AMD 1996 Annual Report Download - page 132

Costs of the kinds covered in Section 16.2.1 above that are incurred by
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CONTRACTOR in connection with field work performed under lump sum subcontracts
referred to in this Section 16.9 shall merge with or be reflected by the
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charges under said lump sum subcontracts. Provided, however, that the amount
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of any lump sum subcontract shall exclude applicable value added taxes
(including the Import Turnover Tax) and other applicable taxes and all value
added taxes and other applicable taxes shall be calculated and identified
separately on all invoices from a subcontractor under a lump sum contract and on
CONTRACTOR'S Application for Payment.
16.10 ADJUSTMENT IN FEE. The Fee is firm and shall not be subject to
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adjustment except (i) in cases where it is mutually agreed that CONTRACTOR'S
services and general overhead costs are significantly increased as a result of
an act or omission of COMPANY not authorized by the Contract or if the Facility
is destroyed or suffers major damage and CONTRACTOR is required to rebuild or
repair same pursuant to Article 22 hereof, or (ii) if major changes, additions
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or omissions are made in the scope of the work pursuant to Section 10.2 and
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approved by Change Order or (iii) if it is determined that restructuring of the
Fee would be in the best interest of COMPANY and CONTRACTOR agrees to such
restructuring. A major change, addition or omission in the scope of the work
shall not be construed to have occurred unless it involves a change in the scope
of the work that increases or decreases the Budgeted Cost of the Work by more
than twenty percent (20%). In the event of a major change, addition or omission
in the scope of the work as described in Clause (ii) of this Section, the
Budgeted Fee shall be adjusted according to the following formula: (a) the
original Budgeted Fee shall be divided by the original Budgeted Cost of the
Work, and the quotient of such division is herein referred to as the "ORIGINAL
MULTIPLIER"; (b) the Original Multiplier shall be multiplied by 0.75, and the
product of such multiplication is herein referred to as the "ADJUSTED
MULTIPLIER"; (c) that portion of the increase or decrease in the Budgeted Cost
of the Work that exceeds 20% of the then current Budgeted Cost of the Work shall
be determined: (d) that portion of the increase or decrease in the Budgeted Cost
of the Work that exceeds 20% of the then current Budgeted Cost of the Work shall
be multiplied by the Adjusted Multiplier; and (e) the product of the
multiplication in Clause (d) shall be added to or subtracted from the Budgeted
Fee. For example, as an illustration only, if the original Budgeted Cost of the
Work is $1,000,000, the original Budgeted Fee is $10,000 and the scope of the
work is increased so that the Budgeted Cost of the Work is now $1,300,000, the
Budgeted Fee would be adjusted as follows:
(A) 10,000/1,000,000 = 0.01;
(B) 0.01 x 0.75 = 0.0075;
(C) $1,000,000 x 0.20 = $200,000;
$1,300,000 - $1,200,000 = $100,000;
(D) $100,000 x 0.0075 = $750;
(E) $10,000 + $750 = $10,750.
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Upon the occurrence of an event described in Clause (i) or Clause (iii) of this
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Section, any increase or decrease in the Fee shall be mutually agreed to by the
parties, and such agreement shall be evidenced in writing. If there is any
increase or decrease in the Fee, the Budgeted Fee shall be adjusted accordingly.
ARTICLE 17
TERMS OF PAYMENT
17.1 PAYMENT OF CONTRACT AMOUNT. Based upon Applications for Payment
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997