AMD 1996 Annual Report Download - page 113

of manufacture by a recognized testing laboratory. COMPANY, COMPANY'S Inspector
or any other authorized Representative of COMPANY, may reject improper,
inferior, defective, or unsuitable workmanship or materials at any stage of the
Construction Work; and, in accordance with the provisions of Article 19 hereof,
----------
all workmanship and materials so rejected shall be repaired or replaced
forthwith by CONTRACTOR. If any work should be covered up without approval or
consent of COMPANY, it shall, if required by COMPANY, be uncovered for
examination at CONTRACTOR'S expense. Reexamination of questioned Construction
Work, not specifically required to be tested or approved, may be ordered by
COMPANY and, if so ordered, the Construction Work shall be uncovered by
CONTRACTOR. If such Construction Work is found to be in accordance with the
Contract Documents, COMPANY will pay the cost of reexamination and replacement.
If such Construction Work is found to be not in accordance with the Contract
Documents, CONTRACTOR shall correct the defective Construction Work, and the
cost of reexamination and correction of the defective Construction Work shall be
paid by CONTRACTOR. Any defective Construction Work, performed or furnished by
CONTRACTOR, that may be discovered by COMPANY before the Final Acceptance of the
Facility or before final payment has been made, shall be removed and replaced or
patched, in a manner as approved by COMPANY at the expense of CONTRACTOR and
prior to Final Acceptance and payment for all work. COMPANY'S exercise of its
right of inspection shall not relieve CONTRACTOR of any of its obligations set
forth herein above in this Article 11.
----------
11.5 COMPANY'S INSPECTOR. COMPANY may select one or more persons to act as
-------------------
its Representative in matters of inspection ("COMPANY'S INSPECTOR"); and
COMPANY'S Inspector shall have free entry to the shops of CONTRACTOR, and to the
Site at all times while any work on the Facility or on materials therefor is
being performed. CONTRACTOR shall direct its subcontractors and vendors to
provide such free entry to the shops of any subcontractors or vendors for
COMPANY'S Inspector. All work and materials furnished under the Contract shall
be subject to the approval of COMPANY'S Inspector, but his approval shall not
relieve CONTRACTOR of any responsibility for improper, inferior, defective, or
unsuitable workmanship or materials. Furthermore, no failure or omission of
COMPANY'S Inspector to condemn any improper, inferior, defective, or unsuitable
workmanship or materials shall release CONTRACTOR from its obligations to
correct same as soon as discovered. Neither COMPANY nor COMPANY'S Inspector
shall have any right under Section 11.4 or this Section 11.5 to direct
------------ ------------
subcontractors or vendors to take or omit to take any action. COMPANY and
COMPANY'S Inspector shall deal only with CONTRACTOR, and CONTRACTOR shall be
responsible for determining whether or not any subcontractor or vendor is
required to take or omit to take any action and for determining the nature of
any action that must be taken or omitted by any subcontractor or vendor.
CONTRACTOR shall assure that every subcontractor and vendor is aware of these
limitations on COMPANY and COMPANY'S Inspector.
11.6 INSPECTION OF FABRICATION. Except in cases where COMPANY shall have
-------------------------
previously waived in writing its inspection at the point of manufacture or
supply, CONTRACTOR shall give COMPANY'S Inspector not less than ten (10) working
days' notice in advance of the start of fabrication, and such additional notices
as he may need regarding the progress of fabrication and intended shipping dates
for materials which CONTRACTOR is to furnish hereunder in order to allow him
ample time in which to witness any part of the fabrication or manufacture, make
any measurements, witness any tests and carry out any other inspection which he
deems advisable. No materials which COMPANY inspects at the point of
manufacture or supply shall be shipped without the prior written approval of
COMPANY'S Inspector. COMPANY'S Inspector shall grant or deny his approval,
based upon his good faith business judgment that the requirements of the
Contract have been achieved, within a reasonable period of time. If COMPANY'S
Inspector fails to approve or disapprove inspected materials within a reasonable
period of time, CONTRACTOR shall have
27
Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997