility shall have received (a) customary opinions of counsel (including local counsel) for the Borrower as to the transactions contemplated hereby and (b) such corporate resolutions, certificates (including insurance certificates) and other documents as the Lenders under Term Loan Facility shall reasonably request.
   (x)    There shall exist no default under any of the loan documentation for the Term Loan Facility, and the representations and warranties of the Borrower and each of its subsidiaries therein shall be true and correct immediately prior to, and after giving effect to, the initial extension of credit under the Term Loan Facility.
   (xi)    All accrued fees and expenses of the Senior Administrative Agent, the Senior Sole Arranger and the Senior Lenders (including the fees and expenses of one counsel (including one local counsel in each relevant jurisdiction) for the Senior Administrative Agent and the Senior Sole Arranger and local counsel for the Senior Lenders) shall have been paid.
   (xii)    The Company’s existing credit facility shall have been, or concurrently with the extension of credit under the Facility shall be, terminated and all amounts outstanding thereunder, if any shall have been paid off and all liens shall have been released pursuant to a termination letter reasonably satisfactory to the Senior Administrative Agent.

 

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