Common use of Administrative Overhead Clause in Contracts

Administrative Overhead. In addition to the charges made pursuant to Paragraph 1 above, Manager shall charge the Joint Account with an overhead charge calculated as follows: A. One percent (1%) of any expenditure for an item which would, under generally accepted accounting treatment for financial purposes, be capitalized and is not included as a direct charge included in Section II of the Account Procedure; plus B. Seven percent (7%) of all Direct Charges as defined in this Exhibit B, except the Direct Charges identified in Section II, paragraphs 1A, 1B and 1C of this Exhibit B but for any individual contract in excess of $50,000 the fee shall be reduced to 3%. Such overhead rates may be amended from time to time by mutual agreement of the Participants hereto if, in practice, the rates are found to be insufficient or excessive.