AMD 1996 Annual Report Download - page 159

the Facility is substantially completed on a day other than the last day of a
Delay Week, the amount of penalties shall be pro-rated on the basis of a 7-day
week. Notwithstanding anything to the contrary contained in this Article, in no
event shall the amount of contract penalties payable by CONTRACTOR under this
Section 37.2 exceed DEM10,000,000, and in no event shall COMPANY be obligated
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to prove the existence or extent of damages as a precondition to receiving
payment. COMPANY may claim the foregoing penalties prior to, in connection with
or after Final Acceptance of the Facility or final payment of the Contract
Amount.
37.3 SUBCONTRACT PENALTY CLAUSES. If and to the extent CONTRACTOR
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has a claim for payment of contract penalties against its subcontractors or
vendors because such subcontractors or vendors have exceeded any contractual
deadlines under the subcontracts or purchase orders, CONTRACTOR agrees to fully
enforce such contract penalties against its subcontractors or vendors at its own
cost. CONTRACTOR shall pay to COMPANY 50% of the contract penalties paid by its
subcontractors or vendors (for purposes of clarification, the DEM10,000,000
limit in Section 37.2 does not apply to this Section 37.3). Payment of contract
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penalties by any subcontractor or vendor will be deemed to exist also if
CONTRACTOR can offset its claim for contract penalties against other claims of
such subcontractor or vendor. CONTRACTOR shall, without COMPANY'S request,
inform COMPANY at all times of the enforcement of its contract penalties.
Further, immediately after acceptance by CONTRACTOR of the work performed by any
subcontractor or vendor, however, no later than upon receipt of the
subcontractor's or vendor's final invoice, CONTRACTOR shall inform COMPANY in
detail whether CONTRACTOR has a claim for contract penalties against the
subcontractor or vendor, whether CONTRACTOR will enforce such claim, whether
CONTRACTOR has already received payment, whether CONTRACTOR has offset the claim
for contract penalties against outstanding claims of the subcontractor or vendor
or whether (and if so, why) there exist no claims for contract penalties against
the subcontractor or vendor. CONTRACTOR shall include a valid contract penalty
clause in each subcontract and purchase order concluded by CONTRACTOR, and
CONTRACTOR shall use its best efforts to have the contract penalty clause be
equal to ten percent (10%) of the total amount of the subcontract or purchase
order. COMPANY shall be entitled to enforce this claim for payment only if the
prerequisites as mentioned in Section 37.1 above toward CONTRACTOR exist. If
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CONTRACTOR fails to enforce any such claim, CONTRACTOR shall assign such claim
to COMPANY, and COMPANY shall be entitled to enforce such claim.
37.4 SET-OFF OF CONTRACT PENALTIES. Any contract penalty actually paid
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by CONTRACTOR shall be set off against the amount of any damages actually paid
to COMPANY by virtue of CONTRACTOR'S failure to execute the design and
engineering services or the Construction Work in a timely manner.
ARTICLE 38
COMPLIANCE WITH LAWS, CHOICE OF LAW, CHOICE OF FORUM, CONTRACT LANGUAGE
38.1 COMPLIANCE WITH APPLICABLE LAW. CONTRACTOR shall comply with, and
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shall require that all its subcontractors and vendors comply with, all municipal
ordinances, state, and federal laws applicable to the Facility and all
applicable orders, regulations, and directives issued thereunder by any
authorized government agency, and any amendments thereto, in the performance of
the Contract and will furnish or cause to be furnished to COMPANY, such
stipulations, statements, or certificates evidencing such compliance therewith
as COMPANY may require for its protection. All materials and workmanship shall
comply with all laws, ordinances, codes, orders, regulations, rules, directives
and the latest standards applicable thereto.
38.2 INDEMNITY FOR VIOLATION. If, in the execution or performance of this
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Contract, CONTRACTOR shall have violated any laws, rules, orders, regulations,
or ordinances applicable to the work hereunder, then CONTRACTOR
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997