AMD » Topics » 2 CONSIDERATION

This excerpt taken from the AMD 10-Q filed Nov 9, 2006.

§ 2 CONSIDERATION

 

2.1 Amount to be compensated. AMD Fab 36 shall compensate AMD Saxony or AMD Inc., as the case may be, on a monthly basis in an amount equal to the costs incurred by AMD Saxony or AMD Inc., as the case may be, and any reasonable related expenses (including without limitation salaries and other costs for AMD Saxony or, as the case may be, AMD Inc. employees) and expenses, plus a markup of 5% on such costs and expenses (above all, travel expenses) plus value added and/or sales taxes, if applicable, at the prevailing rate. Expenses in this sense shall mean services of third parties to AMD Inc. or AMD Saxony, as the case may be, other than those owed as principal Services according to Section 1.1 hereof.

Insofar as the costs were incurred by AMD Saxony or, as the case may be, AMD Inc. for the compensation of third-party Services, such costs (insofar as they represent expenses in the sense of the preceding paragraph) shall be passed through to AMD Fab 36 without the mark up stated in the preceding paragraph. Likewise, payments made by AMD Saxony or, as the case may be, AMD Inc. to third parties for the purchase of assets, materials or other objects the purchase of which AMD Fab 36 requests and which are ultimately intended for use by Fab 36 shall be charged on to Fab 36 without markup.

Arbitrator. If and insofar as AMD Fab 36 considers to be inadequate the remuneration for the Services rendered directly by AMD Saxony or, as the case may

 

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be, AMD Inc. and if the Parties cannot agree on the amount of remuneration, the Parties will make efforts to promptly agree on an arbitrator and instruct same in the name of all parties to establish the adequacy of the remuneration with final and binding effect on the Parties within the framework of the positions taken by the parties. The Parties shall be given reasonable opportunity to state their positions in writing as well as in the course of one or more hearings before the arbitrator. The arbitrator shall provide reasons for his decision. In his decision, the arbitrator shall also decide on the distribution of costs of the arbitration based on who wins and who loses the dispute (§§ 91 et seqq. German Code of Civil Procedure), although each Party shall bear the costs of its own advisors. The factual findings of the arbitrator shall be final and binding on the Parties. If the Parties have not agreed on an arbitrator within 10 bank working days, on the request of any one Party the President of the Dresden OLG (Higher Regional Court) shall, with binding effect for the Parties, nominate an expert or consultancy company as arbitrator. The arbitrator must not have, and not have had within the past five (5) years, any business relations with any Party or a company affiliated with it in the sense of § 15 AktG (German Stock Corporations Act).

 

2.2 Invoices. Each of AMD Saxony and AMD Inc. shall provide, on a monthly basis, statements of account to AMD Fab 36 detailing the Services rendered and specifying the costs incurred within the meaning of Section 2.1.

 

2.3 Payments to AMD Saxony. All invoices that are delivered to AMD Fab 36 by AMD Saxony shall be paid by AMD Fab 36 in cash within thirty days from its receipt of the relevant invoice. Payments by AMD Fab 36 shall be made according to AMD Fab 36’s choice in the lawful currency of the Federal Republic of Germany (“Euro”) or in US-Dollar by wire transfer.

 

2.4 Payments to AMD Inc. (Wire Transfer). All invoices that are issued by AMD Inc. to AMD Fab 36 shall be paid by AMD Fab 36 in cash by the earlier of (i) thirty days from its receipt of the relevant invoice, or (ii) – only with respect to invoices issued for Services rendered prior to the Effective Date (as defined in the AMD Fab 36 Cost Plus Reimbursement Agreement)- ten days after the Effective Date. Payments by AMD Fab 36 shall be made according to AMD Fab 36’s choice in the lawful currency of the Federal Republic of Germany (“Euro”) or in US-Dollar by wire transfer.

 

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2.5 Payments to AMD Inc. (Assignment, Crediting). All payments to be made by AMD Fab 36 to AMD Inc. hereunder for Services rendered after the Effective Date may also be made in the form of credits against amounts owed or to be owed by AMD Fab 36 Holding to AMD Fab 36 under the AMD Fab 36 Cost Plus Reimbursement Agreement, and for this purpose AMD Inc. hereby agrees to assign, upon request by AMD Fab 36, to AMD Fab 36 Holding its entire right, title and interest in compensation for Services hereunder rendered after the Effective Date. In consideration of this assignment, AMD Fab 36 Holding hereby agrees that, promptly upon being credited for any amount by AMD Fab 36 under this Section 2.5, it shall credit AMD Inc. against amounts owed or to be owed by AMD Inc. to AMD Fab 36 Holding under the AMD Fab 36 Holding Cost Plus Reimbursement Agreement.

 

2.6 Maintenance of books and records. AMD Saxony and AMD Inc. shall keep and maintain, in accordance with generally accepted accounting principles, books and other records with respect to the costs charged by AMD Saxony or AMD Inc., respectively, to AMD Fab 36 under this Agreement.

 

2.7 No duplication of Article III of the AMD Fab 36 Cost Plus Reimbursement Agreement. The Services provided by AMD Saxony or AMD Inc. hereunder shall not include the assistance and advice provided by or on behalf of AMD Fab 36 Holding to AMD Fab 36 pursuant to Article III of the AMD Fab 36 Cost Plus Reimbursement Agreement. Such assistance and advice will be invoiced according to Article III (4) of the AMD Fab 36 Cost Plus Reimbursement Agreement.

 

2.8 Audit. AMD Fab 36 shall, upon reasonable written notice to AMD Saxony or AMD Inc., as the case may be, have a right to perform a special audit of AMD Saxony or AMD Inc. by independent outside auditors, at AMD Fab 36’s own cost. The scope of the audit shall be limited to the relevant invoices and supporting documentation for this Agreement.
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