CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
EXHIBIT 10.49(a)
DESIGN/BUILD AGREEMENT
BETWEEN
AMD SAXONY MANUFACTURING GmbH
AND
▇▇▇▇▇▇▇▇ + ▇▇▇▇▇ GmbH + CO.
DATED AS OF NOVEMBER 15TH, 1996
PERTAINING TO
DESIGN AND CONSTRUCTION OF AMD FAB 30
DRESDEN, GERMANY
INDEX
Article 1
Scope of Work.................................... 1
1.1 Facility................................................................... 2
1.2 Project.................................................................... 2
1.3 Design And Engineering Services............................................ 2
1.3.1 Engineering Services................................................ 2
1.3.2 Design And Engineering By Contractor................................ 2
1.3.3 Latest Version Of Documents......................................... 4
1.3.4 Process Design...................................................... 4
1.4 Construction And Construction Administration And Supervision Services...... 5
1.4.1 Construction And Construction Management Services By Contractor..... 5
1.4.2 Standards For Completion............................................ 6
1.5 Nature Of Company's Approvals.............................................. 6
1.6 Definitions................................................................ 6
Article 2
Personnel...................................... 8
2.1 Employment By Contractor Of Qualified Personnel............................ 8
2.1.1 Qualified Design Professionals...................................... 8
2.1.2 Qualified Construction Professionals................................ 8
2.2 Contractor's Superintendents............................................... 8
2.2.1 Senior Project Construction Superintendent.......................... 8
2.2.2 Appointment Of Superintendents Required By Law...................... 9
2.3 Construction Personnel..................................................... 9
2.3.1 Supervision Of Construction Personnel............................... 9
2.3.2 Contractor's Responsibility For Personnel........................... 9
2.4 No Relationship With Company............................................... 9
2.5 Company's And Contractor's Representatives................................. 9
2.6 Personnel Proficiency In English........................................... 10
2.7 Employment Of Legal Workers................................................ 10
2.8 Compliance With Law and Promptitude In Hiring And Replacing Personnel...... 10
Article 3
Contract Documents.................................. 10
3.1 Contract Documents......................................................... 10
3.2 Resolution Of Conflicts.................................................... 10
3.3 Language Of Contract Documents............................................. 11
Article 4
Design Documents................................... 11
4.1 Detailed Design............................................................ 11
4.2 Pre-Contract Design........................................................ 11
4.3 Design Development Phase................................................... 11
4.4 Final Design Phase......................................................... 12
4.5 Specifications And Drawings................................................ 12
4.6 Data Sheets................................................................ 12
4.7 Quantities And Recipients Of Design Documents.............................. 12
4.8 As Built Documents......................................................... 12
4.9 Company Not Approving Or Waiving........................................... 13
4.10 Operating Manual........................................................... 13
4.11 Ownership Of Documents..................................................... 13
4.12 Obtaining Permits.......................................................... 13
4.13 Compliance With Code Requirements.......................................... 14
Article 5
Approval of Design Documents............................. 14
5.1 Approval By Company........................................................ 14
5.2 Schedule Of Submittals..................................................... 15
i
5.3 Bulk Orders................................................................ 15
5.4 Return Of Design Documents To Contractor................................... 15
5.5 Nature Of Company's Approval Of Design Documents........................... 15
5.6 Delay By Contractor Or Company In Delivery Of Design Documents............. 16
5.6.1 Delay By Contractor In Delivery..................................... 16
5.6.2 Delay By Company In Delivery........................................ 16
Article 6
Site......................................... 16
6.1 Easements Provided By Company.............................................. 16
6.2 Condition Of Site.......................................................... 16
6.3 Benchmark.................................................................. 17
6.4 Underground Utilities...................................................... 17
Article 7
Acceptance of Site.................................. 17
7.1 Contractor's Inspection Of Site............................................ 17
Article 8
Conduct of the Construction Work.......................... 17
8.1 Construction In Accordance With Approved Design Documents.................. 17
8.2 Parties' Relationship...................................................... 17
8.3 Efficient Administration................................................... 17
8.4 "Build Clean" Protocol..................................................... 18
8.5 Equipment Standby.......................................................... 18
8.6 Construction By Company.................................................... 18
8.7 Compatible Labor........................................................... 18
8.8 Labor Agreement Practices.................................................. 18
8.9 Overtime Labor............................................................. 18
8.10 Identification............................................................. 18
8.11 Commencement And Prosecution Of Construction Work.......................... 19
8.12 Contractor Responsible For Construction Means.............................. 19
8.13 Specialized Construction Manager Required By Law........................... 19
8.14 Sanitation................................................................. 19
8.15 Safety And Security........................................................ 19
8.15.1 Contractor's Responsibility For Safety............................. 19
8.15.2 Safety Program..................................................... 20
8.15.3 Reporting And Investigating Accidents.............................. 20
8.15.4 Reporting Claims................................................... 20
8.15.5 Compliance With State Safety Requirements.......................... 20
8.15.6 Safety Of Tools.................................................... 20
8.15.7 Contractor's Safety Requirements In Facility....................... 20
8.15.8 Security........................................................... 21
8.16 Materials.................................................................. 21
8.16.1 New Materials...................................................... 21
8.16.2 Responsibility For Injury Caused By Equipment...................... 21
8.16.3 Substitution Of Materials.......................................... 21
8.16.4 Materials Objected To By Contractor................................ 22
8.17 Storage Of Materials....................................................... 22
8.18 Cleaning Up................................................................ 22
Article 9
Purchasing Materials, Subcontracting Work and Computers............. 22
9.1 Purchasing Materials....................................................... 22
9.2 Subcontracting Work........................................................ 22
9.2.1 Third Party Subcontracts And Vendors................................ 22
9.2.2 Contractor Bidding On Subcontracted Work............................ 23
9.3 Nature Of Company's Approval............................................... 23
9.4 Contractor Responsible For Subcontractors.................................. 23
9.5 Cost-Plus Subcontracts..................................................... 23
9.6 Computers.................................................................. 24
9.7 Import Requirements........................................................ 24
ii
Article 10
Changes, Additions, and Omissions in the Work.................... 24
10.1 Keeping Account Of Changes................................................. 24
10.2 Proposing And Approving Changes............................................ 24
10.3 Effect Of Change Order On Cost And Timing.................................. 25
10.4 No Effect On Contractor's Other Responsibilities........................... 26
Article 11
Inspection and Testing During Construction..................... 26
11.1 Contractor's Shop Inspections.............................................. 26
11.2 Measurements And Suitability............................................... 26
11.3 Inspection Reports......................................................... 26
11.4 Company's Inspections...................................................... 26
11.5 Company's Inspector........................................................ 27
11.6 Inspection Of Fabrication.................................................. 27
11.7 Testing.................................................................... 28
Article 12
Progress Reports and Progress Monitoring...................... 28
12.1 Progress Schedules......................................................... 28
12.2 Delivery Of Schedules To Company........................................... 28
12.3 Periodic Progress Reports.................................................. 28
12.4 Superintendent's Report.................................................... 28
12.5 Materials Status Reports................................................... 29
Article 13
Accounts and Records................................. 29
13.1 Detailed Accounts.......................................................... 29
13.2 SEMATECH Model............................................................. 29
13.3 Tax Accounting............................................................. 29
13.4 Audit By Company........................................................... 29
13.5 Audit Of Subcontractors And Vendors........................................ 29
Article 14
Time of Completion.................................. 30
14.1 Substantial Completion Date................................................ 30
14.2 Latest Date For Final Completion........................................... 30
14.3 Delays And Extensions Of Time.............................................. 30
14.3.1 Delays Caused By Change Order Or By Company Or By Force Majeure.... 30
14.3.2 Standard For Approving Extensions Of Time.......................... 31
14.4 Delays And Additional Costs................................................ 31
14.4.1 Additional Costs Caused By Company's Delay Or By Force Majeure..... 31
14.4.2 Notice Of Claim For Delay.......................................... 31
14.4.3 Limitation On Costs................................................ 31
14.4.4 Delays By Company In Granting Approvals............................ 31
Article 15
Substantial Completion, Final Completion and Final Acceptance........... 32
15.1 Substantial Completion..................................................... 32
15.2 Final Completion........................................................... 32
15.2.1 Completion Of Punch List Items..................................... 32
15.2.2 Contractor's Certification Of Completion Of Construction Work...... 33
15.3 Final Acceptance And Final Payment......................................... 33
15.3.1 Final Acceptance By Company........................................ 33
15.3.2 Final Payment...................................................... 34
15.4 Release Of Company......................................................... 34
iii
Article 16
Cost of the Work................................... 34
16.1 Basis Of Fee............................................................... 34
16.2 Reimbursable Costs......................................................... 34
16.2.1 Office Costs....................................................... 34
16.2.2 Field Costs........................................................ 37
16.2.3 Excluded Costs..................................................... 41
16.2.4 Principles Affecting Reimbursable Costs............................ 42
16.3 Contractor's Fee........................................................... 43
16.3.1 The Fee............................................................ 43
16.3.2 Calculate Incentive Changes In Fee................................. 43
16.3.3 Fee For Services................................................... 44
16.4 Total Contract Amount...................................................... 44
16.5 Costs Of Alterations....................................................... 44
16.6 Records Of Reimbursable Costs.............................................. 44
16.7 Discounts And Refunds...................................................... 45
16.8 Surplus.................................................................... 45
16.9 Lump Sum Subcontract....................................................... 45
16.10 Adjustment In Fee.......................................................... 46
Article 17
Terms of Payment................................... 46
17.1 Payment Of Contract Amount................................................. 46
17.2 Payment of Increases In Fee; Retainage..................................... 48
17.3 Partial Release Of Retainage............................................... 48
17.4 Payment Not A Waiver By Company............................................ 48
17.5 Payment Of Balance Of Retainage............................................ 48
17.6 Insurance Adjustments...................................................... 49
17.7 Stored Materials........................................................... 49
Article 18
Warranties And Guarantees.............................. 49
18.1 Contractor's Warranty And Guarantee........................................ 49
18.2 Company's Right To Repair.................................................. 50
18.3 Liability For Damages...................................................... 51
18.4 Capacities At Operating Conditions......................................... 51
18.6 Retaining Imperfect Materials.............................................. 51
18.7 No Release Of Other Claims 51
Article 19
Correction of Defective Construction Work....................... 51
19.1 Correction Of Work For Which Contractor Is Responsible..................... 51
19.2 Using New Materials For Repairs............................................ 52
19.3 Repair By Company.......................................................... 52
Article 20
Indemnity...................................... 52
20.1 Contractor's Indemnity..................................................... 52
20.2 Indemnification By Subcontractors And Vendors.............................. 53
20.3 Company's Indemnity........................................................ 53
20.4 Consequential Damages...................................................... 54
Article 21
Insurance And Bank Guarantees............................ 54
21.1 Contractor To Carry Insurance.............................................. 54
21.2 Contractor's Liability Insurance........................................... 55
21.2.1 Liability Coverage................................................. 55
21.2.2 Liability Limits................................................... 55
21.3 Insurance Certificates..................................................... 56
21.4 Company As Additional Insured.............................................. 56
21.5 Builders All Risk Insurance................................................ 56
21.6 Performance And Warranty Bank Guarantees................................... 56
21.7 Advance Payment Bank Guarantees............................................ 57
21.8 Assignment Of Subcontractors' Warranties And Bank Guarantees............... 57
iv
Article 22
Casualty Causing Damage to the Facility....................... 58
22.1 Damage Before Substantial Completion Of Facility........................... 58
22.2 Damage After Substantial Completion Of Facility............................ 58
Article 23
Protection of Property............................... 58
23.1 Contractor's Protection Of Facility........................................ 58
Article 24
Preparation of the Facility for Occupancy and Testing.................. 58
24.1 Contractor's Preparation Of Facility....................................... 58
24.2 Calibration Of Instrumentation............................................. 59
24.3 Take Over For Installation Or Testing...................................... 59
Article 25
System Performance Tests............................... 60
25.1 Conduct Of System Performance Tests; Repairs............................... 60
25.2 Notice Of Satisfactory Completion.......................................... 60
25.3 Coordination Of Systems.................................................... 60
25.4 Standards Of Operation..................................................... 60
25.5 Shut Down Procedure........................................................ 61
Article 26
Use of Completed Portions of the Facility....................... 61
26.1 Use Of Completed Construction Phases....................................... 61
Article 27
Closing Report on Cost of the Facility........................ 61
27.1 Closing Report............................................................. 61
Article 28
Record Documents.................................. 61
28.1 Description Of Record Documents............................................ 61
28.2 Information On Record Documents............................................ 62
28.3 Recording Data............................................................. 62
28.4 Conduits, Pipes, Etc....................................................... 62
28.5 Finalization Of Documents Other Than Drawings.............................. 62
28.6 Finalization Of Drawings................................................... 62
28.7 Remedies Regarding Record Documents........................................ 62
Article 29
Operation and Maintenance Data.......................... 63
29.1 Submittal Of Operation And Maintenance Data................................ 63
29.2 Contents Of Data........................................................... 63
29.3 Data For Equipment And Systems............................................. 63
Article 30
Taxes........................................ 64
30.1 Taxes Assessed Against Facility............................................ 64
30.2 Taxes Affecting Employees.................................................. 64
30.3 Taxes Not Part of Budgeted Cost............................................ 64
Article 31
Liens [Pfandrecht]................................. 64
31.1 Liens [Pfandrecht]......................................................... 64
Article 32
Patents and Confidentiality.............................. 65
32.1 Contractor's Responsibility................................................ 65
32.2 Design Process............................................................. 65
32.3 Replacement Of Infringing Item............................................. 65
32.4 Confidentiality............................................................ 65
v
32.4.1 Proprietary Information............................................. 66
32.4.2 Hold In Confidence.................................................. 66
32.4.3 Announcements....................................................... 66
Article 33
Company's Right to Take Over the Work......................... 67
33.1 Company's Option........................................................... 67
33.2 Reimbursement Of Contractor................................................ 67
33.3 Guarantees................................................................. 67
Article 34
Company's Right to Suspend Work.......................... 67
34.1 Company's Right To Suspend Project......................................... 67
34.2 Suspension Upon Company's Notice........................................... 67
34.3 Compensation For Suspension................................................ 68
34.4 Resumption Of Work......................................................... 68
34.5 Termination Following Suspension........................................... 68
Article 35
Termination for Convenience of Company...................... 69
35.1 Termination By Company..................................................... 69
35.2 Actions Upon Receipt Of Notice............................................. 70
35.3 Guarantees Following Termination........................................... 70
Article 36
Default by the Contractor............................... 70
36.1 Events Of Default.......................................................... 70
36.2 Company's Right To Take Over Work.......................................... 71
36.3 Company's Right To Complete Work........................................... 71
36.4 Contractor's Action Upon Receipt of Notice................................. 71
36.5 Remedies Cumulative........................................................ 72
36.6 Limits On Amount Payable To Contractor..................................... 72
Article 37
Penalty Clause................................... 72
37.1 Damages For Delay In Substantial Completion Of Facility.................... 72
37.2 Payment Of Contract Penalty................................................ 72
37.3 Subcontract Penalty Clauses................................................ 72
37.4 Set-Off Of Contract Penalties.............................................. 72
Article 38
Compliance with Laws, Choice of Law, Choice of Forum, Contract Language.... 73
38.1 Compliance With Applicable Law............................................. 73
38.2 Indemnity For Violation.................................................... 73
38.3 Choice of Law.............................................................. 73
38.4 Disputes; Arbitration...................................................... 74
38.4.1 Resolution Of Disputes By Arbitration.............................. 74
38.4.2 Place Of Arbitration............................................... 74
38.4.3 Exclusive Jurisdiction............................................. 74
38.4.4 Selection Of Arbitrators........................................... 74
38.4.5 Language Of Proceedings............................................ 75
38.4.6 Applicable Law..................................................... 75
38.4.7 Arbitration Award.................................................. 75
38.4.8 Provisional Remedies............................................... 75
38.5 Contract Made In English................................................... 75
Article 39
Financing of Project................................ 75
39.1 Take Over By Project Lender................................................ 75
39.2 Approvals By Project Lender................................................ 75
39.3 Audit By Project Lender.................................................... 75
39.4 Amendment of Agreement..................................................... 76
vi
Article 40
Force Majeure.................................... 76
40.2 Effect On Time For Performing Obligation................................... 76
40.3 Effect On Compensation..................................................... 77
40.4 Obligation To Mitigate..................................................... 77
40.5 Notification............................................................... 77
40.6 Failure to Notify.......................................................... 77
Article 41
Waiver, Severability and Remedies........................... 77
41.1 Company's Rights Not Affected.............................................. 77
41.2 Contractor's Waiver........................................................ 77
41.3 No Waiver Of Breach........................................................ 77
41.4 Written Changes............................................................ 77
41.5 Severability............................................................... 77
41.6 Cumulative Remedies........................................................ 78
41.7 Captions................................................................... 78
Article 42
Notices and Addresses................................. 78
42.1 Notices.................................................................... 78
42.2 Change Of Address.......................................................... 79
Article 43
Entire Agreement; Successors............................ 79
43.1 Entire Agreement........................................................... 79
43.2 Successors And Assigns..................................................... 79
vii
EXHIBITS AND SCHEDULES
Exhibit A Facility Performance Criteria
Schedule 7.1 Site Studies Furnished By Company To Contractor
Schedule 16.2.1.1 Range Of Hourly Rates Of Contractor's Employees And
Contractor's Established Travel And Living Expenses
Reimbursement Policies
Schedule 16.2.2.3 Schedule Of Equipment Rental Rates [To Be Attached Upon The
Parties' Mutual Agreement On Such Rates And To Be Revised
From Time To Time]
Schedule 16.2.4 Examples Of Qualifying And Non-Qualifying Reimbursable Costs
Schedule 21.6&21.7 Criteria For Bank Guarantees
viii
INDEX OF DEFINED TERMS
----------------------
Defined Term Section
------------ -------
"Adjusted Multiplier"...................................................................... 16.10
"Advisors"................................................................................. 32.4.1
"Affiliate"................................................................................ 32.4.1
"Budgeted Cost of the Work"................................................................ 16.3.1
"Budgeted Fee"............................................................................. 16.3.1
"Change Order"............................................................................. 10.1
"Company".................................................................................. Preamble
"Company's Inspector"...................................................................... 11.5
"Company's Project Manager"................................................................ 2.5
"construction outfit"...................................................................... 1.6.1
"Construction Phase"....................................................................... 1.3.2.2
"Construction Work"........................................................................ 1.4.1
"Contract"................................................................................. Recitals
"Contract Amount".......................................................................... 16.1
"Contract Documents"....................................................................... 3.1
"Contractor"............................................................................... Preamble
"Cost of the Work"......................................................................... 1.3.2.2
"Default".................................................................................. 36.1
"Delay Week"............................................................................... 37.2, 37.3
"Design Documents"......................................................................... 1.3.2.1
"Estimate of Project Cost"................................................................. 1.3.2.2
"Event of Default"......................................................................... 36.1
"Fab 30 Preliminary Design"................................................................ 1.1
"Facility"................................................................................. 1.1
"Fee"...................................................................................... 16.3
"Final Acceptance"......................................................................... 15.3.1
"Final Completion Date".................................................................... 15.2
"Latest Date For Substantial Completion Of The Facility"................................... 14.1
"materials"................................................................................ 1.6.2
"Operation and Maintenance Data"........................................................... 29.1
"Original Multiplier"...................................................................... 16.10
"outfit"................................................................................... 1.6.1
"person"................................................................................... 1.6.3
"Project".................................................................................. 1.2
"Project Budget"........................................................................... 1.3.2.4
"Project Schedule"......................................................................... 1.3.2.3
"Proprietary Information".................................................................. 32.4.1
"Punch List"............................................................................... 15.1
"reasonable period of time"................................................................ 1.6.4
"Reimbursable Costs"....................................................................... 16.1
"Representative"........................................................................... 1.6.5
"Retainage"................................................................................ 17.2
"ROM"...................................................................................... 14.4.2
"Schedule Recovery Plan"................................................................... 1.4.1.1
"service the Facility"..................................................................... 1.6.6
"servicing the Facility"................................................................... 1.6.6
"Site"..................................................................................... Recitals
"Site Boundary Lines"...................................................................... 1.6.7
"Stored Materials"......................................................................... 17.1
"Subcontract Retainage".................................................................... 17.1
"subcontractor"............................................................................ 1.6.8
"supplies"................................................................................. 1.6.9
"system"................................................................................... 1.6.10
"System Performance Test".................................................................. 25.1
"vendor"................................................................................... 1.6.10
"Wafer Process Equipment".................................................................. 1.3.2
"Warranty Commencement Date:............................................................... 18.1
"work"..................................................................................... 1.6.11, 1.6.12
"working days"............................................................................. 1.6.13
ix
DESIGN/BUILD AGREEMENT
BETWEEN
AMD SAXONY MANUFACTURING GmbH
AND
▇▇▇▇▇▇▇▇ + ▇▇▇▇▇ GmbH + CO.
PERTAINING TO
DESIGN AND CONSTRUCTION OF AMD FAB 30, DRESDEN, GERMANY
Preamble
THIS DESIGN/BUILD AGREEMENT is made and entered into as of the 15th day of
November, 1996 by and between AMD SAXONY MANUFACTURING GmbH, having its home
office at AMD European Microelectronics Center, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, hereinafter referred to as "COMPANY", and ▇▇▇▇▇▇▇▇ + ▇▇▇▇▇
GmbH + CO., having its home office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, hereinafter referred to as "CONTRACTOR".
R E C I T A L S
---------------
A. COMPANY owns certain land located in the City of Dresden, State
of Saxony, Germany (the "SITE").
B. COMPANY desires to obtain new state-of-the-art wafer fabrication
and associated support facilities to be located on the Site for the design and
production of integrated circuits.
C. CONTRACTOR desires to plan, design, construct, erect, install,
equip, start up, test, calibrate, adjust and turn over the facilities in
accordance with this Agreement and the Contract Documents (defined in Section
-------
3.1 below) (this Agreement and the Contract Documents are collectively called
---------
the "CONTRACT").
NOW, THEREFORE, for and in consideration of the payments hereinafter
specified to be made by COMPANY, and in consideration of the promises and mutual
covenants and agreements of the parties herein contained, the parties hereto do
hereby agree as follows:
ARTICLE 1
SCOPE OF WORK
1.1 FACILITY. The improvements and equipment to be planned, designed,
--------
engineered, developed, fabricated, constructed, furnished and/or installed,
started up, tested, calibrated, adjusted and turned over under the Contract
(which improvements and equipment are herein sometimes referred to collectively
as the "FACILITY") are as follows:
The Facility known as AMD European Microelectronics Center, located in
Dresden, Germany.
The Facility shall include the buildings, structures, building systems, site
improvements, roads, utilities, wastewater disposal, sewer and other
1
improvements but shall exclude the acquisition and installation of the Wafer
Process Equipment (defined in Section 1.3.2 below). The Preliminary Design of
-------------
the Facility is represented or described in documents described in List of
Mechanical Drawings dated November 14, 1996 and List of Architect's Drawings
dated November 14, 1996 and in Preliminary Design Report dated November 14,
1996, which are incorporated herein by this reference (collectively referred to
as the "FAB 30 PRELIMINARY DESIGN"). In the event that any changes are made in
the scope of the Facility, any corresponding changes in the Fab 30 Preliminary
Design shall be made by Change Order (defined in Section 10.1 below).
------------
CONTRACTOR shall provide the design development, engineering, construction
management and all ancillary construction services, and appurtenances of every
description which are necessary to construct and start the Facility in
accordance with the Fab 30 Preliminary Design and the Contract.
1.2 PROJECT. The Project for which CONTRACTOR shall be responsible is the
-------
design development, engineering, construction management, furnishing,
fabrication, construction, erection, installation, equipping, starting up,
testing, calibrating, and adjusting of the Facility, including without
limitation all design services, all construction management services and all
construction services, together with all necessary appurtenances (collectively,
the "PROJECT"). The Project comprises the completed construction of the
Facility as designed by CONTRACTOR and approved by COMPANY and includes without
limitation (i) all labor, tools, construction equipment, fuel, transportation,
utilities, water and all other facilities and services necessary to ready the
Site for construction and to complete all site work (including without
limitation installation of all utilities, wastewater disposal and sewage
disposal systems) and to complete such construction and (ii) all materials
incorporated and to be incorporated in such construction and (iii) all building
systems and building equipment to be installed as an integral part of the
buildings, structures and other improvements comprising the Facility as
described in the Fab 30 Preliminary Design.
1.3 DESIGN AND ENGINEERING SERVICES.
-------------------------------
1.3.1 ENGINEERING SERVICES. CONTRACTOR shall furnish structural,
--------------------
mechanical, electrical, plumbing, civil engineering and landscaping services as
part of CONTRACTOR'S design services.
1.3.2 DESIGN AND ENGINEERING BY CONTRACTOR. Except for the process
------------------------------------
design referred to in Section 1.3.4, based upon the Fab 30 Preliminary Design,
-------------
CONTRACTOR shall furnish the completed design for the Facility. CONTRACTOR
shall make detailed checks of the design information furnished by COMPANY to
satisfy itself as to the accuracy thereof and shall be responsible for the
complete mechanical and electrical design of the Facility and of all systems
necessary for a complete and operational Facility with the exception of
furnishing tooling, equipment and machinery to be furnished and installed by
COMPANY for the manufacture and design of integrated circuits (the "WAFER
PROCESS EQUIPMENT"). CONTRACTOR shall be responsible for:
1.3.2.1 DESIGN DOCUMENTS. Developing and preparing for
----------------
COMPANY'S approval complete and coordinated plans, specifications, working
drawings, data sheets and other construction documents for the Project
which are necessary for the construction of the Facility (the "DESIGN
DOCUMENTS"). Each time the Design Documents are revised, the revised Design
Documents shall: (1) bear a sequential number (indicating the numerical
sequence of such revision), (2) show the changes from the prior revision,
(3) show the date of the revision, (4) show the date of COMPANY'S and
CONTRACTOR'S mutual approvals and (5) show the name(s) of COMPANY'S and
CONTRACTOR'S Representative(s) who approved the revision. The development
of the design of the Facility and the preparation of the Design Documents
are described in more detail in Article 4 below.
---------
2
1.3.2.2 ESTIMATES OF PROJECT COST. Developing and preparing
-------------------------
for COMPANY'S review and approval at each stage of design development of design
estimates that define the estimated cost of the Project setting forth the total
estimated design / engineering and complete construction cost of each of the
following components of the Project and including as to each component the
common system costs:
Design/Engineering, Site Development, Office Design Center, Central
Utilities Building, Fab and Clean Room, Fab Support, Chemical and Bulk
Storage, and Construction Administration and Supervision (each
referred to as a "CONSTRUCTION PHASE").
These estimates (each an "ESTIMATE OF PROJECT COST") will be exclusive of
acquisition and installation cost for the Wafer Process Equipment but shall
include building support equipment acquisition and installation as necessary or
appropriate to implement the Fab 30 Preliminary Design and the Contract. Each
estimate shall be provided to COMPANY in the level of detail mutually agreed
upon by and between CONTRACTOR and COMPANY and shall be reconciled with
previously prepared design estimates. The estimates shall set forth the
estimated total of all Reimbursable Costs (the "COST OF THE WORK ") (as
described in Article 16 below), and the CONTRACTOR'S estimated Budgeted Fee (as
----------
defined in Article 16 below).
----------
1.3.2.3 PROJECT SCHEDULE. Developing for COMPANY'S approval a
----------------
detailed Critical Path Method Schedule for the performance of the engineering
and design work and the construction of each Construction Phase (the "PROJECT
SCHEDULE"), which Project Schedule is incorporated herein by this reference.
With respect to the Project Schedule, COMPANY'S approval will be required for
every change in the Project Schedule which may affect the Critical Path of any
Construction Phase or may affect any milestone established for any part of the
Project. Additionally, COMPANY shall have the right to change the Critical
Path of any Construction Phase, and CONTRACTOR shall thereupon revise the
Project Schedule for COMPANY'S approval, and CONTRACTOR shall submit all
additional costs resulting from such change to COMPANY and shall obtain
COMPANY'S approval (including approval of changes in the Project Budget) before
such change in such critical path is implemented. However, COMPANY'S approval
shall not be construed to relieve CONTRACTOR of any responsibility and/or
liability which CONTRACTOR may have with respect to delays and/or additional
costs not encompassed by COMPANY'S approval. The Project Schedule shall be
prepared, updated and revised in Prima ▇▇▇▇ Project Planner for Windows (P3 Win)
or equivalent acceptable to both CONTRACTOR and COMPANY. The Project Schedule
shall be developed so as to permit CONTRACTOR and COMPANY to monitor the
progress and monetary cost of all aspects of the work including without
limitation each Construction Phase, to identify the points in time at which
specified events must occur and to anticipate potential problems in achieving
scheduled completion dates. The Project Schedule shall show the respective
dates upon which CONTRACTOR proposes to commence and complete the following sub-
phases of each Construction Phase: Phase Summary, Phase Milestones, Delays
Encountered, Conceptual Design, Schematic Design, Construction Design
Development, Preparation of Tenders, Tendering-Negotiation & Award, Notice to
Proceed, Submittals and Shop Drawings and Review and Approval thereof by
COMPANY, Fabrication and Delivery, Site Mobilization, Construction, Punchlist,
Calibration, Adjustment, Turnover to COMPANY, and Site Demobilization. Each
Construction Phase will be further detailed to reflect the elements of the
Project Schedule and the logical activities or line items planned to accomplish
each Construction Phase in accordance with the Project Schedule. Each schedule
activity or line item will be identified, along with the estimated quantity of
units of work and the cost thereof, to be
3
accomplished or installed, man hours planned per unit, together with the
cost thereof, any special construction equipment or other constraining
appurtenances required for construction (e.g., heavy-lift cranes, site
concrete batching plants, wide-load road permits, etc.), and scheduled
progress anticipated on each of said items in order to complete the entire
Facility within the contract time in accordance with the Project Schedule.
Each schedule activity or line item will be identified as a direct work or
indirect work activity and have the planned equipment, material, labor, and
equipment rental cost associated with the activity identified separately.
1.3.2.4 PROJECT BUDGET. Developing and preparing for COMPANY'S
--------------
approval a detailed budget for the Project based on the latest Estimate of
Project Cost approved by COMPANY that reflects the elements of the Project
Schedule and sets forth separately the projected costs for each
Construction Phase and breaks down those projected costs into each element
of the Project Schedule applicable to such Construction Phase (the "PROJECT
BUDGET"), which Project Budget is incorporated herein by this reference.
The Project Budget will be coded and identify quantifiable elements to
relate directly to the Project Schedule and Project work breakdown
structure for cash flow and progress monitoring. The Project Budget will be
capable of being summarized by phase and in total to the SEMATECH Facility
Cost Model. After the Project Budget is finalized, it will not be changed
except pursuant to a Change Order approved and signed by the two
Representatives of COMPANY described in Clause (x) of Section 10.2 and by
---------- ------- ----
the COMPANY Representative described in Clause (y) of Section 10.2 hereof,
---------- ------------
as well as approved and signed by CONTRACTOR'S Representative described in
Clause (z) of Section 10.2. The Project Budget will be maintained
--------- ------------
continuously, and the status of the Project Budget and a forecast shall be
reported to COMPANY on a monthly basis, in such format as COMPANY and
CONTRACTOR mutually agree upon, and the Project Budget will monitor the
following categories of data: planned budget, approved changes, operating
budget, commitments against operating budget, cost incurred to date, cost
to complete commitment, current Estimate of Project Cost, variance of
operating budget to Budgeted Cost of the Work (defined in Section 16.3.1
--------------
below), earned value of work completed to date, quantity of units budgeted,
estimated cost per unit, actual cost per unit and such other information as
COMPANY may request or CONTRACTOR recommend and COMPANY accept.
Additionally, COMPANY may request simplified interim status reports and
forecasts on a weekly or bi-weekly basis in such other format or formats as
COMPANY may prescribe, and any associated, additional cost shall be
reimbursed by COMPANY either as office costs pursuant to Section 16.2.1 if
--------------
prepared in CONTRACTOR'S home office or as field costs pursuant to Section
-------
16.2.2 if prepared in CONTRACTOR'S field office.
------
1.3.3 LATEST VERSION OF DOCUMENTS. For purposes of this Agreement,
---------------------------
the defined terms "DESIGN DOCUMENTS", "ESTIMATE OF PROJECT COST", "PROJECT
SCHEDULE" and "PROJECT BUDGET" shall mean the latest version of each of these
developed and approved by COMPANY in accordance with this Agreement.
1.3.4 PROCESS DESIGN. COMPANY shall supply certain process design
--------------
requirements for the tools used in the manufacturing process in the form of
performance requirements and certain other design information as shown
in the Contract Documents, including the Facility Performance Criteria described
in Exhibit A attached hereto and made a part hereof. Any additional sizing and
---------
selection of materials not specified by COMPANY is to be furnished by CONTRACTOR
with COMPANY'S approval in the form of prescribed specifications. Except for
the process design requirements, CONTRACTOR shall make detailed checks of the
design information furnished by COMPANY to satisfy itself as to the accuracy
thereof and shall be responsible for the complete design of the Facility and all
building systems, with the exception of the
4
Wafer Process Equipment, the procurement and installation of which shall be
determined by COMPANY.
1.4 CONSTRUCTION AND CONSTRUCTION ADMINISTRATION AND SUPERVISION SERVICES.
---------------------------------------------------------------------
1.4.1 CONSTRUCTION AND CONSTRUCTION MANAGEMENT SERVICES BY
----------------------------------------------------
CONTRACTOR. The acquisition and installation of the Wafer Process Equipment is
----------
COMPANY'S responsibility. Except for the Wafer Process Equipment and other
things that the provisions of the Contract expressly require or provide for
COMPANY to furnish for the Facility, CONTRACTOR shall furnish and provide all
construction management services and all construction for the entire Facility,
including without limitation all require) at least monthly providing such
updated reports, invoices and materials to be incorporated into the buildings,
structures and other improvements and all labor, fuel, transportation,
construction equipment, tools, utilities, water, wastewater disposal, sewage
disposal, supplies, outfit, and appurtenances of every sort which may be
necessary for or in connection with the scheduling, delivery, handling,
construction, erection, installation, performance, calibration, adjustment and
turnover of the Facility, and for the start up and performance testing of the
Facility and for the execution of all other construction work included as a
part of the Project. All such construction management services and all
construction work are collectively referred to as the "CONSTRUCTION WORK".
CONTRACTOR shall be responsible for all Construction Work, including without
limitation the following:
1.4.1.1 UPDATING BUDGET AND SCHEDULE. During construction,
----------------------------
revising and updating continuously, and reporting to COMPANY on a monthly
basis the Project Budget and the Project Schedule, as described in Section
-------
1.3.2.4 and Article 12, subject to COMPANY'S approval and effected by
------- ----------
issuance of a Change Order; submitting CONTRACTOR'S monthly Application
for Payment (described in Section 17.1 below) and invoices and other
------------
supporting documentation, as required herein at least monthly; and
providing COMPANY with a summary of the status of the Project and a report
on the percentage of completion of the Project (both in such form and
containing such information, including then current aerial photographs, as
COMPANY may reasonably require) at least monthly. Providing such updated
reports, invoices and documents on a timely basis shall be a condition
precedent to payment of CONTRACTOR'S Budgeted Fee. Should the Project fall
behind schedule or be projected to fall behind schedule, CONTRACTOR shall
prepare and submit for COMPANY'S approval, a plan or plans for recovering
the lost time showing such actions as may be required to restore the
Project Schedule to the complete satisfaction of COMPANY and showing the
costs associated with such actions (a "SCHEDULE RECOVERY PLAN"). A Schedule
Recovery Plan may include, without limitation, one or more of the following
courses of action:
-- Increase the size of the work force; or
-- Place activities on shift work; or
-- Provide and utilize additional equipment; or
-- Place activities on overtime for a specified period of time but only
if approved by COMPANY.
The party who shall bear any additional costs to the Project occurring as a
result of such delay(s) or the effort(s) necessary to recover therefrom
shall be determined in accordance with Sections 10.3, 14.4 and 16.2.4. The
------------- ---- ------
Budgeted Cost of the Work shall be increased only by means of Change Order
approved by COMPANY in writing pursuant to Article 10 or Article 14.
---------- ----------
5
1.4.1.2 SUPPORT EQUIPMENT PROCUREMENT. Developing a support
-----------------------------
equipment procurement schedule and plan so as to obtain the support
equipment required for the Project in accordance with the Project Schedule
and the Project Budget.
1.4.1.3 SELECTING SUBCONTRACTORS AND VENDORS. Selecting
------------------------------------
subcontractors and vendors in accordance with this Agreement and
supervising and enforcing the requirements of the Contract on the
performance of subcontracts and purchase orders (exclusive of litigation,
unless first approved in writing by COMPANY or unless the cost of such
litigation is paid for entirely by CONTRACTOR). Ensuring that as a
condition of all subcontracts and purchase orders that subcontractors and
vendors are required to comply with all scheduling procedures, accounting
and auditing procedures, billing procedures, performance reporting
procedures, safety procedures, dispute resolution procedures and procedures
established in the Project Procedures Manual established for the Contract
between CONTRACTOR and COMPANY. CONTRACTOR will coordinate construction
schedules and shop and working drawing development, and insure that same
are communicated to all of CONTRACTOR'S subcontractors.
1.4.2 STANDARDS FOR COMPLETION. It is the intent of the Contract that the
------------------------
Facility shall be complete with all needful appurtenances for satisfactory
operation as identified in the Design Documents, including, without limitation,
comfort-controlled interior environment, proper coordination and control,
safety, reasonably easy access and maintenance, fire defense, life safety, and
the like. Any work or materials not specifically described in or expressly
covered by the Contract but which may be fairly implied as being required
thereby or necessary to make the Facility complete as aforesaid shall be
considered within the purview of the Contract and all such work shall be
performed and all such materials shall be furnished by CONTRACTOR the same as if
specifically described in or expressly covered by the Contract. Such work and
such materials shall be of a quality comparable to the remainder of the Facility
and subject to COMPANY'S approval.
1.5 NATURE OF COMPANY'S APPROVALS. Notwithstanding any review, revision,
-----------------------------
testing, comment or approval by COMPANY of any Design Document, Construction
Work, materials or other aspect of the Project, CONTRACTOR is and shall remain
solely responsible for the plan, design, construction, erection, installation,
equipping, start up, testing, calibration, adjustment and turning over of the
completed Facility to COMPANY in accordance with the terms of the Contract. The
provisions of Sections 4.9, 5.5 and 9.3 shall apply to all such review,
------------ --- ---
revision, testing, comment or approval by COMPANY.
1.6 DEFINITIONS.
-----------
1.6.1 The terms "CONSTRUCTION OUTFIT" and "OUTFIT" where used herein
shall be understood to refer to the equipment, tools, and implements (whether
already owned by CONTRACTOR or rented or purchased by CONTRACTOR expressly for
this job) needed for or in connection with the performance of CONTRACTOR'S work
on the Site, but which do not enter permanently into the construction of the
Facility and will not be needed by COMPANY for or in connection with the
servicing, operation, or protection of the completed Facility.
1.6.2 The word "MATERIALS" where used herein shall mean those goods
or commodities (including equipment) which are intended to enter directly and
permanently into the construction of the Facility, or are required for or in
connection with the servicing, operation, or protection of the completed
Facility as, for example: cement, stone, sand, lumber, millwork, hardware,
brick, concrete, mortar, pipe, tubing, valves, fittings,
6
castings, structural steel, steel plate, exchangers, condensers, coolers,
insulation, paint, welding rod, instruments, instrument charts, pumps, motors,
compressors, generators, furnaces, air conditioning, ventilating, fans,
transformers, conduit, wiring, switch gear, panel boards, hoists, tube cleaners,
wrenches, fire extinguisher, and the like.
1.6.3 The term "PERSON" where used herein shall mean an individual,
corporation, association, partnership, joint venture, limited liability company,
trust or other business entity or government or governmental agency, court,
department or officer.
1.6.4 The term "REASONABLE PERIOD OF TIME" when used herein in
connection with any testing by, or any consent or approval of COMPANY shall mean
a period of time equal to ten (10) working days or, if the circumstances then
prevailing require a longer period of time, COMPANY will justify to CONTRACTOR
such longer period of time in which COMPANY may commence its testing or grant or
deny its consent or approval.
1.6.5 The term "REPRESENTATIVE" when used herein shall mean a person
designated by one of the parties hereto as its representative and authorized to
represent or act on behalf of, and to make decisions that are binding on, the
party such person is representing for the purposes for which such person has
been appointed and when used herein as applying to COMPANY, for purposes of
inspection and approval of Construction Work, shall include any person
representing or acting on behalf of any lender of COMPANY. A person designated
as a representative for a limited purpose, e.g., to conduct audits, shall not be
---
a representative for any other purpose. COMPANY'S Representatives shall include
any independent Person retained by COMPANY to implement financial and cost
controls or to examine and advise COMPANY regarding financial or cost matters.
1.6.6 Expressions such as "SERVICE THE FACILITY" and "SERVICING THE
FACILITY" where used herein shall be understood as requiring or referring to the
performance of such work as is normally needed to recondition the equipment for
resuming operation after a shutdown thereof as, for example, routine purging,
unplugging, cleaning or plating up of equipment; installing fresh operating
supplies; making such routine pressure tests as are needed before resuming
operation; and the like.
1.6.7 The term "SITE BOUNDARY LINES" where used herein shall be
understood to refer to the boundaries of the Site designated as such in the
Contract Documents.
1.6.8 The term "SUBCONTRACTOR" where used herein shall mean a
corporation, association, partnership, joint venture, limited liability company,
trust or other business entity or individual (other than an employee) who
contracts with CONTRACTOR (or with any subcontractor) to (i) perform part of
CONTRACTOR'S work, whether at the Site or elsewhere, or (ii) furnish materials
for the Facility and also erect or install same at the Site.
1.6.9 The term "SUPPLIES" where used herein shall mean those goods or
commodities which enter into the construction of the temporary structures or
temporary lines that are needed at the Site in connection with work on the
Facility, and goods or commodities of a rapidly consumable nature that are used
by the mechanical or building trades at the Site for work on the Facility.
1.6.10 The term "SYSTEM" where used herein shall include, without
limitation (i) a functionally related group of elements, such as a group of
interacting mechanical or electrical components such as the ultra pure water
system or the HVAC system for the Fab and Clean Room, or (ii) a structurally
related group of elements, such as a building.
7
1.6.11 The term "VENDOR" where used herein shall mean a corporation,
association, partnership, joint venture, limited liability company, trust or
other business entity or individual (other than an employee) who furnishes, or
is qualified to furnish, materials or construction supplies for the Facility but
does not erect or install said materials at the job site. However, vendors may
in some cases furnish erection engineers to supervise such erection or
installation.
1.6.12 The term "WORK" where used herein shall mean all design
development work, engineering work and Construction Work necessary or desirable
to perform the Contract and complete the Facility.
1.6.13 The term "WORKING DAYS" where used herein shall mean Monday
through and including Friday of each week but excluding all such days that are
recognized as holidays by the State of Saxony.
ARTICLE 2
PERSONNEL
2.1 EMPLOYMENT BY CONTRACTOR OF QUALIFIED PERSONNEL. CONTRACTOR shall
-----------------------------------------------
assign its senior personnel and professional and technical staff to the Project
to the extent necessary to assure that CONTRACTOR'S obligations under the
Contract are carried out. These personnel shall be identified in the Project
Procedures Manual. CONTRACTOR shall not remove or replace such individuals
without COMPANY'S prior written consent unless COMPANY requests such removal or
replacement. Company shall not unreasonably withhold its consent to such
removal or replacement.
2.1.1 QUALIFIED DESIGN PROFESSIONALS. Design services shall be
------------------------------
performed by qualified architects, engineers and other professionals licensed
(if required by the laws of Saxony or of Germany) to provide such services in
the State of Saxony, Germany.
2.1.2 QUALIFIED CONSTRUCTION PROFESSIONALS. Construction services
------------------------------------
shall be performed by qualified subcontractors and vendors licensed (if required
by the laws of Saxony or of Germany) to provide such services and materials in
the State of Saxony, Germany.
2.2 CONTRACTOR'S SUPERINTENDENTS
----------------------------
2.2.1 SENIOR PROJECT CONSTRUCTION SUPERINTENDENT. CONTRACTOR shall
------------------------------------------
appoint the individual identified in the Project Procedures Manual as the senior
Project construction superintendent to act as the full-time senior Project
construction superintendent on the Project, fully authorized to give such orders
as may be necessary for the proper execution and continuance of the Construction
Work. CONTRACTOR'S senior Project construction superintendent shall have the
authority to make decisions that are binding on Contractor, and all decisions
made by CONTRACTOR'S senior Project construction superintendent shall be binding
on CONTRACTOR. Written notice from COMPANY to said senior Project construction
superintendent of the existence of any imperfections in workmanship or
materials, or of the use by CONTRACTOR of any unsafe methods in any or all of
its various activities in connection with the Construction Work at the Site, or
of any other matter relating to the performance of the Construction Work, shall
be considered to be notice to CONTRACTOR. The individual acting as CONTRACTOR'S
senior Project construction superintendent shall not be changed during the
course of the Construction Work, except with the written consent or at the
request of COMPANY. COMPANY shall not unreasonably withhold its consent to such
change. If such individual proves to be unsatisfactory to CONTRACTOR or ceases
to be employed by CONTRACTOR, COMPANY agrees to act reasonably in consenting to
his replacement. Any individual acting as senior Project construction
superintendent shall be experienced and competent. The senior Project
construction
8
superintendent shall act as a Representative of CONTRACTOR, and shall have
complete authority to represent and to act for CONTRACTOR.
2.2.2 APPOINTMENT OF SUPERINTENDENTS REQUIRED BY LAW. CONTRACTOR
----------------------------------------------
directly or by subcontractor acceptable to COMPANY shall provide a respective
superintendent [Bauleiter] and technical superintendent [Fachbauleiter] as
required by the law applicable to the Site.
2.3 CONSTRUCTION PERSONNEL.
----------------------
2.3.1 SUPERVISION OF CONSTRUCTION PERSONNEL. CONTRACTOR shall give
-------------------------------------
efficient supervision to the work, using its best skill and attention.
CONTRACTOR shall keep on the Construction Work, during its progress, competent
supervisory personnel. COMPANY shall have the right to approve the assignment
of supervisory personnel to the Project, and COMPANY shall not unreasonably
withhold its approval of any such assignment.
2.3.2 CONTRACTOR'S RESPONSIBILITY FOR PERSONNEL. CONTRACTOR shall be
-----------------------------------------
responsible to COMPANY for CONTRACTOR'S employees and for the subcontractors,
vendors and other persons retained by CONTRACTOR, including their agents,
subcontractors and employees. CONTRACTOR shall replace any officer, employee or
agent of CONTRACTOR, or any officer, employee or agent of any subcontractor or
vendor, assigned to the Project upon COMPANY'S reasonable request. CONTRACTOR
shall remove any individual from the Project when requested to do so by
COMPANY'S Representative. CONTRACTOR shall employ in the Construction Work only
competent persons fit and skilled for the work assigned and shall at all times
enforce strict discipline and good order. Whenever any person shall appear to
be incompetent or to act in a disorderly or improper manner, CONTRACTOR shall
immediately or within the shortest reasonable time remove such person from the
Construction Work.
2.4 NO RELATIONSHIP WITH COMPANY. Nothing contained in the Contract shall
----------------------------
create any obligation or contractual relationship between COMPANY on the one
hand and the architects, engineers, subcontractors, vendors and other persons
retained or employed by CONTRACTOR on the other hand. COMPANY shall not have
any right under this Agreement or the other Contract Documents (defined in
Section 3.1) to direct subcontractors or vendors to take or omit to take any
------------
action. COMPANY 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. If any provision of the Contract requires any
subcontractor, vendor or other third person to take, or refrain from
taking some action, such provision shall be interpreted to mean that CONTRACTOR
shall cause such third person to take, or refrain from taking, such action.
2.5 COMPANY'S AND CONTRACTOR'S REPRESENTATIVES. CONTRACTOR and COMPANY
------------------------------------------
shall each designate in writing one Representative who shall have the full
authority to represent and to act on behalf of, and to make decisions that are
binding on CONTRACTOR or COMPANY, respectively, in all matters arising under the
Contract. COMPANY'S Representative is sometimes referred to herein as
"COMPANY'S PROJECT MANAGER." CONTRACTOR and COMPANY shall each notify the other
of the name of their respective Representative and of any changes in the
individual who holds that position. CONTRACTOR'S and COMPANY'S respective
Representatives shall have the authority to delegate to other individuals all or
part of their full authority (except that COMPANY'S Project Manager may not
------
delegate his authority to approve increases or decreases in the Budgeted Cost of
the Work (defined in Section 16.3.1 hereof)). If Contractor's senior Project
--------------
construction superintendent is not Contractor's
9
Representative, then Contractor's Representative shall delegate to the senior
Project construction superintendent the authority specified in Section 2.2.1. It
-------------
is understood that only one Representative of COMPANY shall have authority to
approve increases or decreases in the Budgeted Cost of the Work.
2.6 PERSONNEL PROFICIENCY IN ENGLISH. The senior Project construction
--------------------------------
superintendent, the superintendent [Bauleiter], the technical superintendent
[Fachbauleiter] and all other senior construction personnel shall be able to
speak and write English with a reasonable degree of fluency considering the
nature and requirements of the Project.
2.7 EMPLOYMENT OF LEGAL WORKERS. CONTRACTOR shall be responsible for
---------------------------
assuring that all of CONTRACTOR'S and its subcontractors' and vendors' employees
have necessary visas and have the legal right to be present at the Site or
anywhere else where the work is being performed and to be employed in the work
and that none of such employees are illegal immigrants.
2.8 COMPLIANCE WITH LAW AND PROMPTITUDE IN HIRING AND REPLACING PERSONNEL.
---------------------------------------------------------------------
The removal, replacement and hiring of personnel by CONTRACTOR shall be done in
accordance with the laws of the State of Saxony or other applicable law.
Replacements for removed personnel shall be hired for the Project within a
period of time that does not affect the Cost of the Work or the Project
Schedule.
ARTICLE 3
CONTRACT DOCUMENTS
3.1 CONTRACT DOCUMENTS. The "CONTRACT DOCUMENTS" consist of this
------------------
Agreement (including the Exhibit and Schedules attached or to be attached hereto
and the documents incorporated herein by reference), the Project Schedule, the
Project Budget, each Estimate of Project Cost, the Project Safety Manual and the
Project Procedures Manual which are currently being prepared, the Design
Documents to be prepared by CONTRACTOR and approved by COMPANY pursuant to
Article 4 hereof, any Addenda to this Agreement entered into between COMPANY and
---------
CONTRACTOR and any Change Orders pursuant to Article 10 hereof. This Agreement
----------
and the other Contract Documents shall constitute the Contract between the
parties. The Project Safety Manual and the Project Procedures Manual and the
Estimate of Project Cost and the Design Documents to be prepared by CONTRACTOR
and approved by COMPANY pursuant to Article 4 hereof and any Change Orders
---------
pursuant to Article 10 hereof, are hereby made a part hereof as effectively as
----------
if actually set forth herein in full. It is understood and agreed that whenever
the term "CONTRACT DOCUMENTS" is used in this Agreement, it shall mean the
Contract Documents as approved by COMPANY except that, in the event the parties
hereto mutually agree to any modifications of the Contract Documents, it shall
mean the Contract Documents as so modified.
3.2 RESOLUTION OF CONFLICTS. If any of the other Contract Documents
-----------------------
(other than any Addenda to this Agreement) are found to conflict with this
Agreement, then this Agreement shall control. Furthermore, should there be a
conflict between any of the other Contract Documents (other than any Addenda to
this Agreement), the Contract Document bearing the later date shall control.
Notwithstanding the foregoing, if a document with a later date adversely affects
another portion of the Facility covered by a document with an earlier date, the
parties shall cooperate to remove the adverse effect. In cases where a conflict
exists between any parts of the Contract Documents after application of the
foregoing provisions, and adoption of one of the conflicting alternatives would
jeopardize CONTRACTOR'S warranties and guarantees hereunder while adoption of
the other would not, the alternative which would not jeopardize CONTRACTOR'S
warranties and guarantees shall control unless the construction involved therein
would be unsafe in which case the parties hereto shall cooperate in revising one
of the aforesaid alternatives to remove the objections of jeopardy to warranties
and guarantees
10
and hazards to safety and such revised alternative shall then control.
3.3 LANGUAGE OF CONTRACT DOCUMENTS. The Contract Documents shall be in
------------------------------
English. CONTRACTOR may utilize a German translation of the Contract Documents,
but, as provided in Section 38.5 below, the English version shall be
------------
controlling.
ARTICLE 4
DESIGN DOCUMENTS
4.1 DETAILED DESIGN. CONTRACTOR shall prepare a detailed design of the
---------------
Facility based on the Fab 30 Preliminary Design and conforming to the
requirements set forth in the Contract. It is agreed that, in regard to matters
which are not covered in the Contract, the design and specifications for the
Facility shall be based on and conform to COMPANY'S Facility Performance
Criteria and the Fab 30 Preliminary Design.
4.2 PRE-CONTRACT DESIGN. CONTRACTOR commenced its design services prior
-------------------
to execution of this Agreement. For all of such work performed prior to the
date of this Agreement, CONTRACTOR shall be paid on the basis of CONTRACTOR'S
cost, determined pursuant to Article 16, plus a fee as set forth in Article 16.
---------- ----------
All design work performed prior to the execution of this Agreement shall be
incorporated into and become a part of the design development work to be
performed by CONTRACTOR under this Agreement. CONTRACTOR'S obligations
contained in the Contract, including without limitation CONTRACTOR'S warranties
and guarantees, shall encompass such pre-Contract design work.
4.3 DESIGN DEVELOPMENT PHASE. CONTRACTOR shall review the Fab 30
------------------------
Preliminary Design to ascertain the requirements of the Facility and shall
review the understanding of such requirements with COMPANY. CONTRACTOR shall
submit to COMPANY a proposal based upon the Fab 30 Preliminary Design that shall
consist of preliminary design drawings, outline specifications and other
documents to preliminarily describe the size and character of the entire
Facility, its architectural, structural, plumbing, mechanical and electrical
systems, and the materials and such other elements of the Facility as may be
appropriate. During the design development phase, CONTRACTOR shall prepare for
COMPANY'S approval: (i) overall site plans and building layouts indicating the
location, placement and interrelationship of proposed structures, parking
facilities, on-site egress and ingress, service areas, utilities, water,
wastewater disposal, sewage disposal and other applicable site improvements to
establish the basic scope of the Facility; (ii) typical floor plans, major
building sections, and elevations in sufficient detail to indicate the layout,
basic architectural character, and design treatment of the Facility; (iii) an
itemized gross area tabulation for all structures, site development, and other
improvements included in the Facility; (iv) perspective renderings delineating
the overall design concept of the Facility; and (v) if COMPANY requests, a block
study model of the Facility as a means of further illustrating the general
layout and design intent. The foregoing shall be provided for each Construction
Phase. At that time, CONTRACTOR shall also submit on a preliminary basis an
Estimate of Project Cost, a proposed Project Budget, a proposed Project Schedule
for completion of the Construction Work and other preliminary information
necessary to design and budget the Facility.
4.3.1 CONTRACTOR shall provide a preliminary evaluation of the
program and the Project Budget requirements.
4.3.2 CONTRACTOR shall review with COMPANY alternative approaches to
design and construction of the Project. CONTRACTOR shall engage in such
"Value Engineering" with reasonable diligence and effort throughout the
duration of the Project. However, COMPANY shall not be obligated to accept
changes resulting from CONTRACTOR'S Value Engineering.
11
Based on the approved design documents, approved program and approved Project
Budget requirements, and any adjustments authorized by COMPANY in the program or
Project Budget or Project Schedule, CONTRACTOR shall prepare, for approval by
COMPANY, design documents to fix and describe the size, quality and character of
the entire Facility, its architectural, structural, plumbing, mechanical and
electrical systems, materials and such other elements of the Facility as may be
appropriate. CONTRACTOR shall submit to COMPANY a further Estimate of Project
Cost.
4.4 FINAL DESIGN PHASE. Based on the approved design documents and any
------------------
further adjustments in the scope or quality of the Facility or in the Project
Budget and Project Schedule, CONTRACTOR shall prepare, for approval by COMPANY,
construction documents consisting of specifications, drawings and data sheets
setting forth in detail the requirements for the construction of the Facility.
Drawings shall be in sufficient detail to define layouts and routings of the
required work for all construction disciplines involved so as to avoid field
construction conflicts and field rework. CONTRACTOR shall advise COMPANY of any
adjustments to previously submitted Project Schedule, Project Budget and
Estimate of Project Cost indicated by changes in requirements or changes in
market conditions. CONTRACTOR shall consult with and coordinate the preparation
of the Project Schedule, Project Budget and Estimate of Project Cost with
COMPANY.
4.5 SPECIFICATIONS AND DRAWINGS. CONTRACTOR shall prepare or obtain any
---------------------------
and all specifications and drawings that are needed for obtaining proper
materials and constructing and erecting the Facility. In addition to all other
requirements of the Contract relating to specifications and drawings, CONTRACTOR
shall submit to COMPANY two sets in electronic media form of all drawings and
specifications developed by CONTRACTOR or any subcontractor or vendor. COMPANY
shall review and approve CONTRACTOR'S job specifications, CONTRACTOR'S planning
drawings, plot plans, process flow diagrams, instrumentation drawings, equipment
layout sketches, mechanical diagrams, electrical diagrams, instrument control
drawings, and any other plans, drawings, and diagrams as well as all equipment
data sheets and specifications. As far as possible, the use of untried or
unproved innovations in design, materials and construction shall be avoided and
in no event shall such innovations be incorporated in the Facility without the
written consent of COMPANY, which consent may be withheld in COMPANY'S business
judgment exercised in good faith.
4.6 DATA SHEETS. CONTRACTOR shall furnish to COMPANY the data sheets
-----------
(including subcontractors' and vendors' drawings, design data, etc.) that may be
needed for COMPANY'S use in checking or approval of specifications and drawings
pertaining to the Facility. These data sheets and related material shall be
subject to COMPANY'S approval and shall be delivered to COMPANY along with or in
advance of the specifications and drawings to which they apply. However, the
parties understand that data sheets are a part of the specifications to which
they apply.
4.7 QUANTITIES AND RECIPIENTS OF DESIGN DOCUMENTS. CONTRACTOR shall
---------------------------------------------
furnish to COMPANY all plans, specifications, drawings, data sheets, reports,
requisitions, purchase orders, subcontracts, calculations, etc., as listed in
COMPANY'S "DISTRIBUTION SUMMARY SHEET" and in the quantities specified therein.
The Distribution Summary Sheet shall be jointly developed by CONTRACTOR and
COMPANY and included in the Project Procedures Manual.
4.8 AS BUILT DOCUMENTS. Upon completion of the Facility, and prior to
------------------
Final Acceptance (as defined in Section 15.3.1 below), CONTRACTOR shall deliver
--------------
to COMPANY the final plans, specifications, drawings and data sheets on paper
and in electronic media form; the said final plans, specifications, drawings and
data sheets shall be the complete and correct description of all
12
workmanship and materials as finally installed in the Facility. CONTRACTOR shall
also furnish a complete set of "as built" reproducible tracings on paper and in
electronic media form of all drawings which CONTRACTOR has prepared specifically
for and used on this job. CONTRACTOR shall also furnish to COMPANY all other
plans, specifications, drawings, data sheets, manuals, reports and other
documents required by the Articles 28 and 29 below.
----------- --
4.9 COMPANY NOT APPROVING OR WAIVING. Neither COMPANY'S receipt of Design
--------------------------------
Documents or of copies of purchase orders, subcontracts or other documents nor
its failure to comment on provisions thereof shall be construed as an approval
of any such provisions or operate as a waiver of, or in any way modify, any of
CONTRACTOR'S obligations and responsibilities hereunder or thereunder. However,
COMPANY shall respond to all Design Documents within the time periods specified
in Article 5 and to all purchase orders and subcontracts within the time periods
---------
specified in Section 9.2.1.
-------------
4.10 OPERATING MANUAL. CONTRACTOR shall furnish COMPANY as soon as
----------------
possible (but in any event at least 30 calendar days prior to the System
Performance Test (defined in Section 25.1) for each system within the Facility)
------------
the material relating to such system required from CONTRACTOR for the operating
manual which COMPANY shall prepare for use in the operation of the Facility -C
said material to be of the kind and in the quantities specified in COMPANY'S
DISTRIBUTION SUMMARY SHEET which shall be part of the Project Procedures Manual.
The drawings for the operating manual shall be made from CAD and text files
furnished by CONTRACTOR. It is understood that CONTRACTOR shall review the
operating manual and either approve it or offer suggestions for improving it.
4.11 OWNERSHIP OF DOCUMENTS. CONTRACTOR hereby transfers to COMPANY and
----------------------
any Affiliate (defined in Section 32.4.1) of COMPANY the right to use or modify,
--------------
during or after the term of this agreement and free of charge, all documents,
electronic media and other design items prepared or developed by CONTRACTOR in
connection with or associated with the performance of the Contract, including
but not limited to all Design Documents, plans, specifications, drawings, data
sheets, photos, negatives, film, diskettes, programs, copies, reports,
calculations, summaries, maps, models and samples, in connection with the
Facility or any other facility owned by COMPANY or any Affiliate of COMPANY, for
any purpose, including without limitation, construction, modification or
reconstruction of the Facility or other facilities. COMPANY'S or COMPANY'S
Affiliate's use shall include the right to make copies or reproductions. Any
intellectual property provided by CONTRACTOR, including but not limited to know
how, copyrights, or other legally protectable rights, used or developed by
Contractor in connection with or in the course of the performance of the
Contract shall remain the property of CONTRACTOR and CONTRACTOR may elect to
seek protection for such intellectual property at its discretion. In particular,
CONTRACTOR may use such intellectual property in connection with the
construction of other facilities. To the extent any subcontractor or vendor
shall be preparing or developing documents, electronic media or other design
items referenced in this Section, CONTRACTOR shall use its best efforts to
include in all such subcontracts or purchase orders and consulting agreements
entered into by CONTRACTOR appropriate clauses to ensure COMPANY'S foregoing
rights of use. (For example, but without limiting the foregoing, CONTRACTOR
shall use its best efforts to ensure that all subcontractors and vendors convey
and grant to COMPANY the foregoing rights of use of the documents, electronic
media or other design items developed in connection with or associated with the
performance of the Contract.)
4.12 OBTAINING PERMITS. CONTRACTOR shall apply for, secure and pay for the
-----------------
building permit and any other permits, governmental approval of Design
Documents, licenses and inspections by governmental agencies with jurisdiction
over the Project as may be necessary to commence, prosecute and complete the
13
Construction Work and use and occupy the Facility. CONTRACTOR shall comply with
and give notices required by law and lawful orders of public authorities bearing
on performance of the Construction Work. CONTRACTOR shall apply for the
building permit and other permits in sufficient time to receive them by the time
called for in the Project Schedule. Any delay in the Project Schedule caused by
CONTRACTOR'S late application for a permit (that CONTRACTOR has the
responsibility of obtaining) that results in an increase in the Cost of the Work
shall be paid by CONTRACTOR.
4.13 COMPLIANCE WITH CODE REQUIREMENTS. CONTRACTOR shall review
---------------------------------
applicable zoning ordinances and building codes and shall prepare the Design
Documents in conformance to all applicable legal requirements and design
restrictions.
ARTICLE 5
APPROVAL OF DESIGN DOCUMENTS
5.1 APPROVAL BY COMPANY. COMPANY will designate in writing one
-------------------
Representative who shall have full authority to approve or disapprove on behalf
of COMPANY all Design Documents which CONTRACTOR is required to submit to
COMPANY for approval in accordance with the provisions of Article 4 hereof.
---------
Except as provided to the contrary in Section 5.3 below, CONTRACTOR shall not
-----------
release orders to vendors, to subcontractors, to CONTRACTOR'S shops, or to
CONTRACTOR'S field construction department until COMPANY has approved all
specifications, drawings, and data sheets that apply to such orders. CONTRACTOR
shall furnish to COMPANY plans, specifications, drawings, data sheets, Project
Schedule, Project Budget and Estimate of Project Cost not later than the dates
set forth in the document entitled "AMD Fab 30 Dresden", plot date 10/10/96,
which by this reference is made a part hereof. COMPANY shall have ten (10)
working days after its receipt of plans, specifications, drawings and data
sheets to approve or comment on such plans, specifications, drawings and data
sheets submitted by CONTRACTOR to COMPANY for approval or comment. COMPANY
shall have ten (10) working days after its receipt of the Project Schedule,
Project Budget and then current Estimate of Project Cost to approve or comment
thereon. In the event of force majeure, the time for approval shall be extended
by the period of time COMPANY has been prevented from acting. In cases where
COMPANY submits comments on any such plans, specifications, drawings, data
sheets or other documents, CONTRACTOR shall make the revisions necessary to
obtain COMPANY'S approval thereof and shall submit in writing the amount of any
additional costs associated with the changes requested by COMPANY. Such revised
plans, specifications, drawings, data sheets and other documents shall be
submitted to COMPANY for approval currently as the revisions are made. In the
event that COMPANY fails to approve or comment on any of the aforesaid plans,
specifications, drawings, data sheets or other documents within ten (10) working
days and CONTRACTOR has fulfilled all its obligations in connection with
securing approval thereof, then CONTRACTOR may notify COMPANY in writing if
COMPANY'S delay would have an effect on the critical path set forth in the
Project Schedule or would increase the Budgeted Cost of the Work set forth in
the Project Budget. In such a case, if COMPANY requests, CONTRACTOR shall
prepare a Schedule Recovery Plan (including associated costs) for COMPANY'S
consideration. COMPANY may authorize CONTRACTOR to begin Construction Work
depicted on those Design Documents as to which Company's approval has been
delayed and any rework costs caused by COMPANY'S delay in approval shall become
Reimbursable Costs (defined in Section 16.1), and the Budgeted Cost of the Work
------------
shall be adjusted pursuant to Section 14.4. If COMPANY is delayed in acting on
------------
any plans, specifications, drawings, or data sheets by reason of CONTRACTOR'S
failure to fulfill any of its obligations in connection with securing approval
thereof, COMPANY shall notify CONTRACTOR of such failure within the aforesaid
allotted time; and the aforesaid time allowed COMPANY for acting on the plans,
specifications, drawings, and data sheets involved in the delay shall then be
14
deemed to commence after CONTRACTOR rectifies such failure. The periods herein
allowed COMPANY for acting on plans, specifications, drawings and data sheets
shall be understood to refer to the time during which such plans,
specifications, drawings, and data sheets are actually in the possession of the
Representative designated by COMPANY to act on such matters (or in possession of
his office or deputy, in case of said Representative's absence); and shall not
include any time during which said plans, specifications, drawings, data sheets,
or notices of approval or disapproval of them, are in transit. CONTRACTOR is
deemed to have included sufficient time periods for review and approval by
COMPANY, of all Design Documents and shop drawings and submittals within the
Project Schedule. As regards all other engineering work performed by CONTRACTOR
hereunder, COMPANY shall have the right to review said engineering work
currently to the extent COMPANY finds desirable, and if any question shall arise
as to design adequacy, CONTRACTOR shall satisfy COMPANY of the soundness of its
proposed design and specifications. CONTRACTOR shall make such modifications in
its engineering work as are necessary to conform with the approved plans,
specifications, drawings, and data sheets and to correct errors or faulty
design.
5.2 SCHEDULE OF SUBMITTALS. To avoid overtaxing COMPANY'S facilities for
----------------------
reviewing and checking plans, specifications, drawings, data sheets, Project
Schedule, Project Budget and Estimate of Project Cost, CONTRACTOR shall plan and
publish a schedule defining when CONTRACTOR will submit said plans,
specifications, drawings, data sheets, Project Schedule, Project Budget and
Estimate of Project Cost. Such plan shall be consistent with the document
entitled "AMD Fab 30 Dresden" referred to in Section 5.1. To expedite such
-----------
work, as rapidly as CONTRACTOR prepares or obtains said documents, CONTRACTOR
shall, when and if requested to do so, furnish COMPANY (for information purposes
only) preliminary issues of those documents that CONTRACTOR is preparing, in
advance of their final completion.
5.3 BULK ORDERS. Any provision in Section 5.1 of this Article 5 to the
----------- ----------- ---------
contrary notwithstanding, CONTRACTOR may release bulk orders for such
materials as pipe, ordinary valves and fittings, reinforcing steel, electrical
wire, conduit and fittings, brick, and the like without COMPANY'S prior approval
of the drawings and data sheets applying to said materials, provided COMPANY
--------
shall have approved such bulk orders and their release in writing prior to the
release and said materials are ordered in accordance with applicable
specifications approved by COMPANY.
5.4 RETURN OF DESIGN DOCUMENTS TO CONTRACTOR. One copy each of all plans,
----------------------------------------
specifications, drawings, and data sheets submitted to COMPANY for approval
shall be returned to CONTRACTOR marked either "APPROVED," "APPROVED AS MARKED,"
or "REVISE AS INDICATED." However, CONTRACTOR shall not release orders or begin
work covered by any plans, specifications, drawings, or data sheets that are
returned to it marked "REVISE AS INDICATED"; and all such plans, specifications,
drawings, and data sheets shall be first revised by CONTRACTOR and resubmitted
to COMPANY for its approval and such approval obtained before any orders are
released or work is begun thereunder. All requirements hereinbefore set forth
pertaining to the approval of plans, specifications, drawings, and data sheets
shall apply with equal force to any and all revisions of plans, specifications,
drawings, and data sheets. COMPANY'S marking any plans, specifications,
drawings and data sheets as aforesaid shall not relieve CONTRACTOR of its
responsibilities under the Contract, and all approvals or revisions by COMPANY
shall be subject to the limitations expressed in Section 5.5.
-----------
5.5 NATURE OF COMPANY'S APPROVAL OF DESIGN DOCUMENTS. COMPANY'S approval
------------------------------------------------
or revision of plans, specifications, drawings, or data sheets, or of any other
material submitted to it for approval pursuant to Article 4 hereof, is not
---------
intended to replace or supersede in any way CONTRACTOR as the architect
15
and engineer of the Project, will not relieve CONTRACTOR of its full and sole
responsibility to provide the design and engineering services for the Project,
will not operate as a waiver of, or in any modify, any of CONTRACTOR'S
obligations and responsibilities hereunder or thereunder and will not in any way
alter the complete and sole responsibility of CONTRACTOR to design and engineer
a Facility of lawful, satisfactory design, construction, and operation. If
COMPANY insists upon a design that CONTRACTOR states in writing is unsuitable
and states CONTRACTOR'S reasons for so concluding, CONTRACTOR shall not be
liable for any problems caused by such design. As stated in Section 1.3.4,
-------------
CONTRACTOR is not responsible for the design of the Wafer Process Equipment.
5.6 DELAY BY CONTRACTOR OR COMPANY IN DELIVERY OF DESIGN DOCUMENTS.
--------------------------------------------------------------
5.6.1 DELAY BY CONTRACTOR IN DELIVERY. In the event CONTRACTOR fails to
-------------------------------
deliver any Design Documents or other items, including without limitation
submittals or shop drawings, to COMPANY by the dates agreed upon, CONTRACTOR
shall develop a Schedule Recovery Plan. Should any additional costs to the
Project occur as a result of such delay(s) or the effort(s) necessary to recover
therefrom, all such costs shall be solely for CONTRACTOR'S account. Such delays
shall not result in a change in the Project Schedule.
5.6.2 DELAY BY COMPANY IN DELIVERY. In the event COMPANY fails to respond
----------------------------
to such Design Documents or other items within ten (10) working days in
accordance with Section 5.1, then (a) CONTRACTOR shall have the right to give
-----------
COMPANY'S Representative 24-hours notice of such failure in accordance with
Section 14.4.4.
--------------
ARTICLE 6
SITE
6.1 EASEMENTS PROVIDED BY COMPANY. Subject to the understanding that
-----------------------------
CONTRACTOR shall procure all business licenses and business permits that it may
need in connection with its work under the Contract, and will obtain all
building permits and other governmental authorizations and approvals, COMPANY
shall obtain all rights and easements required in connection with the
development of the Site; and CONTRACTOR shall comply with all the provisions
thereof insofar as said provisions apply to the execution of CONTRACTOR'S work
under the Contract. Both parties shall cooperate in assisting in the other
party's efforts to obtain such permits, licenses and easements.
6.2 CONDITION OF SITE. The Site upon which the Facility is to be located
-----------------
will be turned over to CONTRACTOR "As Is" in the condition it is in on the date
of such delivery. CONTRACTOR shall perform such geotechnical, meteorological,
soil and other tests as CONTRACTOR deems necessary during the design of the
Facility. CONTRACTOR shall be responsible for all conditions which are known,
or reasonably should have been known, to be affecting the Site, except pre-
existing environmental contaminants, pollutants and hazardous and solid wastes,
located on or under the Site, unless CONTRACTOR or any of its subcontractors,
vendors, agents or representatives released or otherwise caused any
environmental contaminants, pollutants or waste to be present at the Site, in
which case CONTRACTOR'S indemnity set forth in Section 20.1 shall apply to such
------------
environmental contaminants, pollutants or waste. In the course of performing
the Construction Work, CONTRACTOR shall execute all work related to the Site
such as excavating, trenching, back-filling, filling, compacting, grading and
landscaping. If CONTRACTOR is requested by COMPANY to perform the work, such
work shall also include any work necessary to remedy environmental problems
which may be discovered in the course of carrying out the project (such as,
e.g., the removal of contaminated soil and the removal of underground tanks,
chemicals or munitions). The public law responsibility of COMPANY as owner of
the Site vis-a-vis the State of Saxony and the City of
16
Dresden shall not be affected hereby. To the extent that additional fill
material is needed for this work, CONTRACTOR shall provide same. CONTRACTOR
shall remove the excess spoil and back-fill material from the job site and
dispose of it, in a manner satisfactory to COMPANY, as required by law
applicable to the Site and as specified in the Contract Documents. All net
proceeds from the disposition of soil taken from the Site shall be applied to
pay CONTRACTOR'S excavation and other costs hereunder and shall be shown as a
credit on the next Application for Payment submitted by CONTRACTOR pursuant to
Section 17.1 below.
------------
6.3 BENCHMARK. COMPANY and CONTRACTOR shall agree on a suitable bench-
---------
▇▇▇▇ and reference points for locating the Facility and the Site boundary lines.
CONTRACTOR shall thereafter establish from said bench-▇▇▇▇ and reference points
the elevations and lines required for the proper location of all materials to be
installed by CONTRACTOR. It shall be CONTRACTOR'S responsibility to preserve
the aforesaid bench-▇▇▇▇ and reference points in an undisturbed condition.
6.4 UNDERGROUND UTILITIES. CONTRACTOR shall determine the exact locations
---------------------
of existing underground utility and service lines indicated on the drawings
before starting work and shall make suitable provisions for their protection.
CONTRACTOR shall install all utility and service lines and facilities required
as a part of the Facility.
Article 7
Acceptance of Site
7.1 CONTRACTOR'S INSPECTION OF SITE. CONTRACTOR'S delivery to COMPANY of
-------------------------------
the Design Documents, the Project Schedule and the Project Budget shall be
deemed an acknowledgment that it has examined and is familiar with the Site
upon which the Facility is to be erected and has, by careful investigation
satisfied itself as to the location of the Site and the areas assigned to it for
its uses, the conformation of the ground, sub-surface, environmental and other
soil conditions, the difficulties attending the execution of the Construction
Work, the general and local labor conditions, and all other matters which can in
any way affect the execution of the Construction Work. A list of the site
studies furnished by COMPANY to CONTRACTOR, which CONTRACTOR has reviewed, is
attached hereto as Schedule 7.1 and made a part hereof. CONTRACTOR shall be
------------
responsible for all conditions which is known, or reasonably should have been
known, to exist below the surface of the ground, excluding pre-existing
environmental contaminants, pollutants and waste.
ARTICLE 8
CONDUCT OF THE CONSTRUCTION WORK
8.1 CONSTRUCTION IN ACCORDANCE WITH APPROVED DESIGN DOCUMENTS. CONTRACTOR
---------------------------------------------------------
shall construct the Facility on the Site and in accordance with the Design
Documents approved by COMPANY.
8.2 PARTIES' RELATIONSHIP. Both parties hereto undertake to cooperate
---------------------
with each other. CONTRACTOR will therefore furnish its best skill and judgment
in fulfillment of its contractual obligations.
8.3 EFFICIENT ADMINISTRATION. CONTRACTOR shall furnish efficient business
------------------------
administration and supervision, shall use every effort to keep engaged in the
Construction Work at all times an adequate supply of qualified workmen and
materials, and shall execute the Construction Work in the most expeditious
manner consistent with the interests of COMPANY and the provisions of the
Contract. If the services of vendors' erection engineers are required for
supervising the installation of any materials, CONTRACTOR shall arrange for said
services promptly as needed.
17
8.4 "BUILD CLEAN" PROTOCOL. CONTRACTOR shall prepare an effective and
----------------------
efficient "Build Clean" protocol that shall insure that all clean areas of the
Facility shall meet COMPANY'S requirements for particulate-free, clean areas
during construction and after completion of construction. CONTRACTOR shall
submit the Build Clean protocol to COMPANY for approval, shall make such changes
in the protocol as COMPANY may require, and after COMPANY has approved the
protocol, shall implement and observe this protocol at all times. CONTRACTOR
shall comply with the Build Clean protocol at all times during construction of
the Facility.
8.5 EQUIPMENT STANDBY. In the event of a suspension of Construction Work
-----------------
pursuant to Article 34, CONTRACTOR shall submit to COMPANY, by 12:00 noon of
----------
each working day, a complete listing of all equipment on standby. Said listing
is to specify the exact location of each item of equipment. All items of
equipment shall be made available for inspection by COMPANY on the same day as
listed. Items not listed on the standby equipment listing and/or items not
available for inspection and/or items not in a condition to be used in pursuit
of completion of the construction activities on the same day as listed shall not
be eligible for standby consideration.
8.6 CONSTRUCTION BY COMPANY. COMPANY reserves the right to enter the Site
-----------------------
for the purpose of constructing, with its own forces or through other
contractors, such collateral work for the Facility as COMPANY may desire to
construct. Such collateral work shall be carried on in such manner and
constructed at such times that it will not unreasonably interfere with the work
of CONTRACTOR; and, subject to this proviso, CONTRACTOR hereby agrees that it
will not interfere with or prevent (nor allow its subcontractors to interfere
with or prevent) the construction of such collateral work. In the event the
construction of such collateral work causes CONTRACTOR to incur additional
costs, COMPANY shall pay such additional costs.
8.7 COMPATIBLE LABOR. CONTRACTOR shall undertake reasonable efforts to
----------------
furnish labor that is compatible with other labor in the area of the Facility.
8.8 LABOR AGREEMENT PRACTICES. CONTRACTOR shall keep itself and COMPANY
-------------------------
fully advised as to all pertinent local and regional labor agreement practices,
including any labor contract negotiations occurring during the term of this
Contract. In the event CONTRACTOR has a collective bargaining agreement, either
locally or nationally with a labor union engaged in local negotiations or if
CONTRACTOR will be affected, either directly or indirectly, by the outcome of
said local negotiations, CONTRACTOR agrees to join in said negotiations, if
legally permissible, and participate or associate itself with any local
contractors involved in said negotiations in an endeavor to resolve the labor
dispute.
8.9 OVERTIME LABOR. In case COMPANY requests CONTRACTOR in writing to
--------------
employ any overtime labor at the Project, CONTRACTOR shall comply with such
request provided the requisite labor and materials are available. However,
except at the written request of COMPANY or with COMPANY'S prior written
approval, neither CONTRACTOR nor any of its subcontractors shall adopt any
schedule of wages and hours for work on the Project which involves the routine
use of overtime labor or the payment of bonuses in addition to the prevailing
wage scales. Such request for prior approval will not be a prerequisite for the
performance of unscheduled overtime work in those non-routine situations which
may arise from time to time requiring the use of overtime (as, for example,
finishing a pour of concrete). COMPANY acknowledges that the current Project
Budget anticipates some overtime and shift work.
8.10 IDENTIFICATION. CONTRACTOR'S and all subcontractors' and vendors'
--------------
officers and employees shall display proper identification at all times when
entering the Site and while on the Site. CONTRACTOR shall establish a system
18
that permits only those persons with proper identification to enter or to remain
upon the Site.
8.11 COMMENCEMENT AND PROSECUTION OF CONSTRUCTION WORK. CONTRACTOR shall
-------------------------------------------------
commence the Construction Work not later than the date scheduled for
commencement in the Project Schedule and shall prosecute the Construction Work
to completion in accordance with the Project Schedule. The Construction Work on
the Project as a whole and on each Construction Phase shall be prosecuted at
such time, and in or on such part or parts of the Project or a Construction
Phase as may be required, to complete the Project or such Construction Phase as
contemplated in the Contract Documents and as prescribed by the Project
Schedule. Prosecution of the Construction Work to completion shall be monitored
with reference to the Project Schedule. In the event any part of the
Construction Work falls in arrears of the Project Schedule, CONTRACTOR shall
prepare a Schedule Recovery Plan and present it to COMPANY for discussion and
review. If requested by COMPANY, CONTRACTOR shall implement a Schedule Recovery
Plan. CONTRACTOR shall remain on such course of action until such time as the
degree of completion of the Construction Work complies with the Project
Schedule. Increased costs associated with the Schedule Recovery Plan shall be
Reimbursable Costs, except that (i) the Budgeted Cost of the Work and the
-----------
Project Budget shall not be increased, and (ii) any increased costs attributable
to delay caused by the mismanagement or willful act or neglect of CONTRACTOR,
its subcontractors or vendors or their respective officers, agents,
representatives or employees shall be paid by CONTRACTOR.
8.12 CONTRACTOR RESPONSIBLE FOR CONSTRUCTION MEANS. CONTRACTOR shall be
---------------------------------------------
solely and completely responsible for all construction means, methods,
techniques, and procedures, and for providing adequate safety precautions and
coordinating all portions of the Construction Work under the Contract.
CONTRACTOR shall perform all tasks in a skilled and ▇▇▇▇▇▇▇-like manner and
shall supervise the Construction Work in an efficient and skillful manner.
CONTRACTOR shall be responsible for coordinating work done by the various trades
involved and for the installation of equipment and special items as specified.
In no event shall the lack of objection by COMPANY to any action or inaction
upon the part of CONTRACTOR, be construed to make COMPANY in any manner
whatsoever responsible for CONTRACTOR'S construction means, methods, techniques,
procedures or impose any other liability or responsibility on COMPANY
whatsoever.
8.13 SPECIALIZED CONSTRUCTION MANAGER REQUIRED BY LAW. CONTRACTOR assumes,
------------------------------------------------
with respect to the services to be provided by CONTRACTOR hereunder, the
function of a responsible specialized construction manager in accordance with
the provisions of the Building Code of Saxony.
8.14 SANITATION. CONTRACTOR shall erect and maintain sanitary conveniences
----------
conforming to state and local codes at all times while workers are employed at
the Site.
8.15 SAFETY AND SECURITY.
-------------------
8.15.1 CONTRACTOR'S RESPONSIBILITY FOR SAFETY. CONTRACTOR shall be
--------------------------------------
solely and completely responsible for conditions of the job site, including
safety of all persons (including employees) and property during performance of
the Construction Work. This requirement shall apply continuously and not be
limited to normal working hours. Safety provisions shall conform to those
applicable within the framework of social insurance for occupational accidents,
and all other applicable federal, state, and local laws, ordinances, codes, the
requirements set forth below, and any regulations that may be detailed in other
parts of the Contract Documents. Where any of these are in conflict, the more
stringent requirement shall be followed.
19
8.15.2 SAFETY PROGRAM. CONTRACTOR shall develop and maintain for the
--------------
duration of the Contract, a safety program that will effectively incorporate and
implement all required safety provisions. CONTRACTOR, as a part of the safety
program, shall maintain at its office or other well-known place at the Site,
safety equipment applicable to the Construction Work as prescribed by the
aforementioned authorities, all articles necessary for giving first aid to the
injured, and shall establish the procedure for the immediate removal to a
hospital or a doctor's care of persons (including employees) who may be injured
on the Site. CONTRACTOR shall appoint an employee who is qualified and
authorized to supervise and enforce compliance with the safety program. Such
employee shall report directly to CONTRACTOR'S senior Project construction
superintendent who shall assure that the safety program is implemented and
observed. Any duty of COMPANY to conduct a construction review of CONTRACTOR'S
performance is not intended to include a review or approval of the adequacy of
CONTRACTOR'S safety supervisor, the safety program, or any safety measures taken
in, on, or near the Site.
8.15.3 REPORTING AND INVESTIGATING ACCIDENTS. If death or serious
-------------------------------------
injuries or serious damages are caused, the accident shall be reported
immediately by telephone or messenger to COMPANY. In addition, CONTRACTOR must
promptly (but in not less than five (5) calendar days after the occurrence of
the accident) report in writing to COMPANY all accidents whatsoever arising out
of, or in connection with, the performance of the Construction Work whether on,
or adjacent to, the Site, giving full details and statements of witnesses.
Contractor shall investigate any such accident and provide to COMPANY a written
report within thirty (30) calendar days after the occurrence of the accident
describing in full detail the corrective actions that Contractor has implemented
to avoid or reduce the likelihood of a recurrence of the accident.
8.15.4 REPORTING CLAIMS. If a claim is made by anyone against
----------------
CONTRACTOR or any subcontractor on account of any accident, CONTRACTOR shall
promptly report the facts in writing to COMPANY, giving full details of the
claim.
8.15.5 COMPLIANCE WITH STATE SAFETY REQUIREMENTS. The completed
-----------------------------------------
Facility shall include all necessary permanent safety devices, such as machinery
guards and similar ordinary safety items required by the state or federal
authorities and applicable local and national codes or requirements, or the
safety requirements of a recognized agency. Further, any features of the
Construction Work subject to such safety regulations shall be fabricated,
furnished and installed in compliance with these requirements. CONTRACTOR shall
require all subcontractors and vendors to comply with these requirements.
8.15.6 SAFETY OF TOOLS. CONTRACTOR'S equipment and tools used on
---------------
the Construction Work shall be of a capacity and a type that will safely perform
the work specified, and shall be maintained and used in a manner that will not
create a hazard to persons or property, or cause a delay in the progress of the
Construction Work.
8.15.7 CONTRACTOR'S SAFETY REQUIREMENTS IN FACILITY. From and after
--------------------------------------------
the time CONTRACTOR begins preparing and conditioning the Facility or any system
within the Facility for testing or operation pursuant to the provisions of
Article 24 hereof, CONTRACTOR and its subcontractors, while engaged in any
----------
activity in the Facility, shall observe and abide by all of CONTRACTOR'S safety
requirements applicable in the Facility, which shall be reviewed and reasonably
approved in advance by COMPANY.
20
8.15.8 SECURITY. CONTRACTOR shall be solely and completely
--------
responsible for the security of the job site, including protection of personnel,
the work and materials.
8.16 MATERIALS.
---------
8.16.1 NEW MATERIALS. All materials (including equipment) shall be
-------------
new, unless otherwise agreed by COMPANY in writing.
8.16.2 RESPONSIBILITY FOR INJURY CAUSED BY EQUIPMENT. CONTRACTOR
---------------------------------------------
shall be responsible for injury or claims resulting from failure of the
equipment (other than equipment procured by COMPANY) to comply with applicable
safety requirements of state or federal authorities and applicable local and
national safety codes or requirements, or the safety requirements of a
recognized agency, or failure due to faulty design concepts, or defective
workmanship and materials.
8.16.3 SUBSTITUTION OF MATERIALS. Whenever any material or equipment
-------------------------
process is indicated or specified by patent or proprietary name, by name of
manufacturer, or by catalog number, such specifications shall be deemed to be
used for the purpose of establishing a standard of quality and facilitating the
description of the material, equipment or process desired. This procedure is not
to be construed as eliminating from competition other products of equal or
better quality by other manufacturers where fully suitable in design. CONTRACTOR
may, after completing its design services, recommend to COMPANY the
consideration of another material, equipment or process which shall be
substantially equal in every respect to that so indicated or specified.
Substitute materials, equipment or processes shall not be used unless approved
in writing by COMPANY. Such approval shall be pursuant to Section 4.3.2. If
-------------
CONTRACTOR recommends a substitute material, equipment or process, CONTRACTOR
shall be deemed to have agreed with, and represented and warranted to COMPANY,
the following:
8.16.3.1 The proposed substitute will perform adequately the
functions required by the design, is of substance equal to that specified,
and is suited to the same use and capable of performing the same function
as that specified, and will provide the same degree of capacity and
performance flexibility as indicated by the scheduled or specified
performance data.
8.16.3.2 Required connections (electrical, piping, and other)
can be properly made and adjunctive work can be properly accomplished.
8.16.3.3 The item can be installed in the space available and in
the manner shown or CONTRACTOR will provide at no cost to COMPANY an
acceptable redesign and all modifications necessary to accommodate the
substitute item.
8.16.3.4 CONTRACTOR shall assume full responsibility for any and
all problems arising from the use of the substitute material, equipment or
process.
8.16.3.5 CONTRACTOR shall assume full responsibility for any
delay in the Project Schedule resulting from the use of the substitution.
8.16.3.6 CONTRACTOR shall pay all costs of changes in other
elements or parts of the Construction Work which result from the
installation of the substitution.
21
8.16.3.7 CONTRACTOR shall provide the same guarantees and
warranties for the substitute as for the specified product.
8.16.3.8 Motors for proposed alternate equipment shall have the
same minimum differential between motor brake horsepower and motor name
plate horsepower as for specified equipment.
8.16.4 MATERIALS OBJECTED TO BY CONTRACTOR. If COMPANY insists upon
-----------------------------------
the use of certain materials or processes that CONTRACTOR states in writing is
unsuitable and states CONTRACTOR'S reasons for so concluding, CONTRACTOR shall
not be liable for any defects caused by such materials or processes.
8.17 STORAGE OF MATERIALS. CONTRACTOR shall store materials delivered
--------------------
to the Site in an orderly and suitable manner and shall protect them against
theft and damage.
8.18 CLEANING UP. CONTRACTOR shall, at all times, keep the Site and all
-----------
adjacent property free from accumulations of waste material or rubbish caused by
CONTRACTOR'S or any subcontractor's employees or by the Construction Work. Upon
completion of the Construction Work, CONTRACTOR shall remove all temporary
structures, rubbish, and waste materials resulting from its operations.
CONTRACTOR shall adhere to and implement the Clean Build protocol. Should
CONTRACTOR, in COMPANY'S opinion, not comply in this matter, COMPANY may give
CONTRACTOR written notice of such non-compliance. If CONTRACTOR fails to cure
its non-compliance within ten (10) working days, COMPANY reserves the right to
deduct any and all costs incurred in maintaining cleanliness from the next
monthly payment.
ARTICLE 9
PURCHASING MATERIALS, SUBCONTRACTING WORK AND COMPUTERS
9.1 PURCHASING MATERIALS. CONTRACTOR shall notify COMPANY if any purchase
--------------------
of materials will increase the cost of the work beyond the amount approved by
COMPANY in the Project Budget.
9.2 SUBCONTRACTING WORK.
-------------------
9.2.1 THIRD PARTY SUBCONTRACTS AND VENDORS. CONTRACTOR and COMPANY
------------------------------------
shall each submit to the other the names of all subcontractors and vendors which
either party proposes for the Construction Work and information regarding them
as COMPANY or CONTRACTOR may reasonably request. CONTRACTOR and COMPANY shall
mutually approve the list of prospective subcontractors and vendors from whom
CONTRACTOR shall solicit bids. CONTRACTOR shall select the subcontractors and
vendors for the Project that CONTRACTOR intends to utilize from the approved
bidders list. As described below in this Section, COMPANY shall review and
approve the subcontractors and vendors selected by CONTRACTOR. If COMPANY
requests CONTRACTOR to enter into a subcontract or purchase order with a person
whose bid exceeded the bid of a person that CONTRACTOR desires to employ, and
CONTRACTOR would not otherwise agree to award a subcontract or purchase order to
such higher bidder, the parties shall issue a Change Order for the amount of the
difference between the two bids, the Budgeted Cost of the Work and the Project
Budget shall be increased by the amount of such difference, and CONTRACTOR shall
utilize such higher bidder. CONTRACTOR and COMPANY shall mutually agree on the
vendors of the systems for chemicals, specialty gases and ultra pure water who
shall be included on the approved bidders list, but COMPANY shall have the sole
right to select the vendor of each such system. CONTRACTOR shall not employ any
subcontractors and vendors that are not on the list of approved bidders.
CONTRACTOR shall not enter into any purchase orders or subcontract any work
pertaining to the Project, nor permit any of its subcontractors to do so,
without first
22
obtaining COMPANY'S written approval as to the kind and extent of
the Construction Work to be included in the purchase order or subcontract; the
type of purchase order or subcontract and payment schedule; the person to be
favored with the Construction Work; and the amount or amounts to be paid under
each purchase order or subcontract. COMPANY'S approval shall be granted or
denied within ten (10) working days after receipt of the purchase order or
subcontract. If COMPANY fails to approve or disapprove within said period of
ten (10) working days, CONTRACTOR shall have the right to give COMPANY'S
Representative 24-hours notice of COMPANY'S failure in accordance with Section
--------
14.4.4. CONTRACTOR will require and insure that all vendors and
-------
subcontractors, and their subcontractors, comply with and participate in, all
schedule reporting, performance reporting, cost reporting and dispute resolution
requirements of this Agreement. All subcontracts and purchase orders shall
contain provisions requiring the subcontractors and vendors, upon receipt of
COMPANY'S written demand, or the written demand of any lender providing part or
all of the financing for the Facility, to perform their obligations under such
subcontracts and purchase orders for COMPANY or for such lender, if COMPANY or
such lender takes over the work or terminates the Contract, as hereinafter
provided. CONTRACTOR shall provide to COMPANY or such lender and shall update,
at least monthly, a list of all subcontractors and vendors involved in the
Project.
9.2.2 CONTRACTOR BIDDING ON SUBCONTRACTED WORK. If CONTRACTOR
----------------------------------------
desires to perform any part of the Construction Work (including without
limitation supplying any materials) on a cost plus fee basis, CONTRACTOR shall
do so and the provisions of this Agreement shall apply thereto. If CONTRACTOR
desires to perform any part of the Construction Work (including without
limitation supplying any materials) on a lump sum basis, CONTRACTOR may submit a
bid to COMPANY but only upon the following conditions: (i) all other persons
bidding on such part of the Construction Work shall be informed that CONTRACTOR
will also be bidding; and (ii) COMPANY alone shall select the bidder who shall
perform such part of the Construction Work. If COMPANY selects a bidder other
than CONTRACTOR, CONTRACTOR shall enter into a subcontract or purchase order
with such bidder and shall manage that part of the Construction Work as if
CONTRACTOR had not participated in such bidding. If COMPANY selects CONTRACTOR,
CONTRACTOR shall perform such part of the Construction Work in accordance with
CONTRACTOR'S bid and, to the extent not inconsistent with CONTRACTOR'S bid, in
accordance with the Contract. All warranties and guarantees contained herein
shall apply to such work, whether or not performed by CONTRACTOR.
9.3 NATURE OF COMPANY'S APPROVAL. COMPANY'S approval of any purchase
----------------------------
order or subcontract shall be construed to apply only to the items mentioned in
Sections 9.1 and 9.2 above, unless otherwise expressly stated in such approval,
------------ ---
and such approval shall not be construed to alter, amend, or waive any provision
of the Contract.
9.4 CONTRACTOR RESPONSIBLE FOR SUBCONTRACTORS. CONTRACTOR shall be fully
-----------------------------------------
responsible to COMPANY for the acts and omissions (including without limitation
negligence) of its vendors and subcontractors and of persons either directly or
indirectly employed by them. Nothing contained in the Contract Documents shall
create any contractual relation between any subcontractor or vendor and COMPANY.
9.5 COST-PLUS SUBCONTRACTS. Subcontracts and purchase orders may be
----------------------
compensated on a "cost reimbursable" basis only with the prior written consent
of COMPANY. COMPANY may grant or deny its consent based upon COMPANY'S business
judgment exercised in good faith. COMPANY shall grant or deny its consent
within a reasonable period of time.
23
9.6 COMPUTERS. All of CONTRACTOR'S personal computers, work stations and
---------
printers shall operate in the same computing environment that COMPANY maintains,
including without limitation PCs running Microsoft Windows, MS Word and MS
Excel. The version of any software used by CONTRACTOR shall be totally
compatible with COMPANY'S software and equipment. CONTRACTOR must insure that
all computer files and other data and disks given to COMPANY, and all computer
files used in the field, are virus-free by routine, daily use of a virus-
detecting program.
9.7 Import Requirements. Contractor shall be responsible for securing all
-------------------
necessary import licenses and permits and for complying with all applicable
customs and other import requirements applicable to the Construction Work.
ARTICLE 10
CHANGES, ADDITIONS, AND OMISSIONS IN THE WORK
10.1 KEEPING ACCOUNT OF CHANGES. The Fab 30 Preliminary Design, including
--------------------------
all documents which have been agreed upon by the parties on or before the date
of execution of this Contract and that define modifications to the Fab 30
Preliminary Design, shall serve as the basis for keeping account of changes,
additions, and omissions in the Facility. The effect of all changes, additions
and omissions on the Project Budget and the Project Schedule shall be accounted
for separately so that a record will be maintained of the initial Project Budget
and the initial Project Schedule. As to any change, addition or omission that
must be incorporated into the Project Budget or Project Schedule, the effect on
the Project Budget and Project Schedule (and on CONTRACTOR'S Budgeted Fee) will
be reflected in the document reflecting COMPANY'S approval of the change,
addition or omission (the "CHANGE ORDER").
10.2 PROPOSING AND APPROVING CHANGES. Both parties hereto may from time to
-------------------------------
time suggest modifications in the design of the Facility or the performance of
the Construction Work which (i) involve changes or additions in the construction
(which as used in this Article 10 shall mean materials or work to be performed)
----------
required by the Contract, or (ii) involve the omission of certain work or
materials from said construction, or (iii) involve acceleration or delay of the
milestones for substantial completion of one or more Construction Phases set
forth in the Project Schedule. However, no such change, addition, or omission
shall be made in the construction unless authorized in writing by COMPANY at the
time when the suggested modification in design or performance of the work or
acceleration or delay of the Project Schedule is under consideration except in
an emergency endangering life or property. In case COMPANY authorizes any such
change, addition, or omission as aforesaid, COMPANY shall execute a Change
Order, and CONTRACTOR shall incorporate same in the final construction unless
CONTRACTOR can show, and it is mutually agreed, that said change, addition, or
omission would (a) place CONTRACTOR'S guarantees in jeopardy, (b) make it
impossible for CONTRACTOR to comply with other provisions of the Contract
relating to the original construction not disturbed by nor involved in said
change, addition, or omission, or (c) make the Facility or any part thereof
unsafe. If it is agreed that said change, addition, or omission would jeopardize
CONTRACTOR'S guarantees or would make it impossible for CONTRACTOR to comply
with said other provisions of the Contract (but would not make the Facility or
any part thereof unsafe), COMPANY may, at its option, authorize the substitution
of mutually acceptable revised guarantees or mutually acceptable revised
provisions for the existing ones and insist that the change, addition, or
omission be made in the construction. However, if it is agreed that said change,
addition, or omission would make the Facility or any part thereof unsafe and
cannot be satisfactorily modified to eliminate the hazard to safety, the matter
shall be dropped. In order to be binding on COMPANY and CONTRACTOR, (x) every
Change Order, whether or not it increases or decreases the Budgeted Cost of the
Work or accelerates or delays the Project Schedule,
24
must be signed by two COMPANY Representatives who are expressly authorized to
approve all changes, additions or omissions, and (y) every Change Order that
increases or decreases the Budgeted Cost of the Work must be signed by the two
COMPANY Representatives referred to in Clause (x) of this sentence, and also by
----------
the single COMPANY Representative having express authority to approve increases
or decreases in the Budgeted Cost of the Work and (z) every Change Order,
whether or not it increases or decreases the Budgeted Cost of the Work or
accelerates or delays the Project Schedule, must be signed by CONTRACTOR'S
Representative. COMPANY shall negotiate in good faith all of CONTRACTOR'S
requests to change the Project Budget or the Project Schedule.
10.3 EFFECT OF CHANGE ORDER ON COST AND TIMING. Whenever either party
-----------------------------------------
proposes a change, addition, or omission which would make the Facility more or
less expensive than the construction required by the Contract, or would
accelerate or delay the milestones for substantial completion of one or more
Construction Phases set forth in the Project Schedule or accelerate or extend
the Latest Date For Substantial Completion Of The Facility (defined in Section
-------
14.1 below) or otherwise affect the critical path set forth in the Project
----
Schedule, CONTRACTOR shall thereupon submit a detailed estimate to COMPANY
showing what effect the proposed change, addition, or omission is estimated to
have on the cost of the Facility reflected in the Project Budget and on the time
for substantial completion and final completion of the Facility or any
Construction Phase reflected in the Project Schedule or otherwise have on the
critical path; and, if COMPANY does not concur therewith, the parties hereto
shall cooperate to develop an estimate on which both parties do agree. However,
it shall be understood that the aforesaid estimates are intended to be for
COMPANY'S use in considering the desirability of the proposed change, addition,
or omission and for use in determining the adjustment in CONTRACTOR'S Budgeted
Fee (defined in Section 16.3.1 below) on account thereof or in determining an
--------------
acceleration or extension of the Latest Date For Substantial Completion Of The
Facility or of the latest date by which the Facility shall be finally completed
(as set forth in Section 14.2) or a revision of the Project Schedule -- and for
-------------
such use only. If such change, addition, or omission is authorized by COMPANY
and actually incorporated in the construction, then: (x) all costs added or
eliminated thereby which are of the character of Reimbursable Costs shall be
added to or deducted from the Budgeted Cost of the Work (defined in Section
-------
16.3.1) set forth in the Project Budget, and any adjustment of CONTRACTOR'S
------
Budgeted Fee by reason of such changes, additions, or omissions shall be
effected by COMPANY and CONTRACTOR pursuant to Section 16.10 and shall be
-------------
subject to the provisions of this Contract relating thereto, and (y) any
acceleration or delay in the progress of the Construction Work that affects the
critical path as set forth in the Project Schedule shall be deducted from or
added to the Project Schedule, and any adjustment in the Latest Date For
Substantial Completion Of The Facility and the latest date by which the Facility
shall be finally completed shall be mutually agreed upon by COMPANY and
CONTRACTOR. Agreements as to the amount and nature (i.e., whether an increase
or a decrease) of the effect on the Budgeted Cost of the Work set forth in the
Project Budget or on the critical path set forth in the Project Schedule or the
Latest Date For Substantial Completion Of The Facility or the latest date by
which the Facility shall be finally completed shall be made when the change,
addition, or omission constituting the basis for the adjustment is under
consideration; and said agreements shall be confirmed in writing by COMPANY'S
Representatives and CONTRACTOR'S Representative when the change, addition, or
omission is authorized. A proposal for a change, addition, or omission shall be
accepted, rejected, or returned for correction within the time periods specified
in Article 5 for review and approval of Design Documents or such other time as
---------
the parties may mutually agree upon in any particular instance. No extension of
time shall be granted in connection with a change, addition or omission unless
the change, addition or omission affects the critical path or extends the amount
of time required to substantially complete or finally complete the Facility as
described in Section 14.3.
------------
25
10.4 NO EFFECT ON CONTRACTOR'S OTHER RESPONSIBILITIES. Unless expressly
------------------------------------------------
agreed to the contrary and confirmed in writing at the time when any change,
addition, or omission is authorized, it is understood that with respect to all
changes, additions and omissions in the Construction Work, and all modifications
in the design of the Facility or work thereon from that described in the final
Design Documents, Project Schedule and Project Budget, (i) any and all work and
materials required for said change or addition (or, in the case of an omission,
required to accomplish said omission) shall be subject to the same warranties
and guarantees as the balance of the work and materials covered by the Contract;
and (ii) all other obligations and responsibilities of CONTRACTOR with respect
to the construction originally planned shall be held to apply to the work and
materials required for, or to accomplish, said change, addition, or omission.
ARTICLE 11
INSPECTION AND TESTING DURING CONSTRUCTION
11.1 CONTRACTOR'S SHOP INSPECTIONS. CONTRACTOR shall inspect at its own
-----------------------------
shops or at the shops of subcontractors and vendors those materials for the
Facility that are designated in the Contract Documents to be tested by non-
destructive means pursuant to a testing plan that will be developed by COMPANY
and CONTRACTOR. CONTRACTOR shall insure that the testing plan is developed
prior to CONTRACTOR'S purchasing materials or equipment that would reasonably
require testing or entering into any subcontracts or purchase orders.
CONTRACTOR shall upon COMPANY'S request provide the test results to COMPANY.
CONTRACTOR shall also make necessary field inspections of materials after same
are delivered to the job site and while field fabrication operations are being
performed thereon.
11.2 MEASUREMENTS AND SUITABILITY. CONTRACTOR'S inspection shall in all
----------------------------
cases include making all necessary measurements and records for establishing the
suitability and soundness of the materials.
11.3 INSPECTION REPORTS. CONTRACTOR shall furnish COMPANY or COMPANY'S
------------------
Inspector (defined in Section 11.5 below) if one is appointed, six (6) copies
------------
each of (i) certified results of all tests, (ii) certificates of inspection, and
(iii) routine inspection reports for all materials which CONTRACTOR inspects.
These shall in each case be delivered to COMPANY or COMPANY'S Inspector as soon
as possible (preferably, within six (6) working days) after CONTRACTOR'S
inspection of the materials involved is made.
11.4 COMPANY'S INSPECTIONS. COMPANY shall have the right to inspect, at
---------------------
its own expense, any and all materials which CONTRACTOR furnishes and provides
for the Facility; and, at its election, may exercise said right either at
CONTRACTOR'S shops or, subject to Section 11.5 below, subcontractors' or
------------
vendors' shops or at the Site or both at CONTRACTOR'S shops or, subject to
Section 11.5 below, subcontractors' or vendors' shops and at the Site.
------------
CONTRACTOR shall, and shall require its subcontractors and vendors to, at all
times, provide COMPANY and COMPANY'S Inspector (defined in Section 11.5 below)
------------
with safe access to the Construction Work wherever it is in preparation or
progress, including maintenance of temporary and permanent access, and
CONTRACTOR shall, and shall require its subcontractors and vendors to, at all
times, furnish COMPANY'S Inspector sufficient, safe, and proper facilities for
the inspection of work that they perform and materials that they furnish; and
shall also furnish COMPANY'S Inspector with test reports, analyses, and the like
pertaining to the materials involved in the inspection not later than the times
when such work and materials are submitted to COMPANY'S Inspector for
inspection. CONTRACTOR shall furnish, without extra charge, the necessary test
pieces and samples, including facilities and labor for obtaining the same, as
detailed in the specifications. When required, CONTRACTOR shall furnish
certificates of tests of materials made at the point
26
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
the right to give COMPANY'S Inspector 24-hours notice of such failure in
accordance with Section 14.4.4.
--------------
11.7 TESTING. CONTRACTOR shall make or cause to be made all chemical,
-------
physical, hydrostatic, air, structural, magnetic, radiographic, welders'
qualifications, and other tests required by the Contract Documents or by
specifications approved by COMPANY which apply to the Facility, in accordance
with approved Design Documents and other Contract Documents. In addition, if
any question shall arise as to the acceptability of any materials for the
Facility from the standpoint of safety or mechanical integrity, CONTRACTOR shall
make such additional tests as are necessary for determining the acceptability of
said materials.
ARTICLE 12
PROGRESS REPORTS AND PROGRESS MONITORING
12.1 PROGRESS SCHEDULES. CONTRACTOR shall furnish COMPANY periodic
------------------
progress schedules (at the frequency described in Section 12.2 below) showing
------------
Critical Path Method logic and updating the information contained in the Project
Schedule to show the respective dates upon which CONTRACTOR proposes to commence
and complete engineering, drafting, purchasing, and construction on each
Construction Phase. Each Construction Phase will be defined to reflect the
logical activities required to execute the work. This definition shall be in
sufficient detail to allow monitoring of progress on a daily basis. Each
schedule will be developed reflecting a planned logical approach which will
identify critical path, near term activities in detail, and activities that are
farther out on the schedule in broader terms, if they cannot be completely
defined. As the work progresses, the schedules will be continuously refined, on
a monthly basis, to define detailed short interval activities planned for the
next twelve week period. Each schedule activity or line item will be identified
by CONTRACTOR or the responsible subcontractor, along with the estimate of the
quantity of units of work to be accomplished or installed, man hours planned per
unit, and scheduled progress anticipated on each of said items in order to
complete the entire Facility within the contract time in accordance with the
Project Schedule. Each schedule activity or line item will be identified as a
direct work or indirect work activity and have the required resources, material,
and labor costs associated with the activity identified separately.
12.2 DELIVERY OF SCHEDULES TO COMPANY. The schedules described in Section
-------------------------------- -------
12.1 shall be made available to COMPANY as soon as practical.
----
12.3 PERIODIC PROGRESS REPORTS. Subsequent to the release of the schedules
-------------------------
referred to in Section 12.1 above, CONTRACTOR shall furnish COMPANY monthly
------------
progress reports in a form satisfactory to COMPANY. Progress reports will
update progress schedules and will indicate actual man hours expended by
activity and show the work units or man hours of progress earned in relation to
the planned total amount of work or man hours in each of the various
subdivisions shown in said schedules which CONTRACTOR and its subcontractors
have completed up to the last day of each reporting period. The monthly
progress reports will indicate actual progress accomplished during the month.
The beginning and cut off dates of the monthly progress reports will be the same
dates as used for CONTRACTOR'S monthly progress billing and as used for the
Project Cost Report referred to in Section 13.1 below. COMPANY shall have the
------------
right to require CONTRACTOR to submit simplified interim progress reports on a
weekly or bi-weekly basis in such other format or formats as COMPANY may
require. Additionally, CONTRACTOR shall give COMPANY interim notice of all
significant changes in the progress of the work.
12.4 SUPERINTENDENT'S REPORT. CONTRACTOR shall furnish COMPANY, by mid-day
-----------------------
of the first working day following the last day worked, a copy of CONTRACTOR'S
senior Project construction superintendent's daily works report
28
and the Project engineer's works report, showing the total number of men engaged
by CONTRACTOR and the subcontractors under the Contract at the job site or in
the engineering office during such last day worked, itemized by crafts or work
classifications.
12.5 MATERIALS STATUS REPORTS. In addition to the purchasing progress
------------------------
reports which are furnished by CONTRACTOR, CONTRACTOR shall furnish COMPANY,
currently as issued, copies of all Materials Status Reports that it prepares
covering materials for the Facility.
ARTICLE 13
ACCOUNTS AND RECORDS
13.1 DETAILED ACCOUNTS. CONTRACTOR shall keep full and detailed accounts
-----------------
and records and exercise such controls as may be necessary for proper financial
management under this Agreement. The accounting and control systems shall be
satisfactory to COMPANY. A monthly Project Cost Report will be issued by
CONTRACTOR with beginning and cut off dates that are the same as the monthly
progress report referred to in Section 12.3 above.
------------
13.2 SEMATECH MODEL. Accounts will be maintained in such detail as to
--------------
comply with and directly relate to the SEMATECH Facilities Cost Model, current
as of the date of this Agreement. The accounts will also be maintained to
directly relate to the schedule activities required in Article 12 above.
----------
13.3 TAX ACCOUNTING. All value added taxes, sales taxes, use taxes, excise
--------------
taxes and other taxes charged to COMPANY'S account shall be separately stated
and broken out as separate line items on all invoices, Applications For Payment
and accounting reports. CONTRACTOR shall require all subcontractors and vendors
to comply with this requirement.
13.4 AUDIT BY COMPANY. The COMPANY, and any Person retained by COMPANY to
----------------
act as one of the COMPANY'S Representatives and COMPANY'S accountants shall have
the right at any time, including without limitation following final payment to
CONTRACTOR, to audit the books and records of CONTRACTOR, and of all
subcontractors and vendors with whom CONTRACTOR has entered into a subcontract
or purchase order on a cost reimbursable basis, and shall be afforded access to
CONTRACTOR'S records, books, correspondence, instructions, drawings, receipts,
subcontracts, purchase orders, vouchers, memoranda, and other data relating to
this Agreement and to the Project, and CONTRACTOR shall preserve these for a
period of three years after final payment, or for such longer period as may be
required by tax law. In the event COMPANY conducts an audit of CONTRACTOR'S
Project cost accounting information, and such audit reveals that CONTRACTOR has
billed COMPANY on any one billing an amount which exceeds the actual amount
which CONTRACTOR should have billed COMPANY on such billing, by five percent
(5%) or more of the amount Contractor should have billed COMPANY, then
CONTRACTOR shall be responsible for reimbursing COMPANY for the cost of the
audit. In other events, COMPANY shall be responsible for the cost of the audit.
In all events, CONTRACTOR shall be responsible for reimbursing COMPANY for any
overpayment, regardless of the amount of the overpayment. In the event that the
audit reveals that CONTRACTOR has under-billed COMPANY, COMPANY shall reimburse
CONTRACTOR for the amount under-billed.
13.5 AUDIT OF SUBCONTRACTORS AND VENDORS. CONTRACTOR shall provide in each
-----------------------------------
subcontract entered into with a subcontractor and in each purchase order entered
into with a vendor on a cost reimbursable, service or unit price basis the right
for COMPANY or COMPANY'S Representatives to audit all books, records, accounts
and other data relating to Reimbursable Costs or to work of any kind done by the
subcontractor or materials provided by the vendor in respect of the Project.
CONTRACTOR will not enter into any subcontract or
29
purchase order on a cost reimbursable basis which does not contain this right to
audit.
ARTICLE 14
TIME OF COMPLETION
14.1 SUBSTANTIAL COMPLETION DATE. The Project Schedule shall set forth
---------------------------
milestone dates which shall be the dates that the parties determine shall be the
dates by which the Facility and each Construction Phase and other aspects of the
Project shall be substantially completed as described in Section 15.1. The
------------
latest date for substantial completion of the Facility (excluding substantial
completion of the Site Development Construction Phase) shall be 15 May, 1998, as
adjusted pursuant to the provisions of this Agreement (the "LATEST DATE FOR
SUBSTANTIAL COMPLETION OF THE FACILITY"). CONTRACTOR shall prosecute all phases
of the work to be performed hereunder with all possible promptness and diligence
and shall use its best efforts to substantially complete the entire Facility and
each Construction Phase on or ahead of the Project Schedule, but CONTRACTOR
shall substantially complete the Facility not later than the Latest Date For
Substantial Completion Of The Facility. The Latest Date For Substantial
Completion Of The Facility may be extended only for COMPANY'S delay or for force
-----
majeure pursuant to Section 14.3 or for changes, additions or omissions in the
------- ------------
Project pursuant to Section 10.3 and Section 14.3.
------------ ------------
14.2 LATEST DATE FOR FINAL COMPLETION. The Project Schedule shall set
--------------------------------
forth the date upon which the Facility shall be finally completed (as described
in Section 15.2.1). As of the date of this Agreement, the latest date by which
--------------
the Facility shall be finally completed shall be June 15, 1998.
14.3 DELAYS AND EXTENSIONS OF TIME.
-----------------------------
14.3.1 DELAYS CAUSED BY CHANGE ORDER OR BY COMPANY OR BY FORCE MAJEURE.
---------------------------------------------------------------
If any change, addition or omission would affect the critical path set forth in
the Project Schedule or extend the amount of time required to substantially
complete or finally complete the Facility, the effect on the Project Schedule
and on the Latest Date For Substantial Completion Of The Facility and on the
latest date by which the Facility shall be finally completed as set forth in
Section 14.2 shall be acknowledged in writing and incorporated into the Project
------------
Schedule by approved Change Order in accordance with Section 10.3 above. If
------------
CONTRACTOR is delayed in the progress of the Construction Work by any act or
neglect of COMPANY, including any delay by COMPANY in commenting upon or
approving Design Documents or in granting or denying its consent or approval,
and such delay would affect the critical path, CONTRACTOR shall, within 72 hours
of the start of the occurrence, give notice to COMPANY of the cause of the
potential delay, the reasons why the delay will affect the critical path set
forth in the Project Schedule and an estimate of the duration of the delay and
the possible time extension involved. Within seven (7) working days after the
cause of delay has been remedied, in the case of a delay caused by COMPANY'S act
or neglect, CONTRACTOR shall give notice to COMPANY of any actual time extension
requested as a result of the aforementioned occurrence and any additional costs
incurred as a result of such delay. The corresponding change in the Project
Schedule shall be implemented by an approved Change Order pursuant to Section
-------
10.3 above. Failure to give either of the above notices shall be sufficient
----
ground for denial of an extension of time hereunder on account of any act or
neglect of COMPANY. If CONTRACTOR is delayed in the progress of the
Construction Work by force majeure, and such delay would affect the critical
path, CONTRACTOR shall, within 72 hours of the start of the occurrence, give
notice to COMPANY of the cause of the potential delay, the reasons why the delay
will affect the critical path set forth in the Project Schedule and an estimate
of the duration of the delay. Within seven (7) working days after the cause of
delay has been remedied, in the case of a delay caused by force majeure,
CONTRACTOR
30
shall prepare a Schedule Recovery Plan for COMPANY'S approval to recover the
time lost as a result of such force majeure for COMPANY'S approval. If COMPANY
approves such Schedule Recovery Plan, COMPANY shall pay the additional
Reimbursable Costs incurred in carrying out such Schedule Recovery Plan, and the
Budgeted Cost of the Work shall be increased by the amount of such additional
Reimbursable Costs.
14.3.2 STANDARD FOR APPROVING EXTENSIONS OF TIME. No extension of time
-----------------------------------------
shall be granted to CONTRACTOR for delays that do not affect the critical path
set forth in the Project Schedule nor for delays caused by CONTRACTOR'S
mismanagement or caused by the willful act or neglect of CONTRACTOR, its
subcontractors or vendors or any of their respective officers, agents or
employees. Changes in the Project Schedule shall be effected only by approved
Change Order in accordance with Section 10.3 above.
------------
14.4 DELAYS AND ADDITIONAL COSTS.
---------------------------
14.4.1 ADDITIONAL COSTS CAUSED BY COMPANY'S DELAY OR BY FORCE MAJEURE.
--------------------------------------------------------------
COMPANY shall pay additional Reimbursable Costs incurred by CONTRACTOR and
caused by COMPANY'S delay only if COMPANY'S delay affects the critical path set
forth in the then current Project Schedule. The Budgeted Cost of the Work shall
not be adjusted for any delay caused by COMPANY except in accordance with
Section 14.4.2. COMPANY shall pay additional Reimbursable Costs incurred by
--------------
CONTRACTOR and caused by force majeure except to the extent that the delay
resulting from the force majeure event is caused by CONTRACTOR, any
subcontractor or vendor or any of their respective agents or representatives.
The Budgeted Cost of the Work shall be increased by the amount of additional
Reimbursable Costs incurred for any delay caused by force majeure, except to the
extent that the delay resulting from the force majeure event is caused by
CONTRACTOR, any subcontractor or vendor or any of their respective officers,
agents, representatives or employees.
14.4.2 NOTICE OF CLAIM FOR DELAY. If CONTRACTOR intends to file a claim
-------------------------
for an increase in the Budgeted Cost of the Work for a delay caused by COMPANY
that affects the critical path, CONTRACTOR shall file a notice of claim with
COMPANY within seven (7) working days of the beginning of the occurrence or
event giving rise to such delay. The notice of claim shall be in duplicate, in
writing, shall state the circumstances and the reasons for the claim, and shall
provide a Rough Order of Magnitude ("ROM") for the amount of the claim. No
claim for an increase in the Budgeted Cost of the Work will be considered unless
the notices from CONTRACTOR required by Section 14.3 have been delivered, and a
------------
notice of claim has been filed with COMPANY in writing. CONTRACTOR and COMPANY
shall act reasonably in presenting and satisfying any such claim. Any increase
in the Budgeted Cost of the Work shall be implemented by an approved Change
Order.
14.4.3 LIMITATION ON COSTS. In no event shall CONTRACTOR be entitled to
-------------------
collect or recover any costs, damages, losses, or expenses incurred by reason of
any delay other than delay caused by COMPANY in accordance with this Section
-------
14.4 or as agreed upon by COMPANY and CONTRACTOR pursuant to Section 10.3.
---- ------------
14.4.4 DELAYS BY COMPANY IN GRANTING APPROVALS. In the event COMPANY
---------------------------------------
fails to respond to any Design Documents within the time period prescribed by
Section 5.6.2 or delays in granting or denying its approval beyond the time
-------------
period prescribed by Section 9.2 or COMPANY'S Inspector fails to approve or
-----------
disapprove inspected materials within the time period prescribed by Section 11.6
------------
or COMPANY otherwise fails to grant or deny its consent or fails to approve or
disapprove within any other time period prescribed by this Agreement, then (i)
CONTRACTOR shall have the right to give COMPANY'S Representative (or COMPANY'S
Inspector where COMPANY'S Inspector has caused
31
the delay) 24-hours notice of such failure, and (ii) if COMPANY'S failure
continues beyond one working day after receipt of said 24-hour notice, (a)
COMPANY shall pay all additional costs incurred by CONTRACTOR as a result of
COMPANY'S delay if (but only if) COMPANY'S delay affected the critical path set
forth in the Project Schedule and the Budgeted Cost of the Work set forth in the
then current Project Budget shall be adjusted, and (b) if COMPANY'S delay
affects the critical path set forth in the then current Project Schedule,
CONTRACTOR shall obtain an extension of the then current Project Schedule
pursuant to Section 14.3 above.
------------
ARTICLE 15
SUBSTANTIAL COMPLETION, FINAL COMPLETION AND FINAL ACCEPTANCE
15.1 SUBSTANTIAL COMPLETION. The Facility or a system within the Facility
----------------------
shall be substantially complete when (i) construction of the Facility or of such
system shall have been sufficiently completed in accordance with the Contract
Documents and temporary occupancy permits have been issued, so COMPANY can
occupy or utilize the Facility or such system for the use for which it is
intended, (ii) all Construction Work (including Punch List items as described in
Section 15.2.1, other than minor cosmetic matters which do not require the shut
--------------
down of any system to correct) shall have been completed in accordance with the
Contract Documents, (iii) CONTRACTOR shall have fully performed its obligations
under Article 24 hereof, and (iv) the System Performance Test (as defined in
----------
Article 25) for such system shall have been completed pursuant to Article 25.
---------- ----------
CONTRACTOR shall give COMPANY written notice at least sixty (60) days prior to
the dates when each system and each Construction Phase within the Facility and
when the entire Facility shall have been substantially completed, except for
conducting the System Performance Test for such system, and COMPANY'S
Representative or Inspector shall inspect the Construction Work. If COMPANY'S
Inspector confirms that the system within the Facility is ready for the System
Performance Test, then the parties shall prepare for and conduct the System
Performance Test. Substantial completion of any system within the Facility
shall not have occurred until after completion of the System Performance Test
for such system and after CONTRACTOR shall have fulfilled all of its obligations
with respect to the System Performance Test for such system. COMPANY agrees to
start the System Performance Test for each system within a reasonable period of
time after CONTRACTOR turns such system over to COMPANY for testing, except that
if COMPANY is prevented from doing so by any cause or causes for which
CONTRACTOR is responsible, then said reasonable period of time shall be extended
by such period of time as is attributable to such cause or causes. Substantial
completion of the Facility shall not have occurred until after completion of the
System Performance Tests for all systems constituting the Facility and after
CONTRACTOR shall have fulfilled all of its obligations with respect to the
System Performance Tests for all systems constituting the Facility.
15.2 Final Completion.
----------------
15.2.1 COMPLETION OF PUNCH LIST ITEMS. Following substantial
------------------------------
completion of each system within the Facility and of all of the Construction
Work under this Contract, including without limitation, completion of the System
Performance Tests, CONTRACTOR shall notify COMPANY, in writing, that it has
substantially completed each system or the Facility and shall request final
inspection of such system or of the Facility. Upon receipt of CONTRACTOR'S
request for a final inspection, CONTRACTOR and COMPANY will inspect such system
or the Facility and prepare a list of items not completed or needing repair or
replacement (the "PUNCH LIST"). CONTRACTOR will correct the deficient
Construction Work on the Punch List. This Punch List may not be exhaustive and
the failure to include an item on it does not relieve CONTRACTOR of the
responsibility to complete all of the Construction Work in accordance with the
Contract Documents. CONTRACTOR shall notify COMPANY in writing when all items on
the Punch List have been completed. If, after
32
COMPANY'S inspection of the Punch List items, it is found that CONTRACTOR has
not completed all of the items listed, or other Construction Work not listed is
found to be deficient, COMPANY shall prepare a further Punch List and submit to
CONTRACTOR. This list may not be exhaustive and the failure to include an item
on it does not relieve CONTRACTOR of the responsibility to complete all of the
Construction Work in accordance with the Contract. If, after inspection of the
further Punch List items, it is found that CONTRACTOR has not completed all of
the items listed, or other Construction Work not listed is found to be
deficient, the cost of all further inspections required by COMPANY to determine
if the Construction Work has been completed in accordance with the Design
Documents and authorized Change Orders will be charged to CONTRACTOR. Punch
List items that could not lead to malfunction of a system or could not limit any
of such system's functions or could not affect COMPANY'S continuous use of such
system shall not delay COMPANY'S acceptance of such system. COMPANY may have
the beneficial or partial use of a system prior to substantial completion and
acceptance of such system due to Punch List items that affect the system's
functions or the system's ability to meet specifications or Facility criteria,
but such beneficial or partial use shall not relieve CONTRACTOR of its
obligation to correct or complete such Punch List items, shall not trigger the
Warranty Commencement Date (defined in Section 18.1) applicable to such system
------------
and shall not constitute acceptance of such system.
15.2.2 CONTRACTOR'S CERTIFICATION OF COMPLETION OF CONSTRUCTION WORK.
-------------------------------------------------------------
When CONTRACTOR has completed all of the Construction Work, including the items
of the Punch List(s), on each system or on the Facility, CONTRACTOR shall
certify to COMPANY (i) that such Construction Work has been completed in
accordance with the approved Design Documents and (ii) that all materials and
workmanship are in accordance with the Design Documents. If COMPANY'S
Representative or Inspector agrees with CONTRACTOR'S certification, then such
Construction Work shall be deemed to have been completed. If COMPANY'S
Representative or Inspector disagrees, COMPANY'S Representative or Inspector
shall identify the matters that have not yet been completed, and CONTRACTOR
shall complete such matters. When CONTRACTOR has completed such Construction
Work to COMPANY'S satisfaction, then such Construction Work shall be deemed to
have been completed.
15.2.3 CONDITIONS CONSTITUTING FINAL COMPLETION. The Facility shall
----------------------------------------
be finally complete when (i) CONTRACTOR shall have completed the Construction
Work as described in Section 15.2.1 above, (ii) CONTRACTOR shall have certified
--------------
such completion as described in Section 15.2.2 above and COMPANY'S Inspector
--------------
shall have determined in accordance with Section 15.2.2 that all of the
--------------
Construction Work (including Punch List items) to be performed in connection
with the Facility has been performed to the satisfaction of COMPANY'S Inspector,
(iii) the construction of the Facility shall have been completed free of liens
and free of retention of title to any materials, and (iv) the Facility is
undamaged and has been available for regular use and occupancy. The date upon
which such matters have been completed to COMPANY'S satisfaction shall be the
"FINAL COMPLETION DATE". The parties shall enter into a written memorandum
memorializing the Final Completion Date. It is understood that COMPANY'S Final
Acceptance of the Facility pursuant to Section 15.3 hereof shall occur after the
------------
Final Completion Date.
15.3 FINAL ACCEPTANCE AND FINAL PAYMENT.
----------------------------------
15.3.1 FINAL ACCEPTANCE BY COMPANY. When all of the conditions
---------------------------
hereinafter set forth in this Section 15.3.1 shall have been fulfilled, COMPANY
--------------
shall give CONTRACTOR its final acceptance of the Facility (the "FINAL
ACCEPTANCE") in writing. The aforesaid Final Acceptance shall be contingent
upon the following conditions: (i) the Final Completion Date shall have
33
occurred; (ii) CONTRACTOR shall have delivered to COMPANY all documents required
by Article 27, Article 28 and Article 29; and (iii) CONTRACTOR has performed all
---------- ---------- ----------
other tasks, furnished all other materials, if any, and rendered all services
required of it by the Contract, but excluding those tasks, materials, or
services necessary for the correction (in compliance with the provisions of
Article 18 hereof) of imperfections or other unsatisfactory qualities which may
----------
be discovered after the date of Final Completion. Final Acceptance of the
Facility by COMPANY shall in no way relieve CONTRACTOR of any obligations under
the Contract which extend beyond the date of Final Acceptance.
15.3.2 FINAL PAYMENT. Following Final Acceptance, CONTRACTOR shall
-------------
submit its final Application for Payment. COMPANY shall make the final payment
after COMPANY has reviewed and approved the final Application for Payment.
Payment of the Retainage and the unpaid portion of the increases in the Fee
shall be made thirty (30) calendar days following receipt of the final
Application for Payment if the final Application for Payment satisfies all
prerequisites for payment pursuant to Section 17.5.
------------
15.4 RELEASE OF COMPANY. The acceptance by CONTRACTOR of the final payment
------------------
shall release COMPANY from all claims and all liability to CONTRACTOR for all
things done or furnished in connection with the Project, and every act of
COMPANY and others relating to or arising out of Project. No payment, however,
final or otherwise, shall operate to release CONTRACTOR from obligations under
this Contract, including without limitation, subsequent audits, and warranties
and guarantees, as herein provided.
ARTICLE 16
COST OF THE WORK
16.1 BASIS OF FEE. COMPANY shall pay CONTRACTOR for CONTRACTOR'S
------------
performance of the Contract an amount (the "CONTRACT AMOUNT") consisting of (i)
the CONTRACTOR'S Fee described in Section 16.3 below plus (ii) the actual and
------------
reasonable and documented costs necessarily incurred by CONTRACTOR in the
performance of the Contract, including performance of Pre-Contract design
services, as detailed in Section 16.2 below (the "REIMBURSABLE COSTS"), plus
------------
(iii) all value added taxes due upon (i) and (ii) above.
16.2 REIMBURSABLE COSTS. Subject to (i) the understanding that
------------------
reimbursement for any cost or expense or payment of any charge under the
provisions of any one of the items herein below enumerated shall preclude
reimbursement of such cost or expense or payment of such charge under the
provisions of any other of said items, and (ii) the principles set forth in
Section 16.2.4, COMPANY shall reimburse CONTRACTOR for the following items, all
--------------
of which shall be subject to COMPANY'S rights of audit:
16.2.1 OFFICE COSTS.
------------
16.2.1.1 HOME OFFICE WAGES AND SALARIES. Reimbursement for the
------------------------------
services performed hereunder by CONTRACTOR'S permanent employees in CONTRACTOR'S
home office Engineering, Purchasing, Construction, and Estimating Departments
for the time actually and necessarily expended in performing the work hereunder
in CONTRACTOR'S home offices for the time such employees are directly engaged in
the work hereunder including time spent by said employees at the job site or on
trips in connection with the work hereunder will be at the hourly rates
established for the job classification for the service such employees are
providing as set forth in Schedule 16.2.1.1 attached hereto and made a part
-----------------
hereof, as said Schedule is revised from time to time, but as to those employees
who are members of an organized collective bargaining unit, shall not exceed the
level of wages collectively bargained for in the area in which the work is being
performed. These hourly rates were calculated for each job
34
classification using the weighted average actual hourly salary and social
benefits costs of all employees assigned to the work hereunder within each job
classification, and the application of an overhead rate to this weighted actual
hourly salary and social benefits cost. The method followed in calculating this
overhead rate is included herein as an addendum to Schedule 16.2.1.1. The
-----------------
initial hourly rates and job classifications and all revisions of Schedule
--------
16.2.1.1 shall be based on CONTRACTOR'S current salary schedules and job
--------
classifications and shall in each instance be approved by COMPANY before
establishing or revising Schedule 16.2.1.1. COMPANY shall have the right to
-----------------
audit such of CONTRACTOR'S books and records as may be reasonably necessary to
enable COMPANY to approve such salary schedules and job classifications.
Included as part of the hourly rates set forth in Schedule 16.2.1.1 are amounts
-----------------
paid by CONTRACTOR for sick leave, vacation and holiday pay, CONTRACTOR'S
contributions to its employee pension and medical hospitalization plans, if any,
and any other statutory social security expenditure such as employer's
contribution to social insurance and unemployment insurance as well as social
expenditure on the basis of collective bargaining agreements. Also included in
the hourly rates are all overhead costs provided for in Clause 16.2.1.4 (Prints
---------------
and Reproductions), Clause 16.2.1.6 (Shipping And Providing Offices), Clause
--------------- ------
16.2.1.7 (Communications), (Clause 16.2.1.8 (Indirect Overhead) and Clause
-------- --------------- ------
16.2.1.10 (Other Direct Home Office Costs). The standard work week schedule at
---------
CONTRACTOR'S home office is eight (8) hours per day, forty (40) hours per week.
COMPANY shall reimburse CONTRACTOR for those employees who are paid on an hourly
basis, where applicable, for all hours worked over forty (40) hours per week on
a scheduled overtime basis per Schedule 16.2.1.1. Furthermore, CONTRACTOR shall
-----------------
be reimbursed at the applicable hourly rate for all scheduled overtime hours
worked by CONTRACTOR'S salaried employees on the work hereunder but only if
those employees customarily receive overtime payments. Any additional overtime
shall be subject to COMPANY'S prior approval. It is understood that if
established rates for overtime are not available for any of CONTRACTOR'S
employees, the wages or salaries which are paid to employees therefor shall be
subject to COMPANY'S prior written approval.
16.2.1.2 HOME OFFICE TRAVEL. The actual and reasonable amounts paid
------------------
by CONTRACTOR for traveling and living expenses to employees whose salaries and
wages are chargeable to COMPANY under the provisions of Clause 16.2.1.1 above,
---------------
for trips made in connection with the work hereunder-- it being understood that
(i) payment of such traveling and living expenses shall be in accordance with
CONTRACTOR'S travel reimbursement policies, which are detailed on Schedule
--------
16.2.1.1 attached hereto, and which shall in all cases be consistent with
--------
COMPANY'S policies on travel and on traveling and living expenses and said
expenses shall be approved by the senior Project construction superintendent or
his designee in CONTRACTOR'S organization before being billed to COMPANY, (ii)
in those cases where an employee divides his time between this and other jobs,
the aforesaid expenses for the period involved shall be prorated to the
respective jobs on the basis of the number of such employee's working hours
properly chargeable to each job, and this job shall be charged only its proper
share of such expenses, and (iii) all such trips shall be subject to COMPANY'S
prior written approval. The traveling and living expenses for any individual or
classification of employee shall in no event exceed the corresponding amounts
authorized by COMPANY'S policy for individuals or classifications of employees
at the same or an equivalent level. If any expense of CONTRACTOR at any time
exceeds COMPANY'S authorized amount, the expense of CONTRACTOR shall be
retroactively reduced to an amount not exceeding COMPANY'S authorized amount.
16.2.1.3 CONSULTANTS. The actual and reasonable amounts paid by
-----------
35
CONTRACTOR to outside consultants and/or temporary employees for services
furnished by them on the work hereunder, with COMPANY'S prior written approval.
16.2.1.4 PRINTS AND REPRODUCTIONS. Charges for direct prints and
------------------------
reproductions produced in CONTRACTOR'S home office for the work hereunder are
included in the hourly rates set forth in Schedule 16.2.1.1.
-----------------
16.2.1.5 MODEL. Actual and reasonable out-of-pocket costs to
-----
CONTRACTOR for supplies and materials necessary to construct a model of the
Facility, if such a model is authorized by COMPANY.
16.2.1.6 SHIPPING AND PROVIDING OFFICES. Out-of-pocket costs to
------------------------------
CONTRACTOR for shipping drawings, specifications, and the like in connection
with the work hereunder, as well as CONTRACTOR'S out-of-pocket costs for
CONTRACTOR providing office services and facilities for COMPANY'S employees in
residence in CONTRACTOR'S home office are included in the hourly rates set forth
in Schedule 16.2.1.1.
-----------------
16.2.1.7 COMMUNICATIONS. Out-of-pocket costs for (i) postage
--------------
charges, (ii) home office stationery and equipment, and (iii) telephone and
facsimile charges are included in the hourly rates set forth in Schedule
--------
16.2.1.1.
--------
16.2.1.8 INDIRECT OVERHEAD. CONTRACTOR'S indirect home office and
-----------------
overhead costs are included in the overhead rate used to establish the hourly
rates set forth in Schedule 16.2.1.1. The Addendum to Schedule 16.2.1.1 sets
----------------- -----------------
forth the method used to calculate the overhead rate. Foreign branch office
selling expenses are excluded from this calculation. These costs include, but
not by way of limitation, (i) costs of office rent, furniture, light, heat, and
depreciation, and (ii) wages and salaries of CONTRACTOR'S executive management
personnel, sales personnel, janitors, messengers and other personnel, having job
classifications other than those included in Schedule 16.2.1.1.
-----------------
16.2.1.9 FEES, PREMIUMS, LEGAL COSTS, PROTECTIVE WORK. The actual
--------------------------------------------
and reasonable out-of-pocket costs incurred for: (i) premiums for insurance and
bonds required under the Contract; (ii) fees and assessments for the building
permit and for other permits, licenses and inspections for which CONTRACTOR is
required by the Contract Documents to pay; (iii) fees of testing laboratories
for tests required by the Contract Documents, except those related to defective
or non-conforming work; (iv) royalties and license fees approved in writing by
COMPANY and paid for the use of a particular design, process or product required
by the Contract Documents; and (v) taking action to prevent threatened damage,
injury or loss in case of an emergency affecting the safety of persons and
property, as provided in the Contract.
16.2.1.10 OTHER DIRECT HOME OFFICE COSTS. The out-of-pocket amounts
------------------------------
paid by CONTRACTOR for such other direct home office costs necessarily incurred
in the performance of the work hereunder but not specifically mentioned above
are included in the hourly rates set forth in Schedule 16.2.1.1.
-----------------
16.2.1.11 LIMITS ON OVERTIME PAY. Overtime premium pay which is not
----------------------
a result of CONTRACTOR'S failure to meet the Project Schedule shall be
considered as a valid cost to be reimbursed under Article 16 if CONTRACTOR has
----------
received COMPANY'S prior written approval to incur such overtime. Such approval
shall specify a maximum number of overtime hours CONTRACTOR shall be allowed to
incur before additional approval is required.
36
16.2.2 FIELD COSTS.
-----------
16.2.2.1 MATERIALS. The actual and reasonable amounts paid by
---------
CONTRACTOR to vendors for materials furnished by CONTRACTOR which enter directly
into the construction of the Facility or which are furnished for construction
but are left over as surplus on COMPANY'S premises when construction is
completed (excluding the cost of surplus remaining from unreasonably large
orders and excluding the cost of surplus ordered in bulk), and including such
materials as may be furnished by CONTRACTOR as accessories or spare parts for
use with, or maintenance of, the completed Facility. Also, the actual and
reasonable cost for materials manufactured or fabricated by CONTRACTOR in its
shops and furnished for the Facility. Surplus material will be disposed of
according to Section 16.8.
------------
16.2.2.2 CONSTRUCTION EQUIPMENT AND TOOLS EXCLUSIVE TO THE SITE. The
------------------------------------------------------
actual and reasonable cost to CONTRACTOR of all construction equipment and tools
(but not small tools, i.e., those having a value when new of less then DEM800)
----
and other items in CONTRACTOR'S construction outfit which are purchased by
CONTRACTOR for use exclusively at the Site for or in connection with the
construction of the Facility and that are not usable in the construction of
other plants and facilities but not to exceed the reasonable value of such
equipment and tools. CONTRACTOR shall not purchase any such construction
equipment and tools until CONTRACTOR has obtained COMPANY'S written consent.
Such items purchased by CONTRACTOR shall become COMPANY'S property when
construction is completed.
16.2.2.3 CONSTRUCTION EQUIPMENT AND TOOLS NOT EXCLUSIVE TO THE SITE.
----------------------------------------------------------
Rental charges on construction equipment and tools (but not small tools) and
other items in CONTRACTOR'S construction outfit that are owned by CONTRACTOR and
furnished for the job in first-class working condition, computed on the basis of
rental rates mutually agreed upon before the items involved are furnished, but
in no event more than the then prevailing rates in the general area of the Site
for such items. Upon reaching agreement on such rental rates, the parties shall
set forth such rental rates in a schedule and attach that schedule to this
Agreement as Schedule 16.2.2.3. Whenever such rental rates are revised, the
-----------------
parties shall revise Schedule 16.2.2.3 and attach such revised schedule to this
-----------------
Agreement. The rental term of any such item owned by CONTRACTOR shall commence
when said item is shipped to the Site and shall terminate when said item is
shipped away from the Site or at such time as the item is no longer needed or
necessarily kept at the Site for the proper and economical prosecution of the
job, except that the periods when the item is out of use for making major
overhauls or major repairs shall not be included in such rental term. If the
rental rates exclude the costs of minor repairs, then COMPANY will reimburse
CONTRACTOR for the actual and reasonable amounts paid by CONTRACTOR for minor
repairs to, and minor repair parts for, any such construction equipment and
tools owned by CONTRACTOR as shall be made necessary during the rental term of
said equipment on this job (such as routine replacement of spark plugs,
distributor points, oil filters, or other parts), but CONTRACTOR shall bear all
costs for major repairs to, and major repair parts for said items (such as
replacement of the generator or alternator on an automotive vehicle, an engine
overhaul, replacement of tractor treads, or other equipment reconditioning).
CONTRACTOR shall not furnish any of the aforesaid items owned by it on a rental
basis without having secured COMPANY'S prior written approval in each instance
and CONTRACTOR shall also keep COMPANY advised as to when each such item of
rented construction equipment and tools used on the Construction Work is not in
usable condition or is no longer required for the job, and the
37
dates on which rental charges begin and end. Also, the actual and reasonable
rentals paid by CONTRACTOR to others for such construction equipment and tools
for the time said items are actually used or necessarily maintained at the job
site for the prosecution of the work hereunder, but in no event more than the
then prevailing rates in the general area of the Site for such items, including
in the case of such construction equipment and tools which are rented from
others on a "bare rental" basis, the actual and reasonable amounts necessarily
paid by CONTRACTOR for repairs to, and repair parts for, said construction
equipment and tools as shall be necessary to keep and maintain them in good
working order during the period of their use on the job, provided such items are
delivered to the Site in first-class working condition. If the total projected
or actual rental costs for a given item are equal to or greater than seventy-
five percent (75%) of the purchase cost of such item in its then present
condition, CONTRACTOR shall extend to COMPANY the opportunity to purchase such
item in lieu of rental.
16.2.2.4 BASIS FOR FURNISHING CONSTRUCTION OUTFIT. CONTRACTOR shall
----------------------------------------
recommend to COMPANY from time to time the basis upon which the various items in
the construction outfit are to be furnished, (i.e., whether purchased outright,
furnished by CONTRACTOR on a rental basis, or rented from a third party), and
COMPANY shall, in each case, be privileged to choose the basis most advantageous
to it under the prevailing circumstances.
16.2.2.5 TEMPORARY STRUCTURES. The actual and reasonable cost to
--------------------
CONTRACTOR of procuring, constructing, moving, maintaining and operating
buildings, structures, and facilities erected at the Site by or on behalf of
CONTRACTOR and required for the storage and protection of materials and
construction equipment and tools, for the field office, or for other purposes in
connection with the work at the job site, including all temporary structures,
such as, but not limited to, scaffolding, forms, cribbing, temporary supports,
and other items of indirect materials required for the job but excluding
temporary living quarters for foreign workers.
16.2.2.6 SUPPLIES. The actual and reasonable cost to CONTRACTOR of
--------
construction supplies (other than those included under Clause 16.2.2.5 above)
---------------------
and utilities, gasoline, oil, and grease used at and around the Site for the
Construction Work and testing, and the cost of fire-fighting facilities
furnished by CONTRACTOR and required for the protection of the Construction Work
during the course of construction, including any items of the kinds covered in
this Clause 16.2.2.6 that are left over at the Site as surplus when construction
---------------
is complete.
16.2.2.7 FIELD CRAFT WAGES. The actual and reasonable straight-time
-----------------
wages, including the actual straight-time portion of overtime wages, paid by
CONTRACTOR to craft ▇▇▇▇▇▇▇, craftsmen, and other craft employees hired
specifically for this job and used by CONTRACTOR at the Site for or in
connection with the construction of the Facility, for the time said employees
are engaged in the field construction hereunder, including the wages paid to
workmen for making repairs to construction equipment furnished on a bare rental
basis during their period of use on the job, provided such construction
equipment is delivered to the Site in first-class working condition, and also
provided such repairs are not reimbursable by insurance. Also, any reasonable
fringe benefits actually paid by CONTRACTOR either directly to the aforesaid
employees or to their unions, pursuant to collective bargaining agreements, or
to any governmental agency. Such wages and benefits shall not exceed the levels
established by collective bargaining agreements in effect in the area in which
the work is being performed and shall be within the range of rates set forth in
Schedule 16.2.1.1 attached hereto, subject to
-----------------
38
adjustment of those rates as provided in Clause 16.2.1.1 above.
---------------
16.2.2.8 FIELD WAGES AND SALARIES. The services performed by
------------------------
CONTRACTOR'S field staff employees who are permanent employees of CONTRACTOR,
including, but not limited to, Field Construction Superintendent, Assistant
Superintendent, Construction Engineer, Field Office Manager, Field Accountant,
Material Supervisor, Construction Planner, Field Inspector, Craft Supervisor,
Field Buyer, Safety Engineer, and Clerical personnel who are from CONTRACTOR'S
home office and are permanently assigned to the job site for the actual time
such employees reasonably devote to the work hereunder, shall be reimbursed at
the hourly rates set forth in Schedule 16.2.1.1 attached hereto, subject to
-----------------
adjustment of these rates as provided in Clause 16.2.1.1 above. All such
---------------
employees shall be identified on a list entitled "Field Assigned Personnel"
provided by CONTRACTOR to COMPANY and updated as necessary to keep the list
current.
16.2.2.9 LOCALLY HIRED FIELD STAFF. The actual and reasonable
-------------------------
straight-time wages and salaries, subject to COMPANY'S review and approval,
including the actual straight-time portion of overtime wages and salaries paid
by CONTRACTOR to field supervisory and other field staff employees who are hired
locally specifically for this Project, as distinguished from those who are
permanent employees of CONTRACTOR as mentioned in Clause 16.2.2.8 above, for the
---------------
time said employees are directly and necessarily engaged in the Construction
Work hereunder. Also, any reasonable employee benefits actually paid by
CONTRACTOR either directly to the aforesaid employees pursuant to CONTRACTOR'S
established personnel policies or, if they are union members, to their unions
pursuant to collective bargaining agreement, or to any governmental agency.
16.2.2.10 FIELD TRAVEL. The actual and reasonable amounts paid by
------------
CONTRACTOR for travel and living expenses of the personnel in Clause 16.2.2.8
---------------
above, but not to exceed the amounts specified in Schedule 16.2.1.1 attached
-----------------
hereto for each classification of employee, to the extent that it has been
CONTRACTOR'S normal practice to pay such allowances and not to exceed the levels
of allowances which are the normal practice to pay in the area in which the
employee who is traveling is based. All of the provisions of Clause 16.2.1.2
---------------
applicable to travel and living expenses of home office employees shall apply to
travel and living expenses of field staff employees.
16.2.2.11 UNEMPLOYMENT TAXES. The actual amounts paid by CONTRACTOR
------------------
under the Gesetzliche Sozialaufwendungen, wie Arbeitgeberbeitrage zur
Sozialversicherung und zur Arbeitslosenversicherung, und tarifliche
Sozialaufwendungen [statutory social security expenditure such as employer's
contribution to social insurance and unemployment insurance as well as social
expenditure on the basis of collective bargaining agreements] in connection with
the salaries and wages included under Clauses 16.2.2.7 and 16.2.2.9, but
-----------------------------
excluding (i) all contributions assessed under such laws if not computed
directly on said salaries or wages, (ii) interest and penalties of all kinds
connected with such taxes and contributions, and (iii) any such contributions
and taxes based on salaries or wages for which CONTRACTOR is reimbursed by an
insurance carrier.
16.2.2.12 OVERTIME FIELD WAGES. The premium portion of overtime
--------------------
wages and salaries paid by CONTRACTOR to the employees referred to in Clauses
-------
16.2.2.7, 16.2.2.8 and 16.2.2.9 above, for overtime worked by CONTRACTOR
-------------------------------
pursuant to the provisions of Clause 16.2.1.11 hereof. It is understood that if
----------------
established rates for overtime are not available for any of CONTRACTOR'S
employees, the wages or salaries which are paid to
39
employees therefor shall be subject to COMPANY'S prior written approval.
16.2.2.13 SMALL TOOLS. An allowance to cover the cost of providing
-----------
small tools in an amount equal to one and three-tenths percent (1.3%) of the
field craft wages (excluding fringe benefits) paid by CONTRACTOR to CONTRACTOR'S
employees engaged in field construction (excluding supervisory and clerical
personnel and excluding laborers employed by subcontractors and vendors).
16.2.2.14 FIELD OVERHEAD. The actual and reasonable amounts paid by
--------------
CONTRACTOR for temporary field offices located on the Site suitable for housing
CONTRACTOR'S field engineering and construction management staff and for a
reasonable number of COMPANY'S field engineering staff. Also, the actual and
reasonable cost to CONTRACTOR of all necessary items of office furniture and
equipment such as desks, tables, filing cabinets, chairs, waste baskets,
personal computers, work stations, software, printers and copiers all of a
reasonable number and cost and capability but only as approved by COMPANY prior
to their acquisition, fire extinguisher, and the like which are purchased by
CONTRACTOR for equipping and maintaining its construction office and other
temporary buildings needed at the Site for or in connection with the work to be
performed hereunder-- it being understood that such office furniture and
equipment purchased by CONTRACTOR shall become COMPANY'S property when
construction is completed; the actual and reasonable rentals paid by CONTRACTOR
to others for such office furniture and equipment used at the Site for equipping
and maintaining said buildings; and actual and reasonable rental charges for
such office furniture and equipment, owned by CONTRACTOR and furnished by it for
use as aforesaid at the Site. Also, the actual and reasonable cost to
CONTRACTOR of miscellaneous office expenses and supplies in said construction
office, including medical supplies for a first-aid room (if required), telephone
calls made and courier deliveries sent from the construction office at the Site;
postage and other transportation costs on outgoing correspondence, or other such
matter sent out from said construction office; Post Office box rental; and
blueprinting and photocopying costs at the rates specified in Clause 16.2.1.4
---------------
above. The costs of any medical supplies for which CONTRACTOR is reimbursed by
an insurance carrier shall be excluded from the above costs. The rental rates
for office furniture and equipment owned by CONTRACTOR and used on the work
hereunder as aforesaid shall be subject to COMPANY'S approval and the rental
terms of any such item shall commence when said item goes into service at the
Site and shall terminate upon shipment of the item away from the Site. It is
agreed that all costs and rentals under this Clause 16.2.2.14 shall be subject
----------------
to COMPANY'S prior approval. In no event shall COMPANY be liable for tools and
equipment lost or damaged due to CONTRACTOR'S negligent or intentional actions
or inactions.
16.2.2.15 FREIGHT CHARGES. The actual and reasonable freight,
---------------
express and trucking charges paid by CONTRACTOR for delivering to the Site, the
materials, construction supplies, construction equipment and tools (including
repair parts for construction equipment and tools furnished on a "bare rental"
basis), office furniture and equipment, medical supplies, office supplies, and
other things which are included under the provisions of Clauses 16.2.2.1,
-----------------
16.2.2.2, 16.2.2.3, 16.2.2.5, 16.2.2.6, and 16.2.2.14 above; and for returning
-----------------------------------------------------
construction equipment and tools and office furniture and equipment owned by
CONTRACTOR or rented from others to the warehouse or storage places or other
places of origin from which said items of equipment were brought to the job site
(it being understood that insofar as equipment owned by CONTRACTOR is concerned,
CONTRACTOR shall be reimbursed only for transporting such equipment from its
equipment storage yard or if from another job for a distance not to exceed
transportation from said storage yard, to the job
40
site, and for return to said storage yard). Also, in cases where transportation
costs on construction equipment, tools and other items are chargeable to COMPANY
as aforesaid, the actual and reasonable costs incurred by CONTRACTOR for crating
and loading such items at the point of shipment.
16.2.2.16 SUBCONTRACTS. The actual amounts paid by CONTRACTOR to
------------
subcontractors approved by COMPANY pursuant to Article 9 hereof in connection
---------
with the construction of the Facility pursuant to subcontracts entered into by
CONTRACTOR; also, the actual and reasonable amounts paid by CONTRACTOR to
vendors for the services of vendors' service representatives in cases where same
are required at the Site and are not included in the purchase price of the
materials involved.
16.2.2.17 INSURANCE. The amounts paid by CONTRACTOR for insurance
---------
which is a unique requirement of this Contract, which M&W does not normally
carry and which COMPANY has approved in writing before CONTRACTOR procures such
insurance. The amounts paid by CONTRACTOR for all other insurance to be
maintained by CONTRACTOR as specified in this Contract are included in the
hourly rates set forth in Schedule 16.2.1.1.
16.2.2.18 OTHER DIRECT FIELD COSTS. The actual and reasonable
------------------------
amounts paid by CONTRACTOR for such other direct field costs and expenses
necessarily incurred in the performance of the Construction Work hereunder, but
not specifically mentioned above as the parties may mutually agree are
reimbursable by COMPANY.
16.2.2.19 SALES, USE AND OTHER TAXES The actual amounts necessarily
--------------------------
paid by CONTRACTOR for sales taxes, use taxes and excise taxes on the materials
and other commodities chargeable to COMPANY under the above provisions, and such
other taxes and governmental charges described in Article 30, but excluding any
----------
interest or penalties in connection with any such taxes and other charges, any
taxes on motor fuels used in construction equipment to the extent recoverable
from the State by reason of the fact that the equipment is not operated on
public thoroughfares, and also excluding taxes set forth in Section 16.2.3.10.
-----------------
The preceding sentence shall apply only to the extent that the Project or
----
COMPANY is not exempt from such taxes. CONTRACTOR shall (and shall require each
subcontractor and vendor to) account for all taxes separately as individual line
items on each invoice, on each Application For Payment and in each Project cost
report submitted to COMPANY.
16.2.3 EXCLUDED COSTS. Reimbursable Costs shall not include:
-------------- ---
16.2.3.1 OTHER OVERHEAD. Overhead and general expenses of
--------------
CONTRACTOR'S principal office and offices other than the Site office, except as
may be expressly included in Sections 16.2.1 and 16.2.2.
--------------- ------
16.2.3.2 CAPITAL EXPENSES. CONTRACTOR'S capital expenses, including
----------------
interest on CONTRACTOR'S capital employed for the Project, excepting capital
expenses incurred solely due to COMPANY'S delay.
16.2.3.3 NEGLIGENCE. Costs due to the fault or negligence of
----------
CONTRACTOR, subcontractors, anyone directly or indirectly employed by any of
them, or for whose acts any of them may be liable, including but not limited to
costs for the correction of damaged, defective or non-conforming work, disposal
and replacement of materials incorrectly ordered or supplied, and making good
damage to property not forming part of the Construction Work.
16.2.3.4 OTHER COSTS. Any cost not specifically and expressly
-----------
41
described in Sections 16.2.1 and 16.2.2.
--------------- ------
16.2.3.5 OVERTIME TO MEET PROJECT SCHEDULE. Cost of overtime premium
---------------------------------
required to meet the Project Schedule if the delay was caused by the
mismanagement or willful act or neglect of CONTRACTOR, its subcontractors and
vendors, or their respective officers, agents, representatives or employees.
16.2.3.6 DELINQUENT CHARGES. Any kind of late charge, interest,
------------------
penalty, taxes or extra charge for late payments, excepting late charges,
interest, penalties, taxes or extra charges incurred solely due to COMPANY'S
delay.
16.2.3.7 HOME OFFICE COMPUTERS. Costs of personal computers, work
---------------------
stations, printers, software and related computer equipment used in CONTRACTOR'S
home office. Depreciation related to such computer equipment is included in the
hourly rates set forth in Schedule 16.2.1.1.
16.2.3.8 SECTION 648A, BGB. The cost of any bond obtained by
-----------------
CONTRACTOR under Section 648a of the German Civil Code (Bauhandwerkersicherung)
shall, in the relationship between CONTRACTOR and COMPANY, be borne by
CONTRACTOR, up to a maximum of two percent (2%) of the Face Value of the bond,
pursuant to Section 648a, subparagraph 3 of the German Civil Code. This cost
shall not be a Reimbursable Cost.
16.2.3.9 VIOLATIONS OF LAW. Any cost incurred as a result of the
-----------------
failure of CONTRACTOR or any subcontractor or vendor or their respective
officers, agents, representatives or employees comply with applicable law.
16.2.3.10 TAXES. Income taxes or taxes based on income paid by
-----
CONTRACTOR, all value added taxes (including the Import Turnover Tax) paid by
CONTRACTOR to its subcontractors and vendors, net assets taxes, trade capital
taxes and real property taxes.
16.2.4 PRINCIPLES AFFECTING REIMBURSABLE COSTS. COMPANY shall
--------------------------------------
reimburse Contractor for the items described in Sections 16.2.1 and 16.2.2,
--------------- ------
subject, however, to the following principles.
16.2.4.1 QUALIFYING COSTS. COMPANY shall pay all Reimbursable Costs
----------------
actually incurred that were set forth in the original Project Budget as part of
the original Budgeted Cost of the Work and all additional Reimbursable Costs
actually incurred that were necessary to plan, design, construct, erect,
install, equip, start up, test, calibrate, adjust and turn over the Facility in
accordance with the Contract, assuming proper design and construction. A cost
incurred due to force majeure shall be a Reimbursable Cost. A cost incurred due
to a change in the scope of the work approved by Change Order shall be a
Reimbursable Cost. The cost of procuring and installing a part of the Facility
that was inadvertently omitted (excluding redesign and re-engineering costs)
shall be a Reimbursable Cost. A cost incurred to increase the capacity or size
of a part that was inadvertently designed with a capacity or size insufficient
for the Facility (excluding redesign and re-engineering costs and excluding the
costs of procuring, installing and removing the undersized part) shall be a
Reimbursable Cost. A cost incurred to avoid an unforeseen obstruction, such as
subsurface granite, shall be a Reimbursable Cost. Examples of these and other
costs that qualify as Reimbursable Costs are set forth in Schedule 16.2.4
---------------
attached hereto and made a part hereof. Such examples shall be utilized in the
interpretation and application of the principles set forth in this Section
-------
16.2.4.
------
42
16.2.4.2 NON-QUALIFYING COSTS. Items that otherwise would qualify as
--------------------
Reimbursable Costs shall be excluded from Reimbursable Costs if such costs
duplicate previous work or were incurred to correct errors or omissions.
Injuries to persons at the Site do not qualify as Reimbursable Costs.
Examples of these and other costs excluded from Reimbursable Costs are set
forth in
Schedule 16.2.4. Such examples shall be utilized in the interpretation and
---------------
application of the principles set forth in this Section 16.2.4.
--------------
16.2.4.3 SPECIFIED COSTS. Costs which are specifically identified in
---------------
other provisions of the Contract as being the responsibility of either
COMPANY or CONTRACTOR shall be paid by the responsible party.
16.2.4.4 CHANGES IN PROJECT BUDGET. Additional Reimbursable Costs
-------------------------
incurred as a result of a change in the scope of the work approved by
Change Order shall be added to the Budgeted Cost of the Work. Additional
Reimbursable Costs incurred as a result of an unforeseen event or condition
(excluding price or cost increases) or force majeure shall be paid by
COMPANY and will result in an adjustment of the Budgeted Cost of the Work.
16.3 CONTRACTOR'S FEE. COMPANY shall pay CONTRACTOR a fee (the "FEE")
----------------
which shall consist of the Budgeted Fee set forth in Section 16.3.1 and as
--------------
increased by incentives, if any, earned by CONTRACTOR'S cost savings or as
decreased by overruns, if any, caused by CONTRACTOR'S overruns pursuant
to Section 16.3.2, and adjusted by adjustments in the Fee pursuant to
--------------
Section 16.10.
-------------
16.3.1 THE FEE. The Budgeted Fee (the "BUDGETED FEE") shall be
-------
DEM8,120,000, adjusted as set forth in Section 16.10 (which does not include
-------------
value added taxes associated with such Fee). At the time that the Project
Budget is finalized prior to commencement of the Construction Work, the total
budgeted Cost of the Work will be determined. That total budgeted Cost of the
Work shall be referred to herein as the "BUDGETED COST OF THE WORK". If the
parties revise the Project Budget due to changes, additions or omissions
pursuant to Section 10.3 or Section 14.3.1 or due to COMPANY'S delay pursuant to
------------ --------------
Section 14.4, the Budgeted Cost of the Work shall also be revised
------------
accordingly, but the Budgeted Fee shall only be adjusted in accordance with
Section 16.10. As of the date of this Agreement, the Budgeted Cost of the Work
-------------
is DEM460,544,936 (which does not include value added taxes associated with
such Fee).
16.3.2 CALCULATE INCENTIVE CHANGES IN FEE. If, upon completion of
----------------------------------
the Project, the actual Cost of the Work equals the Budgeted Cost of the Work,
the Fee shall be the original Budgeted Fee. If, upon completion of the Project,
the actual Cost of the Work is less than the Budgeted Cost of the Work, the Fee
shall be increased by twenty percent (20%) of the amount of savings up to, but
not exceeding a maximum total Fee (i.e., Budgeted Fee plus cost savings) of
---
DEM16,675,000 (which does not include value added taxes associated with such
Fee). For purposes of calculating the foregoing increase in the Fee, if
CONTRACTOR performs directly (i.e., without any subcontractor) the Construction
---
Work for the Clean Room, that portion of the total Budgeted Cost of the Work
attributable to the Construction Work performed directly by CONTRACTOR for the
Clean Room shall be subtracted from the total Budgeted Cost of the Work, and
that portion of the actual Cost of the Work attributable the Construction Work
performed directly by CONTRACTOR for the Clean Room shall be subtracted from the
actual Cost of the Work, so that any savings attributable to the Construction
Work performed directly by CONTRACTOR for the Clean Room shall be excluded in
determining the amount of the savings upon which increases in the Fee are to be
calculated. If, upon completion of the
43
Project, the actual Cost of the Work exceeds the Budgeted Cost of the Work, the
Fee shall be reduced by twenty percent (20%) of the amount that exceeds the
Budgeted Cost of the Work, until the amount of the reduction equals fifty
percent (50%) of the Budgeted Fee. From that point further, there shall be no
more reductions in the Fee.
16.3.3 FEE FOR SERVICES. The parties intend that all costs and
----------------
expenses incurred by CONTRACTOR in connection with the Project not specifically
provided to be reimbursed to CONTRACTOR in Section 16.2 including, but not by
------------
way of limitation, CONTRACTOR'S profit and the cost of performing CONTRACTOR'S
guarantees and warranties, shall be covered by the Budgeted Fee.
16.4 TOTAL CONTRACT AMOUNT. Except for such payments as may become due
---------------------
CONTRACTOR under other provisions of this Contract, the summation of the
Reimbursable Costs enumerated in Section 16.2 above and the Fee set forth in
------------
Section 16.3 above shall constitute the total Contract Amount which COMPANY
------------
shall pay to CONTRACTOR for the true and faithful performance of all of
CONTRACTOR'S obligations under the Contract.
16.5 COSTS OF ALTERATIONS. CONTRACTOR'S charges under Section 16.2 above
-------------------- ------------
shall not include charges of the kinds covered therein incurred by CONTRACTOR
for making the alterations, adjustments, repairs, replacements and other
corrections described in Article 19 hereof. Moreover, in the event the costs of
----------
such work are compensated to CONTRACTOR by insurance carried hereunder, there
shall be no adjustment made in CONTRACTOR'S Fee as a consequence of any
insurance proceeds paid to CONTRACTOR. All alterations, adjustments, repairs,
replacements and other corrections which CONTRACTOR may be required to make on
the Facility in fulfilling the guarantees set forth in Article 18 hereof after
----------
COMPANY takes over the Facility for operation or use shall be borne by
CONTRACTOR without reimbursement from COMPANY. Furthermore, in cases where
COMPANY makes any alterations, adjustments, repairs, replacements or other
corrections of the kind herein above considered in this Section 16.5 with its
------------
own forces as provided for in Section 19.4 hereof, CONTRACTOR shall reimburse
------------
COMPANY for the actual costs to COMPANY of all materials and labor used therefor
and all other expenses such as overhead, taxes, insurance, freight, equipment
rental and the like applicable thereto.
16.6 RECORDS OF REIMBURSABLE COSTS. Following each month's work hereunder,
-----------------------------
CONTRACTOR shall prepare a summary of the total hours expended by job or worker
classification of all employees who have performed work hereunder during the
preceding month whose time is chargeable to COMPANY under the provisions of
Section 16.2 above. (CONTRACTOR shall maintain individual time cards and rate
------------
sheets for all of its personnel who have performed work hereunder showing the
time actually spent by each individual as part of CONTRACTOR'S records of
Reimbursable Costs.) CONTRACTOR shall transmit copies of this summary as soon
as possible thereafter to COMPANY'S Project Manager. All fringe benefits
included in labor charges shall be accounted for as a separate line item. In
addition, CONTRACTOR shall keep accurate and detailed accounts of all other
Reimbursable Costs chargeable to COMPANY under Section 16.2 above. All material
------------
costs shall be verified by the actual payment vouchers. In case any subcontract
is let, or purchase is made, on a "cost-plus" basis pursuant to Section 9.5
-----------
hereof, CONTRACTOR shall, if COMPANY so requests, make an audit of all
expenditures made thereunder prior to final settlement with such subcontractor
or vendor. Furthermore, CONTRACTOR shall provide COMPANY'S Inspector and other
Representatives continuous access to the Site and other locations where work on
this Contract is being performed and shall give COMPANY'S Inspector and other
Representatives and auditors access to CONTRACTOR'S books and other records at
any and all reasonable times to the extent necessary to determine the accuracy
of all of CONTRACTOR'S charges entered into the accounts referred to above and
the number of hours entered in
44
the summaries referred to in the first sentence of this Section 16.6. CONTRACTOR
------------
shall furnish COMPANY with such statements, invoices, receipts, vouchers, and
other information as may be required to enable COMPANY to audit CONTRACTOR'S
books and other records. All time cards for time chargeable to COMPANY in the
summaries referred to in the first sentence of this Section 16.6 must bear the
------------
signature of the person's department head or division head. Also, any "cost-
plus" subcontract or purchase order which CONTRACTOR may (with COMPANY'S prior
written consent) enter into in connection with its Construction Work hereunder
shall contain provisions (i) requiring that accurate and detailed accounts be
kept of the Reimbursable Costs thereunder, (ii) permitting the Representatives
and auditors of CONTRACTOR and COMPANY to have access for audit purposes at any
and all reasonable times to the subcontractor's or vendor's books and other
records pertaining to costs thereunder, and (iii) requiring that each such
subcontractor or vendor furnish CONTRACTOR and COMPANY (if requested) with such
statements, invoices, receipts, vouchers, and other information as may be needed
to enable CONTRACTOR and COMPANY to audit the books and records pertaining to
said costs.
16.7 DISCOUNTS AND REFUNDS. CONTRACTOR shall promptly apply for and obtain
---------------------
all discounts (including discounts due to payment of bills on a "cash" basis),
refunds, deductions (including tax collection allowances) and the like to which
CONTRACTOR may be entitled with respect to the items charged to COMPANY under
this Article 16. COMPANY shall be entitled to a credit in the amount of each
----------
such discount, refund, deduction and the like and CONTRACTOR shall make
reasonable and timely efforts to see that they are secured.
16.8 SURPLUS. COMPANY shall be entitled to all surplus materials, surplus
-------
construction supplies, and surplus items for which it shall have reimbursed
CONTRACTOR at actual cost. Upon completion of its Construction Work hereunder,
CONTRACTOR shall remove all of said materials, supplies, and items to places of
storage or disposal to be designated by COMPANY; however, if requested by
COMPANY, CONTRACTOR shall make a reasonable effort to arrange with vendors to
take back (or otherwise dispose of) such left over items and if successful,
shall credit COMPANY with the amounts refunded or credited by vendors. The
amounts of such refunds or credits obtained from vendors for returning such left
over items shall in each instance be subject to COMPANY'S approval. As to those
surplus materials and supplies that are not taken back by the vendors,
CONTRACTOR shall, to the extent requested by COMPANY, endeavor to sell the same
to third parties subject to COMPANY'S prior approval as to the amounts to be
received therefor. CONTRACTOR shall use its best efforts, consistent with
meeting its obligations under the Contract, to keep surplus materials to a
minimum. In those instances where because of delivery instructions, CONTRACTOR
finds it necessary to order materials on an estimated basis prior to completing
the engineering design, CONTRACTOR shall review such orders promptly after the
design is completed and adjust the quantities involved to conform to actual
material take-off. After its field operations begin, CONTRACTOR shall make a
periodic review of materials on hand and on order for the purpose of identifying
any surplus materials that are beyond its needs. CONTRACTOR shall furnish
COMPANY reports listing any such surplus materials thus disclosed and showing
its recommendations as to whether the surplus should be returned to vendors for
credit or made available for sale to other parties. COMPANY shall promptly
review such reports and advise CONTRACTOR as to the actions to be taken with
respect to disposal of surplus materials.
16.9 LUMP SUM SUBCONTRACT. It is agreed that in those instances where
--------------------
COMPANY feels that it would be in its best interests to have CONTRACTOR
subcontract any of the field work hereunder on a lump-sum price basis instead of
having such work performed by CONTRACTOR'S forces on the basis herein provided
for, COMPANY shall have the right to require CONTRACTOR to do so.
45
Costs of the kinds covered in Section 16.2.1 above that are incurred by
--------------
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
------------
charges under said lump sum subcontracts. Provided, however, that the amount
-------- -------
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
-----------------
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
----------
or omissions are made in the scope of the work pursuant to Section 10.2 and
------------
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.
======
Upon the occurrence of an event described in Clause (i) or Clause (iii) of this
---------- ------------
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
--------------------------
46
submitted to COMPANY by CONTRACTOR, COMPANY shall make progress payments on
account of the Contract Amount to CONTRACTOR pursuant to this Article 17. The
----------
period covered by each Application for Payment shall be one calendar month
ending on the last day of the month. In all instances, the period covered by
the Application for Payment must coincide with the corresponding period set
forth in the Project Schedule. Near the end of each calendar month, CONTRACTOR
shall prepare a fully itemized Application for Payment showing in detail and as
completely as possible (i) invoices actually received from subcontractors,
vendors and other third parties and expenses and charges actually paid for
Reimbursable Costs chargeable to COMPANY under the provisions of Section 16.2
------------
hereof (less sums for which CONTRACTOR has previously received reimbursement);
and (ii) the portion of CONTRACTOR'S Budgeted Fee that is then payable to
CONTRACTOR, as stated in Section 17.2 below. The Application for Payment shall
------------
show the actual mathematical calculations by which such portion of the Budgeted
Fee was determined. The Application for Payment shall be broken down by
Reimbursable Costs and Budgeted Fee attributable to each Construction Phase.
Each Application for Payment will show the total hours worked by employees in
each classification set forth in Schedule 16.2.1.1 multiplied by the
corresponding hourly rate in Schedule 16.2.1.1. As soon as each such
Application for Payment shall have been prepared, CONTRACTOR shall submit it to
COMPANY along with all substantiating invoices, payrolls, ▇▇▇▇▇ cash accounts,
freight bills, etc., not previously submitted and, at the same time, shall also
send COMPANY an invoice for the amount by which the summation of the amounts
entered in the aforesaid Application for Payment exceeds the aggregate of all
payments previously made by COMPANY under the provisions of this Section 17.1
------------
and Section 17.2. Each Application for Payment shall show (1) Reimbursable
------------
Costs for the Project and for each Construction Phase and (2) the percentage
completion of the Construction Work for the Project and for each Construction
Phase as of the end of the period covered by the Application for Payment.
CONTRACTOR shall certify to COMPANY the aforesaid percentages of completion,
and COMPANY and COMPANY'S Inspector shall have the right to verify such
percentages. Each Application for Payment and the progress payment made by
COMPANY to CONTRACTOR shall exclude all amounts that CONTRACTOR retains from its
subcontractors (such amount retained being hereinafter referred to as the
"SUBCONTRACT RETAINAGE"). Applications for Payment shall show the portion of
Reimbursable Costs properly allocable to materials delivered and suitably stored
at the Site for subsequent incorporation in the Facility ("STORED MATERIALS")
and shall show that the requirements of Section 17.7 have been satisfied as a
------------
condition precedent to payments for Stored Materials. In taking action on
CONTRACTOR'S Applications for Payment, COMPANY shall be entitled to rely on the
accuracy and completeness of the information furnished by CONTRACTOR and shall
not be deemed to represent that COMPANY has made a detailed examination, audit
or arithmetic verification of the documentation submitted or other supporting
data. In no event shall any Application for Payment seek reimbursement of
Reimbursable Costs previously reimbursed to CONTRACTOR or payment of any part of
the Budgeted Fee previously paid to CONTRACTOR. Subject to the provisions of
Article 31 hereof, if COMPANY finds the Application for Payment and invoices to
----------
be proper and in accord with the provisions hereof and if no Default or Event of
Default then exists hereunder, COMPANY shall pay CONTRACTOR the entire amount of
said Application for Payment within thirty (30) calendar days after receiving
the Application for Payment, the invoices and other matters hereinabove
specified to be submitted therewith. Any errors or discrepancies discovered in
the Application for Payment shall not be cause for COMPANY to withhold payment
of the balance of the Application for Payment as to which there is no error or
discrepancy. If any part of the Project (including any Construction Work)
covered by any monthly Application for Payment has been rejected by COMPANY or
COMPANY'S Inspector or Representative (including any Person acting on behalf of
any lender of COMPANY) or is being repaired or replaced by CONTRACTOR, the
portion of Reimbursable Costs for which CONTRACTOR seeks reimbursement and the
portion of the Budgeted Fee attributable to such part of the Project shall be
withheld
47
until all necessary repair or replacement has been completed and approved
by COMPANY. COMPANY shall not be obligated to make payment for any
Construction Work that is not covered by an invoice or that has been rejected by
COMPANY or COMPANY'S Inspector or Representative or that exceeds the maximum
amount budgeted for the affected Construction Phase. If payment is sought for
Stored Materials, CONTRACTOR shall satisfy the conditions to payment for Stored
Materials set forth in Section 17.7 below. In no event shall any payment exceed
------------
the difference between (y) the cost of Construction Work in place, payments for
Stored Materials, if any, the portion of the Budgeted Fee payable to date, and
any other costs, expenses and fees actually paid by CONTRACTOR for Project costs
as of the date of the Application for Payment, and (z) any required Retainage
(defined in Section 17.2 below) and the sum of all prior payments. Each advance
------------
for CONTRACTOR'S Budgeted Fee shall be subject to the Retainage.
17.2 PAYMENT OF INCREASES IN FEE; RETAINAGE. No portion of the Fee above
--------------------------------------
the Budgeted Fee shall become due and payable until the Project has been finally
completed and Final Acceptance of the Facility has occurred. Progress payments
shall be made only on the Budgeted Fee. Each Application for Payment shall show
the percentage of the Project that has been completed to COMPANY'S satisfaction,
and CONTRACTOR shall be paid (subject to Retainage) the same percentage of the
Budgeted Fee. Out of each payment of the Budgeted Fee, COMPANY shall retain
fifteen percent (15%) of the portion of the Budgeted Fee then due under the
Contract. The amount retained by COMPANY is referred to as the "RETAINAGE".
The Application for Payment shall show the portion of the Budgeted Fee that is
then due and payable, including the method used to calculate such portion, under
clause (ii) in Section 17.1, above, and shall show the eighty-five percent (85%)
------------
portion payable to CONTRACTOR, the fifteen percent (15%) portion to be retained
by COMPANY and the cumulative amount retained by COMPANY. In no event shall
COMPANY be obligated to pay to CONTRACTOR on account of CONTRACTOR'S Budgeted
Fee an amount greater than the amount that bears the same ratio to the entire
Budgeted Fee as the then percentage of completion of the Facility bears to one
hundred percent (100%) completion of the Facility.
17.3 PARTIAL RELEASE OF RETAINAGE. It is agreed that COMPANY will release
----------------------------
one-half of the Retainage for payment to CONTRACTOR if the Facility is finally
completed prior to or on the date for Final Completion set forth in Section
-------
14.2. CONTRACTOR shall submit a separate invoice to COMPANY covering such
payment at the time the Facility is taken over for operation and maintenance as
aforesaid, and COMPANY shall pay CONTRACTOR the amount of said invoice within
thirty (30) calendar days after COMPANY'S receipt thereof.
17.4 PAYMENT NOT A WAIVER BY COMPANY. No payments made by COMPANY pursuant
-------------------------------
to a monthly Application for Payment as hereinabove provided shall be deemed to
signify or imply acceptance of the materials or workmanship covered by such
Application for Payment; and none of them shall operate as an admission on the
part of COMPANY as to the propriety or accuracy of any of the amounts entered in
the aforesaid Application for Payment, or as a waiver of COMPANY'S right to
audit provided for herein. Furthermore, when computing subsequent payments,
COMPANY shall not be bound by any entries in previous Applications for Payment
and shall be permitted to make corrections for errors therein. COMPANY'S final
payment for the Facility shall in no way relieve CONTRACTOR of any obligations
or responsibilities under the Contract which extend beyond the date of such
final payment.
17.5 PAYMENT OF BALANCE OF RETAINAGE. Within thirty (30) calendar days
-------------------------------
after COMPANY has given CONTRACTOR its Final Acceptance of the Facility as
provided for in Article 15 hereof and received a proper Application for Payment
----------
and supporting invoices from CONTRACTOR covering the payment hereinafter
specified in this Section 17.5 and has received from CONTRACTOR
------------
48
all other documents and other items required from CONTRACTOR hereunder
(including without limitation documents required by Section 4.11 and Section
------------
27.1 and Articles 28 and 29), COMPANY shall pay CONTRACTOR the balance of the
----------- --
Contract Amount due on the cost of the Facility as of the date of Final
Acceptance (as verified by COMPANY'S Representatives and accountants) less the
summation of all credits and refunds then due COMPANY under the provisions of
the Contract; provided, however, that in case the aforesaid summation of credits
and refunds due COMPANY shall be found to exceed the aforesaid unpaid balance of
the Contract Amount, CONTRACTOR shall remit the difference between said
summation and said unpaid balance to COMPANY within thirty (30) calendar days
after the amount of such difference is determined. Such determination shall be
made with reasonable dispatch. Except as provided in Section 17.6 next below,
------------
the payment hereinabove specified shall be the final payment due CONTRACTOR
under the Contract; and before said final payment is made, CONTRACTOR shall
submit evidence satisfactory to COMPANY that all payrolls, bills, and other
indebtedness theretofore incurred in connection with the Contract have been
paid, and all subcontractors and vendors have been paid in full and all
governmental inspections and approvals required to permanently occupy and
operate the Facility have been completed and issued and the Contract has
otherwise been fully performed by CONTRACTOR.
17.6 INSURANCE ADJUSTMENTS. The hourly rates in Schedule 16.2.1.1 shall
---------------------
not be adjusted in the event of any insurance premium adjustments resulting from
audits by Contractor's insurers or for any other reason.
17.7 STORED MATERIALS. As a condition precedent to payment for Stored
----------------
Materials (i) the Stored Materials shall be included in the coverage of the
insurance policies required under this Agreement; (ii) CONTRACTOR shall deliver
a certification that no subcontractor, vendor, or other person has retained
title, or has liens on or security interests in, the Stored Materials and shall
deliver paid invoices or other documentation evidencing title to the Stored
Materials vested in CONTRACTOR; (iii) CONTRACTOR shall have delivered such
documentation as shall be effective to transfer, upon payment, ownership of the
Stored Materials to COMPANY; and (iv) the Stored Materials are satisfactorily
stored at the Site to protect against theft or damage. Except with COMPANY'S
prior written approval, CONTRACTOR shall not make advance payments to vendors
for materials which have not been delivered and stored at the Site.
ARTICLE 18
WARRANTIES AND GUARANTEES
18.1 CONTRACTOR'S WARRANTY AND GUARANTEE. CONTRACTOR warrants and
-----------------------------------
guarantees (i) that all of CONTRACTOR'S, its subcontractors' and vendors' design
and engineering work for the Facility, as well as the selection of materials for
the Facility, will be properly performed; (ii) that the Facility and all
workmanship and materials therein will be (and perform) as specified and
described in the Contract Documents and in applicable plans, specifications,
drawings, data sheets and other Contract Documents approved by COMPANY; (iii)
that all said workmanship and materials will be of the best quality for the
grades specified, free from objectionable defects, and suitable for the
respective uses intended; (iv) that CONTRACTOR'S work and design possesses at
the time of Final Acceptance the characteristics assured in the Contract; (v)
that the work and design conform with the recognized rules of sound engineering
practice and are free from defects which would nullify or diminish the value or
usefulness of the Facility for normal purposes or for the purpose intended in
the Contract; and (vi) that the work and design shall satisfy COMPANY
requirements for clean room air quality, process equipment, vibration,
particulate, air, water and other quality requirements of COMPANY. The
foregoing warranties and guarantees exclude the Wafer Process Equipment and
materials purchased directly by COMPANY. If any failures of the Facility or any
Construction Phase or any system within the
49
Facility to conform to the foregoing warranties and guarantees (excepting,
however, any such failures resulting from ordinary wear and tear, ordinary
corrosion, or improper operation after COMPANY takes over the Facility for
operation if such improper operation is not attributable to some act or omission
of CONTRACTOR, its subcontractors or vendors) are found by COMPANY within the
applicable period of time specified hereinafter in this Section, beginning on
the Warranty Commencement Date (defined in this Section) applicable to the
Facility or to the Construction Phase or to such system, COMPANY shall promptly
notify CONTRACTOR thereof in writing; and, in accordance with the provisions of
Article 19 hereof, CONTRACTOR shall thereupon make all alterations,
----------
adjustments, repairs, replacements and other corrections and do all things
needful to make the Facility or such Construction Phase or such system and all
workmanship and materials therein conform to the warranties and guarantees
herein specified in every particular. The warranty and guarantee periods for the
Facility or any Construction Phase or system are as follows:
Electrical [Electrical 1 year
generating or transmitting
equipment such as trans-
formers, switchgear,
generators, etc.]
Rotating Parts 1 year
Piping And Static 5 years
Mechanical Systems
Any Other Portion Of 5 years
The Facility
Furthermore, it is agreed that all alterations, adjustments, repairs,
replacements and other corrections that CONTRACTOR is required to make within
the guarantee period specified above in this Section 18.1 shall, in each case,
------------
be warranted and guaranteed by CONTRACTOR for an additional period of time equal
to the applicable period of time specified above in this Section, dating from
the date that the alteration, adjustment, repair, replacement and other
corrections have been completed. CONTRACTOR'S warranties and guarantees shall
exclude liability for ordinary wear and tear, ordinary corrosion or improper
operation after Company takes over the Facility for operation if such improper
operation is not attributable to some act or omission of CONTRACTOR, its
subcontractors or vendors. The "WARRANTY COMMENCEMENT DATE" shall be (i) in the
case of a system, the date upon which such system has been completed in its
entirety and all Punch List items that could lead to a malfunction of the system
or could limit any of such system's functions or could affect COMPANY'S
continuous use of such system have been corrected and the system satisfies the
specifications for the operation of such system and such system has satisfied
the System Performance Test and COMPANY has given CONTRACTOR notice of
satisfactory completion of the System Performance Test pursuant to Section 25.2;
------------
and (ii) in the case of any other part of the Facility, upon Final Completion of
the Facility.
18.2 COMPANY'S RIGHT TO REPAIR. If CONTRACTOR fails or refuses to comply
-------------------------
with a demand to repair defects within a reasonable time set by COMPANY or
unreasonably postpones such repair, then COMPANY shall be entitled to have the
defects repaired at the expense of CONTRACTOR by COMPANY'S own forces as
provided in Section 19.3. Furthermore, in that case COMPANY shall be entitled
------------
to claim from CONTRACTOR an anticipated payment on the estimated expense to
repair the defects. In such event, COMPANY shall use reasonable efforts to
avoid unnecessary expenditures and shall maintain reasonably detailed records of
the costs COMPANY incurs.
50
18.3 LIABILITY FOR DAMAGES. If a defect is attributable to a fault of
---------------------
CONTRACTOR or its agents, subcontractors or vendors, CONTRACTOR shall also be
obliged to compensate COMPANY for all liability, loss, damage, cost and expense
arising therefrom.
18.4 CAPACITIES AT OPERATING CONDITIONS. It is expressly understood that
----------------------------------
compliance with the aforesaid warranties and guarantees will require, but not by
way of limitation, that all materials will have capacities (in terms of heat
capacities, duty cycles, rates of flow, volumes, and the like) at operating
conditions as set forth in the plans, specifications, drawings, data sheets and
other Construction Documents approved by COMPANY, under which said items of
material are furnished, not less than the respective capacities set forth in
said plans, specifications, drawings, data sheets and other Construction
Documents and, further, that said items will operate satisfactorily (that is,
will be free from defects in design and will operate particulate free and
without excessive noise, vibration, strain, and deterioration) at all capacities
set forth in said plans, specifications, drawings, data sheets and other
Construction Documents. Furthermore, CONTRACTOR warrants and guarantees that
the Facility shall meet the conditions of temperature, pressure, cleanliness,
vibration and other operating conditions specified in COMPANY'S process design
requirements.
18.5 Coordination Of Functions. CONTRACTOR further warrants and guarantees
-------------------------
that the Facility and all portions thereof will be suitably coordinated as to
functions and interrelations, properly responsive to controls and sufficiently
stable in operation to avoid objectionable fluctuations in operating
temperatures, pressures, cleanliness, vibration and other operating conditions
and the like during all stages of operation; and will operate satisfactorily
without depending upon the routine use of spare equipment or upon the added
capacity of any spare equipment and with no more attention than is consistent
with good facility operating practice.
18.6 RETAINING IMPERFECT MATERIALS. In the event that any workmanship or
-----------------------------
materials are found to be not as above warranted or guaranteed and the parties
hereto mutually agree to permit same to remain in the Facility, the retention of
such workmanship or materials shall not operate as a waiver of CONTRACTOR'S
responsibility therefor and, in the absence of a written agreement to the
contrary, CONTRACTOR'S responsibility for the safety and serviceability of such
workmanship and materials shall be the same as though such imperfections had not
been discovered. However, the parties shall not allow a known unsafe condition
to continue to exist.
18.7 NO RELEASE OF OTHER CLAIMS. This Article 18 shall not constitute, or
-------------------------- ----------
be interpreted to constitute, a release or discharge by COMPANY of any right,
claim or remedy COMPANY may have against CONTRACTOR or any subcontractor or
vendor under the Contract or under applicable law in respect of the matters
encompassed by this Article 18 or in respect of any defects or failure to meet
----------
specifications or failure of capacities at operating conditions or improper,
inferior, defective, unsuitable or damaged workmanship or materials or Defaults
or Events of Default or other disputed claim or cause of action whatsoever.
ARTICLE 19
CORRECTION OF DEFECTIVE CONSTRUCTION WORK
19.1 CORRECTION OF WORK FOR WHICH CONTRACTOR IS RESPONSIBLE. Subject to
------------------------------------------------------
the conditions hereinafter set forth in this Article 19 and in Article 22
---------- ----------
hereof, CONTRACTOR at no charge to COMPANY shall make or cause to be made all
alterations, adjustments, repairs, replacements and other corrections to the
Construction Work that shall be, or become, necessary (i) by reason of the
rejection of improper, inferior, defective, unsuitable or damaged workmanship
51
or materials, or any combination thereof, before COMPANY takes over the Facility
for operation; (ii) by reason of any loss or damage that may be suffered by the
Facility for which CONTRACTOR assumes responsibility under other provisions of
the Contract; (iii) to make the Facility and all workmanship and materials
therein conform to CONTRACTOR'S warranties and guarantees; or (iv) to the extent
that any such defects are the result of CONTRACTOR'S negligence or willfulness
or disregard of specifications or drawings. Any defect in materials due to the
fault or default of any subcontractor or vendor shall be imputed to CONTRACTOR,
and CONTRACTOR shall be liable to COMPANY for such defect. CONTRACTOR shall
require that each subcontractor and vendor incorporate into their respective
sub-subcontracts and purchase orders with their respective sub-subcontractors
and vendors the same liability to CONTRACTOR that CONTRACTOR has to COMPANY
under this Section. If any materials furnished by COMPANY hereunder are found to
be improper, inferior, defective, unsuitable or damaged, COMPANY shall bear the
expenses for all necessary alterations, adjustments, repairs, or replacements to
said materials that are needed because of such deficiencies. All alterations,
adjustments, repairs, and replacements made under the provisions of the Contract
shall include the removal (if removal be necessary) of the improper, inferior,
defective, unsuitable, or damaged materials and the handling and installation of
the altered, repaired, or new materials; and any such work which is done after
the Facility has been put into operation shall be performed with as little
interruption of the operation of the Facility as feasible.
19.2 USING NEW MATERIALS FOR REPAIRS. Materials which are found to be
-------------------------------
improper, inferior, defective, unsuitable, or damaged, or otherwise not in
conformance with the Contract shall not be altered or repaired, but shall be
replaced with new materials, unless (i) CONTRACTOR gives COMPANY a written
statement to the effect that the proposed alteration or repair is practicable
and will entirely correct the unsatisfactory features of the materials under
consideration, and COMPANY agrees in writing to said alteration or repair; or
(ii) specifications issued or approved by COMPANY for the materials in question
permit alterations or repairs of the nature contemplated.
19.3 REPAIR BY COMPANY. In the event that any alteration, adjustment,
-----------------
repair, replacement or other correction becomes necessary as provided in this
Article 19 after the Facility has been put into operation and if it is mutually
----------
agreed that said alteration, adjustment, repair, replacement or other correction
can be made more rapidly and with less delay in the operation of the Facility by
COMPANY'S forces than by CONTRACTOR'S, or if CONTRACTOR fails or refuses to make
or unreasonably postpones said alteration, adjustment, repair, replacement or
other correction, COMPANY shall have the right to make said alteration,
adjustment, repair, replacement or other correction with its own forces at
CONTRACTOR'S expense. In such event, COMPANY shall use reasonable efforts to
avoid unnecessary expenditures and shall maintain reasonably detailed records of
the costs COMPANY incurs.
Article 20
Indemnity
20.1 CONTRACTOR'S INDEMNITY. CONTRACTOR shall defend, indemnify, and hold
----------------------
harmless COMPANY, COMPANY'S consultants and any lender for the Project and their
officers, agents and employees from and against all claims, demands, damages,
liabilities, losses, suits, actions, costs and expenses, including court costs
and attorneys' fees, arising out of, or resulting from any defective design or
defective materials or from the performance of defective or negligent (simple or
gross) acts, errors or omissions during Construction Work or of any work
pursuant to CONTRACTOR'S guarantee and warranty (including without limitation
any work pursuant to guarantees and warranties provided by subcontractors and
vendors), CONTRACTOR'S or its subcontractors', vendors' or agents' activities on
the Site, or CONTRACTOR'S breach of this Agreement.
52
Additionally, CONTRACTOR agrees to defend, indemnify and hold COMPANY, COMPANY'S
other consultants and any lender for the Project and their officers, agents and
employees harmless from and against any and all claims, demands, damages,
liabilities, losses, suits, actions, costs and expenses (including court
expenses and attorneys' fees) for (i) injuries to or death of any person or
persons, including the employees of each party hereto and the employees of their
subcontractors or vendors or of any lender for the Project, and (ii) loss of or
damage to real property (including environmental contamination resulting from
the activities of CONTRACTOR or its subcontractors, vendors or agents), or the
property of any person or persons (including existing property of COMPANY and
the Facility) caused by or arising out of any occurrence in any manner connected
with the defective or negligent (simple or gross) acts, errors or omissions
during performance of the Contract, regardless of whether or not it is caused in
part by a party or other person indemnified hereunder, except that CONTRACTOR
assumes no liability whatsoever for the sole negligent acts of COMPANY or of
COMPANY'S officers, agents or employees. CONTRACTOR shall be fully responsible
for any defective or negligent (simple or gross) acts, errors or omissions of
any of CONTRACTOR'S subcontractors or vendors (including without limitation sub-
subcontractors, manufacturers, suppliers and other persons hired by any
subcontractor or vendor in performing its obligations under the Contract).
20.2 INDEMNIFICATION BY SUBCONTRACTORS AND VENDORS. CONTRACTOR shall use
---------------------------------------------
its best efforts to require each subcontractor and vendor in each subcontract
and purchase order to defend, indemnify and hold harmless COMPANY, COMPANY'S
consultants and any lender for the Project and their officers, agents and
employees from and against all claims, demands, damages, liabilities, losses,
suits, actions, costs and expenses, including court costs and attorneys' fees,
arising out of, or resulting from the performance of the Construction Work by
such subcontractor or vendor or of any work pursuant to any guarantee and
warranty given by such subcontractor or vendor, such subcontractor's or vendor's
activities on the Site, or such subcontractor's or vendor's breach of its
subcontract or purchase order, and each subcontract and purchase order shall
require each subcontractor and vendor to defend, indemnify and hold COMPANY,
COMPANY'S consultants and any lender for the Project and their officers, agents
and employees harmless from and against any and all claims, demands, damages
(including consequential damages), liabilities, losses, suits, actions, costs
and expenses (including court expenses and attorneys' fees) for (i) injuries to
or death of any person or persons, including the employees of each party hereto
and the employees of their sub-subcontractors or vendors or of any lender for
the Project, and (ii) loss of or damage to real property (including
environmental contamination resulting from the activities of such subcontractor
or vendor), or the property of any person or persons (including existing
property of COMPANY and the Facility) caused by or arising out of any occurrence
in any manner connected with the performance of such subcontract or purchase
order, regardless of whether or not it is caused in part by a party or other
person indemnified hereunder, except that no subcontractor or vendor shall have
any liability whatsoever for the sole negligent acts of COMPANY or of COMPANY'S
officers, agents or employees.
20.3 COMPANY'S INDEMNITY. COMPANY shall defend, indemnify, and hold
-------------------
harmless CONTRACTOR and CONTRACTOR'S officers, agents and employees from and
against all claims, demands, damages, liabilities, losses, suits, actions, costs
and expenses, including court costs and attorneys' fees, arising out of, or
resulting from the negligence or willful misconduct of COMPANY or COMPANY'S
officers, agents or employees, in the performance of COMPANY'S obligations
hereunder. Additionally, COMPANY agrees to defend, indemnify and hold
CONTRACTOR and CONTRACTOR'S officers, agents and employees harmless from and
against any and all claims, demands, damages, liabilities, losses, suits,
actions, costs and expenses (including court expenses and attorneys' fees) for
(i) injuries to or death of any person or persons, including the employees of
53
each party hereto and the employees of their subcontractors or vendors
proximately and solely caused by the negligence or willful misconduct of COMPANY
or COMPANY'S officers, agents or employees, and (ii) loss of or damage to real
property (including pre-existing environmental contamination), or the property
of any person or persons, proximately and solely caused by the negligence or
willful misconduct of COMPANY or COMPANY'S officers, agents or employees.
20.4 CONSEQUENTIAL DAMAGES. Except as provided in this Section 20.4, neither
--------------------- ------------
COMPANY nor CONTRACTOR shall be liable for any consequential damages arising
from or in connection with this Contract or the Project.
20.4.1. CONTRACTOR shall only be liable to COMPANY for consequential damages
to the Facility, its contents and any persons present therein, and which occur
during the performance of work under this Contract and during the warranty
periods referenced herein. Under no circumstances shall CONTRACTOR be
liable to COMPANY for consequential damages in the nature of lost profits,
loss of revenue, loss of production or loss of operation.
20.4.2. The amount of consequential damages for which CONTRACTOR shall be
liable to COMPANY pursuant to the first sentence of Section 20.4.1 shall be:
--------------
20.4.2.1. to the extent such consequential damages arise from
intentional conduct of Contractor, in an unlimited amount;
20.4.2.2. to the extent such consequential damages in the form of
property damage or bodily injury arise from the gross negligence of CONTRACTOR,
in an amount limited to DM 20,000,000 (DM twenty million) for each individual
occurrence and DM 80,000,000 (DM eighty million) annual aggregate;
20.4.2.3. to the extent such consequential damages arise from the
negligence of CONTRACTOR, the gross negligence of CONTRACTOR not covered by
Section 20.4.2.2, or the negligence, gross negligence or intentional conduct of
----------------
CONTRACTOR'S subcontractors, vendors or agents, in an amount limited to the
greater of DM 10,000,000 (DM ten million) for each individual occurrence or the
applicable limits of coverage under CONTRACTOR'S and subcontractor's insurance
for each individual occurrence; and,
20.4.2.4. in the event that CONTRACTOR is able to recover any sums from
one or more subcontractors, vendors or agents (after reasonable attempts in
accordance with AMD's reasonable instructions to collect the same), the amount
of these additional sums actually collected in order to fully compensate COMPANY
for its total consequential damages. CONTRACTOR may keep any amounts collected
under this Section 20.4.2.4 which exceed the amount necessary to fully
--------
compensate COMPANY.
20.4.3. Except for consequential damages referenced in Section 20.4.2.1 and
----------------
Section 20.4.2.2, the aggregate amount of all out-of-pocket liability (for which
-----------------
there is no recovery from CONTRACTOR'S insurance or from subcontractors, vendors
or agents or their insurers) incurred by CONTRACTOR for consequential damages,
including penalties which may be paid pursuant to Section 37.2, in connection
------------
with this Contract shall be limited to the sum of DM 35,000,000 (DM thirty-five
million).
Article 21
Insurance And Bank Guarantees
21.1 CONTRACTOR TO CARRY INSURANCE. CONTRACTOR shall not commence
-----------------------------
Construction Work under this Contract until CONTRACTOR has obtained all the
insurance required hereunder and the insurance certificates and/or certified
copies of the original policies evidencing the insurance have been reviewed by
COMPANY. COMPANY has the right to review the certificates or policies
54
evidencing the subcontractor's insurance. Review of the insurance by COMPANY
shall not relieve or decrease the liability of CONTRACTOR hereunder. In the
event any Construction Work under the Contract is performed by a subcontractor,
CONTRACTOR shall be responsible for any liability directly or indirectly arising
out of the Construction Work performed under the Contract by a subcontractor, to
the extent not covered by the subcontractor's insurance but limited, however, as
provided in Section 20.1.
------------
21.2 CONTRACTOR'S LIABILITY INSURANCE.
--------------------------------
21.2.1 LIABILITY COVERAGE. CONTRACTOR shall obtain and maintain
------------------
insurance coverage for the following claims which may arise out of the
performance of this Contract, whether resulting from CONTRACTOR'S operations or
by the operations of any subcontractor, anyone in the employ of any of them, or
by an individual or entity for whose acts they may be liable:
1. under applicable employer's liability law, bodily injury,
occupational sickness, disease or death claims of CONTRACTOR'S
employees;
2. bodily injury, sickness, disease or death claims for damages
to persons not employed by CONTRACTOR;
3. personal injury liability claims for damages directly or
indirectly related to the person's employment by CONTRACTOR or
for damages to any other person;
4. damage to or destruction of tangible property, including
claims for property other than the Construction Work itself;
5. bodily injury, death or property damage claims resulting from
motor vehicle liability in the use, maintenance or ownership of
any motor vehicle;
6. claims for bodily injury (Personenschaden), property damages
(Sachschaden) and financial losses (Vermogensschaden) arising
from Contractor's defeictve design work; and
7. claims for bodily injury and property damage (but not financial
losses) arising out of tortious conduct.
21.2.2 LIABILITY LIMITS. CONTRACTOR'S Liability Insurance as
----------------
required by this Section 21.2 shall be written for not less than the following
------------
limits of liability:
1. Employer's Liability Insurance. Employer's Liability
------------------------------
insurance (Betriebshaftpflichtversicherung) with a coverage of
not less than DEM1,500,000.
2. Comprehensive General and Automobile Liability Insurance.
--------------------------------------------------------
Contractor
----------
DEM7,500,000 each occurrence, combined single limit bodily
injury and property damage
DEM15,000,000 aggregate combined single limit bodily
injury and property damage
Subcontractors
--------------
55
DEM750,000 each occurrence, combined single limit bodily
injury and property damage
DEM1,500,000 aggregate combined single limit bodily injury
and property damage
21.3 INSURANCE CERTIFICATES. CONTRACTOR shall furnish, and shall make best
----------------------
efforts to cause each subcontractor to furnish, COMPANY insurance certificates
and/or certified copies of the original policies evidencing the insurance
specified herein. All insurance to be carried by CONTRACTOR shall be issued by
insurance companies qualified to issue such insurance in Germany that are
reasonably acceptable to COMPANY and maintained in force by CONTRACTOR so long
as CONTRACTOR is engaged in any work at the COMPANY'S Facility within the
purview of the Contract. Certificates should show type of insurance, operations
covered, effective dates, and dates of expiration and contain the following
statement:
"Thirty (30) days written notice of cancellation or change, to be
effective upon receipt thereof, shall be given to COMPANY, by sending notice
to Advanced Micro Devices, Inc., ATTN: Risk Manager, One AMD Place, Post
Office Box 3453, M/S 89, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, before any
cancellation or CONTRACTOR initiated change of this policy shall be
effective."
21.4 COMPANY AS ADDITIONAL INSURED. CONTRACTOR shall,and shall make best
-----------------------------
efforts to cause each Subcontractor to, name COMPANY, Advanced Micro Devices,
Inc and their respective officers, agents and employees as additional insureds
on CONTRACTOR'S and Subcontractors' liability policies for any claims arising
with respect to the negligence of CONTRACTOR or subcontractors relating to the
Construction Work performed under the Contract.
21.5 BUILDERS ALL RISK INSURANCE. COMPANY shall purchase and maintain
---------------------------
builders risk-type insurance upon the entire Project for the full cost of
replacement at the time of the loss. This insurance shall include as named
insureds COMPANY, CONTRACTOR and the subcontractors (generally as a class, but
not individually) and shall insure against loss from fire and extended coverage
perils, and shall include "All Risk" insurance for physical loss or damage
including, without duplication of coverage and to the extent available, at least
theft, vandalism, malicious mischief, transit, collapse, flood, earthquake,
testing and damage resulting from defective design, workmanship or material.
COMPANY will increase limits of coverage, if necessary, to reflect estimated
replacement cost. COMPANY will be responsible for any co-insurance penalties or
deductibles unless due to the fault or negligence of CONTRACTOR or any
subcontractor.
21.6 PERFORMANCE AND WARRANTY BANK GUARANTEES. CONTRACTOR shall provide a
----------------------------------------
performance bank guarantee in the amount of twenty percent (20%) of that portion
of the Budgeted Cost of the Work performed by CONTRACTOR (excluding design &
construction management services) and shall cause each subcontractor and vendor
to provide a performance bank guarantee in an amount equal to twenty percent
(20%) of that portion of the Budgeted Cost of the Work performed by each
subcontractor and vendor and shall provide a warranty bank guarantee in the
amount of five percent (5%) of that part of the actual Cost of the Work
performed by CONTRACTOR (excluding design & construction management services)
and shall cause each subcontractor or vendor to provide a warranty bank
guarantee in an amount equal to (i) in the case of a subcontract or purchase
order amount exceeding DEM5,000,000, five percent (5%) of the subcontract or
purchase order amount, and (ii) in the case of a subcontract or purchase order
amount between DEM500,000 and DEM5,000,000, ten percent (10%) of the subcontract
or purchase order amount, but in the case of a subcontract or purchase order
amount less than DEM500,000, no warranty bank guarantee shall be required. Each
bank guarantee shall satisfy the applicable criteria
56
for bank guarantees set forth in Schedule 21.6 & 21.7 attached hereto and made a
--------------------
part hereof and shall be reasonably satisfactory to COMPANY and to any lender or
lenders providing financing for the Project, issued by a bank reasonably
satisfactory to COMPANY and to any lender or lenders providing financing for the
Project. Each warranty bank guarantee shall be for a period equal to the lesser
of (x) two years, and (y) the period of the guarantee and warranty for the
items covered by such guarantee (e.g., the guarantee for rotating parts shall
have a term of one year) specified in Section 18.1.
------------
21.7 ADVANCE PAYMENT BANK GUARANTEES. CONTRACTOR shall provide, or shall
-------------------------------
cause each subcontractor and vendor to provide, an advance payment bank
guarantee in an amount equal to one hundred percent (100%) of each payment made
by COMPANY to CONTRACTOR prior to the date on which CONTRACTOR would be entitled
to receive such payment under the terms of this Agreement. Each advance payment
bank guarantee shall be procured by CONTRACTOR or any subcontractor or vendor
and delivered to COMPANY concurrently with the making of such advance payment.
Each advance payment bank guarantee shall satisfy each of the criteria for bank
guarantees set forth in schedule 21.6 & 21.7 and shall be satisfactory to
COMPANY and to any lender or lenders providing financing for the Project and
shall be issued by a surety reasonably satisfactory to COMPANY and to any lender
or lenders providing financing for the Project.
21.8 Assignment Of Subcontractors' Warranties And Bank Guarantees.
------------------------------------------------------------
CONTRACTOR hereby irrevocably assigns without restriction to COMPANY all of
CONTRACTOR'S right, title and interest in and to any and all warranty bank
guarantees and advance payment bank guarantees that CONTRACTOR holds for the
benefit of COMPANY and those provided by any subcontractor or vendor, and any
and all warranty claims and claims for performance CONTRACTOR may have against
its subcontractors, vendors, architects, building engineers, project planners
and any other building tradesmen and persons involved in the Project who have a
contractual relationship with CONTRACTOR. CONTRACTOR shall be obligated to
provide to COMPANY immediately after receipt all original performance guarantees
or warranty guarantees which CONTRACTOR receives from its subcontractors and
vendors. COMPANY grants to CONTRACTOR an entitlement, subject to revocation by
COMPANY, pursuant to which CONTRACTOR shall be entitled and obligated to assert
against all subcontractors and vendors the performance claims and warranty
claims under the subcontracts and purchase orders in its own name and at its own
cost. COMPANY may revoke this entitlement and obligation upon the occurrence of
(i) the filing of a petition for bankruptcy of CONTRACTOR, or (ii) termination
of the Contract, and may then itself assert the claims assigned to it against
the aforesaid subcontractors, vendors, architects, building engineers, project
planners, and other persons involved in the Project. This Section shall not be
deemed a waiver in any form whatsoever of any claims against CONTRACTOR under
this Agreement, provided any sums collected by COMPANY under this Section 21.8
-------- ------------
shall be set off against COMPANY'S claims against CONTRACTOR. CONTRACTOR shall
recognize, and hereby consents to, any assignment by COMPANY of its right, title
and interest in such guarantees to any lender or lenders providing financing for
the Project. CONTRACTOR shall direct the issuer of any bank guarantee to make
all payments directly to COMPANY. In the event of revocation of the
entitlement, CONTRACTOR shall hold any such proceeds received by CONTRACTOR in
trust for COMPANY and shall promptly pay to COMPANY any such proceeds received
by CONTRACTOR.
57
ARTICLE 22
CASUALTY CAUSING DAMAGE TO THE FACILITY
22.1 DAMAGE BEFORE SUBSTANTIAL COMPLETION OF FACILITY. In case the
------------------------------------------------
Facility or any portion thereof or any materials or equipment therefor should be
damaged, lost, or destroyed by reason of accidental deterioration or accidental
loss (such as, but not limited to, fire, flood, gusts of wind, earthquake, theft
or vandalism) before substantial completion of the Facility (as described in
Section 15.1), COMPANY shall have the right to require CONTRACTOR to forthwith
-------------
reconstruct, repair, or replace the work or materials so damaged, lost, or
destroyed. The cost thereof shall be a part of the Budgeted Cost of the Work,
the Project Budget shall be correspondingly increased by a Change Order, and the
Fee shall be adjusted in accordance with Section 16.10.
-------------
22.2 DAMAGE AFTER SUBSTANTIAL COMPLETION OF FACILITY. If damage, loss, or
-----------------------------------------------
destruction occurs by reason of accidental deterioration or accidental loss
after substantial completion of the Facility as provided in Section 15.1 hereof,
------------
COMPANY shall be responsible. The provisions of this Article 22 shall not
----------
affect CONTRACTOR'S obligations under Article 18 and Article 19 hereof.
---------- ----------
ARTICLE 23
PROTECTION OF PROPERTY
23.1 CONTRACTOR'S PROTECTION OF FACILITY. Until COMPANY has taken over the
-----------------------------------
Facility for operation or use, CONTRACTOR shall take all reasonable precautions,
including those related to security and to sanitation and health for the safety
of CONTRACTOR'S personnel and the personnel of others, to protect all work done
and all materials furnished under the Contract (including those furnished by
COMPANY for installation by CONTRACTOR, and regardless of whether the materials
have been erected or not) from loss or damage by the processes of construction,
by the action of the elements or by any other cause or causes; and after COMPANY
has taken over the Facility for operation or use, CONTRACTOR shall take all
reasonable precautions to protect the health and safety of CONTRACTOR'S
personnel and the personnel of others and the Facility and all portions thereof
from any and all loss or damage which CONTRACTOR or its subcontractors might
cause while making alterations, adjustments, repairs, or replacements or while
performing any other work at the job site. To the extent caused by CONTRACTOR,
its subcontractors or vendors, or their respective officers, agents or
employees, all loss or damage arising out of the processes of construction done
under the Contract, or from any defect in the Construction Work, or from the
action of the elements against which reasonable precautions were not taken,
shall be the responsibility of CONTRACTOR. CONTRACTOR shall also protect
COMPANY'S property which is not a part of the Facility from loss or damage which
might result either directly or indirectly, from CONTRACTOR'S and its
subcontractor's activities on COMPANY'S premises; and, if COMPANY should at any
time believe that the means provided by CONTRACTOR for protecting COMPANY'S
property are unsafe or inadequate, COMPANY shall have the right to require
CONTRACTOR to make them safe and adequate, and CONTRACTOR shall comply with such
requirement. However, neither the failure of COMPANY to make such demands nor
CONTRACTOR'S compliance with such demands, if made, shall in anyway relieve
CONTRACTOR from its liability for loss, damage, or injury resulting from the
operations of it or its subcontractors.
ARTICLE 24
PREPARATION OF THE FACILITY FOR OCCUPANCY AND TESTING
24.1 CONTRACTOR'S PREPARATION OF FACILITY. At such time as COMPANY may
------------------------------------
occupy or utilize the Facility for the installation of the Wafer Process
Equipment or in preparation for the conduct of any System Performance Test,
58
CONTRACTOR shall flush equipment as required (using suitable precautions to
prevent damage from freezing); check to see that all mechanical equipment and
electrical equipment relating to the Wafer Process Equipment or the system to be
tested in the Facility is in good working order and properly connected; make
preliminary run-ins of the various pumps and compressors relating to the Wafer
Process Equipment or the system to be tested in the Facility; purge equipment as
required, and perform all other tasks that shall be needed for preparing and
conditioning the Facility for installation of the Wafer Process Equipment or for
conduct of any System Performance Test using in such work all reasonable
precautions that may be necessary to prevent damage of any kind, from any cause
or causes, to the Facility or any part thereof or to any chemicals intended for
use therein. COMPANY shall furnish, at no cost to CONTRACTOR, all operating
personnel (other than vendors' or subcontractors' service engineers) needed to
operate equipment in the Facility which must be operated during the period that
the Facility is being prepared and conditioned for occupancy and testing as
aforesaid. Such personnel will perform their duties under CONTRACTOR'S
direction and COMPANY'S supervision, and CONTRACTOR will have a skilled operator
or operators present at the Site to furnish such direction and representation as
needed during said period on each shift when such work is being performed.
24.2 CALIBRATION OF INSTRUMENTATION. As a part of CONTRACTOR'S work in
------------------------------
preparing the Facility for installation of the Wafer Process Equipment and for
testing, CONTRACTOR shall calibrate all affected instruments and controls in the
Facility, through the full range, and make all other necessary adjustments
thereon using such skilled employees as shall be needed for this work, to insure
that each instrument and control is properly performing its required function or
functions. COMPANY may, if it so desires, place its own instrument employees on
the Facility to check and test instruments and controls to the extent COMPANY
considers desirable, and it is understood that said instrument employees shall
limit their work to the checking and performance testing of instruments and
controls. COMPANY'S employees shall report to CONTRACTOR'S chief instrument
supervisor all faulty equipment or installation errors found, and CONTRACTOR
shall make all necessary corrections and repairs. It is understood that neither
the presence of COMPANY'S instrument employees on the Facility nor their acts in
checking and performance testing of instruments and controls shall in any way
relieve CONTRACTOR of its complete responsibility for the operation of said
instruments and controls or of any other of its responsibilities under the
provisions of the Contract.
24.3 TAKE OVER FOR INSTALLATION OR TESTING. When the preparation of the
-------------------------------------
Facility for installation of the Wafer Process Equipment or for system testing
has been completed, CONTRACTOR shall so notify COMPANY and COMPANY shall then,
if it agrees that the preparation for installation of the Wafer Process
Equipment or for testing has in fact been completed and that all affected
mechanical and electrical equipment in the Facility is in good working order,
take over the Facility for installing the Wafer Process Equipment or take over
the system in question for conducting a System Performance Test and give
CONTRACTOR a written notice to this effect. However, neither this notice nor the
act of COMPANY in taking over the Facility or such system for conducting a
System Performance Test shall in any way relieve CONTRACTOR from its obligations
to finally complete the Facility; or from CONTRACTOR'S responsibility to alter,
adjust, repair, replace and otherwise correct workmanship or materials as
necessary to enable the Facility and each system within the Facility to
satisfactorily complete a System Performance Test and to meet and fulfill the
warranties and guarantees under the Contract, or from any other obligations or
responsibilities which extend beyond the preparation of the Facility for
installation of the Wafer Process Equipment or for testing or pertain to matters
arising after the issuance of said notice.
59
ARTICLE 25
SYSTEM PERFORMANCE TESTS
25.1 CONDUCT OF SYSTEM PERFORMANCE TESTS; REPAIRS. As soon as practicable
--------------------------------------------
after each system within the Facility shall have been properly prepared and
conditioned for operation, COMPANY shall bring such system on stream and shall
then make a system performance test (the "SYSTEM PERFORMANCE TEST") on such
system by operating it under approximately normal conditions of temperature,
pressure, capacity, vibration, cleanliness and all other appropriate operating
conditions prescribed by COMPANY for a period of seventy-two (72) consecutive
hours to demonstrate that all materials, equipment and machinery are in proper
working order and free from defects and that such system is operable under said
conditions of temperature, pressure, capacity, vibration, cleanliness and the
Facility Performance Criteria set forth in Exhibit A, and other appropriate
---------
operating conditions and that the clean room and clean areas satisfy the
cleanliness requirements. In the event of failure to demonstrate this on the
first or any subsequent attempt, CONTRACTOR shall make, at CONTRACTOR'S cost,
all alterations, adjustments, repairs, replacements or other corrections that
may be needed and, if it becomes necessary to shut down the Facility or any
portion thereof for the purpose of making alterations, adjustments, repairs,
replacements or other corrections or for any other reason before any System
Performance Test is satisfactorily completed, COMPANY at CONTRACTOR'S cost shall
service the Facility (or such portions thereof as are involved in or affected by
the shutdown) for resuming testing after said shutdown. Then, when the Facility
is again ready for testing, COMPANY shall bring the system on stream and shall
start a new System Performance Test. The foregoing procedure shall be repeated
as often as necessary until such system shall have operated continuously, and in
conformity with the Facility Performance Criteria and the Fab 30 Preliminary
Design and final design, for a period of the duration specified in the first
sentence of this Section 25.1 under normal conditions of temperature, pressure,
------------
capacity, vibration, cleanliness and the Facility Performance Criteria and the
Fab 30 Preliminary Design and final design; and the System Performance Test
shall thereby have been satisfactorily completed. It is understood that
CONTRACTOR shall be permitted to furnish, at its own expense, an observer to
witness any System Performance Test.
25.2 NOTICE OF SATISFACTORY COMPLETION. When any System Performance Test
---------------------------------
on a system within the Facility has been satisfactorily completed as specified
in Section 25.1 above, COMPANY shall notify CONTRACTOR to this effect in
------------
writing.
25.3 COORDINATION OF SYSTEMS. The parties acknowledge that CONTRACTOR will
-----------------------
complete, and COMPANY will test and accept, certain systems in the Facility
before other systems have been completed, tested and accepted. If one system,
that has already been completed, tested and accepted, operates in conjunction
with a second system, and if the balancing and coordination of the two systems
and the testing of the second system reveals defects in the first system, then
the first system shall be retested pursuant to Section 25.1 as if it had never
------------
been tested, and COMPANY'S previous acceptance of such defective system and
COMPANY'S previous notice of completion of the System Performance Test pursuant
to Section 25.2 shall be null and void and of no force or effect.
------------
25.4 STANDARDS OF OPERATION. At no time (whether during any System
----------------------
Performance Test or any other period) shall CONTRACTOR operate the Facility or
any part thereof in a manner which subjects any equipment to conditions of
temperature, pressure, excess particulates, vibrations or stress that are more
severe, in COMPANY'S opinion, than the maximum allowable operating conditions
for which the equipment was designed; nor shall any alterations, adjustments,
repairs, replacements or other corrections be made while the Facility or any
60
part thereof is in operation if, in COMPANY'S opinion, the safety of individuals
or equipment would be jeopardized by so doing; nor shall any part of the
Facility be continued in operation when, in COMPANY'S opinion, further operation
thereof would be hazardous to the safety of individuals or equipment.
25.5 SHUT DOWN PROCEDURE. The procedure for shutting down the Facility
-------------------
shall be in accordance with a standard mutually agreed upon by and between
CONTRACTOR and COMPANY.
ARTICLE 26
USE OF COMPLETED PORTIONS OF THE FACILITY
26.1 USE OF COMPLETED CONSTRUCTION PHASES. COMPANY reserves the right to
------------------------------------
occupy and use Construction Phases or systems within the Facility as they are
completed, including those Construction Phases or systems completed in advance
of other portions of the Facility, and such Construction Phases or systems may
be occupied or used pending completion of said other portions, provided that
-------- ----
such occupancy or use by COMPANY would not unduly interfere with CONTRACTOR'S
subsequent work on the Facility. CONTRACTOR shall complete the milestones in
the order of precedence designated by Section 14.1 above, prepare the
------------
Construction Phases for occupancy and testing, and turn same over to COMPANY for
operation or use in the aforesaid order of precedence. In such case COMPANY
shall give CONTRACTOR a separate notice on each occasion when it takes over any
such portion of the Facility for occupancy and testing. If any system in the
Facility has been substantially completed and all Punch List items affecting
such system, other than minor cosmetic matters (as described in Section 15.2.1),
--------------
have been completed, then the provisions of Section 18.1 regarding warranties
------------
and guarantees shall apply. It shall be understood, however, that neither
COMPANY'S taking over, or occupancy or use of, any portion or system of the
Facility, nor any notice given by COMPANY in connection therewith shall in any
way be construed to commit COMPANY to the acceptance of any Construction Work
not completed or furnished in accordance with the Design Documents pertaining
thereto, nor to constitute a Final Acceptance thereof nor to relieve CONTRACTOR
from its obligation to complete the Facility (if it is then not already
completed) or from any other unfulfilled obligations or responsibilities under
the Contract.
ARTICLE 27
CLOSING REPORT ON COST OF THE FACILITY
27.1 CLOSING REPORT. As soon as possible after substantial completion of
--------------
the Facility but, in any event, before COMPANY'S Final Acceptance thereof,
CONTRACTOR shall furnish COMPANY a detailed closing report showing the
apportionment of the costs for the Facility among the Construction Phases in
accordance with the closing report outline to be prescribed by COMPANY. In the
event that agreement between the parties cannot be reached on any matter that is
not covered by the above-mentioned outline concerning the detail or form of the
closing report, it shall be understood that applicable requirements for
apportionment of costs among the Construction Phases shall be defined in the
Project Procedures Manual.
ARTICLE 28
RECORD DOCUMENTS
28.1 DESCRIPTION OF RECORD DOCUMENTS. The record document is the written,
-------------------------------
printed, and drawn (including in electronic form) presentation of factual
information on the completed Project, defining what, how, and where
Construction Work was installed, together with any other relevant information,
including without limitation two sets of electronic media of all drawings and
specifications developed by CONTRACTOR or any subcontractor or vendor. The
purpose of record documents is to provide factual information which will
61
facilitate COMPANY'S future use, service, modification, and/or replacement of
completed Construction Work, and which complements information furnished under
Operation and Maintenance Data (defined in Section 29.1). CONTRACTOR must
-------------
submit record documents to COMPANY for review and approval prior to the covering
of any Construction Work. Such approval by COMPANY will constitute acceptance
of the record documents with respect to such covered Construction Work.
28.2 INFORMATION ON RECORD DOCUMENTS. Record drawings shall specifically
-------------------------------
show all items of Construction Work, regardless of specialty, included under
this Contract, location and runs of all mechanical systems, electrical and
drainage whether above or below ground, equipment locations and connections, all
structural elements, floor levels, yard paving and grade elevations, etc.
CONTRACTOR shall keep on Site two complete sets of prints of the record drawings
for the sole purpose of recording all changes in work and all subcontractors.
It shall be the responsibility of CONTRACTOR to enter appropriate information on
the master set as soon as the affected Construction Work is accomplished and to
determine that the subcontractor's set is also kept current. CONTRACTOR shall
make record drawing sets available at all times to COMPANY. Information entered
on record drawings shall be neat, legible and done in a draftsman-like manner in
English.
28.3 RECORDING DATA. CONTRACTOR shall record information concurrently with
--------------
construction progress and date all entries. CONTRACTOR shall make drawing
entries within two (2) working days after occurrence of any change or
installation requiring recording. Any concealed Construction Work covered
before recording data shall be uncovered as directed or as necessary to obtain
data. Accuracy of records shall be such that future reference will disclose
reliable information. CONTRACTOR shall make due care and all means necessary
(including appropriate measuring devices) to determine and record the required
information.
28.4 CONDUITS, PIPES, ETC.. In many cases on the Design Documents, the
---------------------
arrangement of conduits, pipes, ducts, and similar items is shown schematically
rather than as a precise scaled layout. CONTRACTOR shall identify the actual
location of these with field verified horizontal and vertical dimensions from
column lines, wall lines, or other permanent reference lines or points.
CONTRACTOR shall identify the depth of buried lines or other features by
relation to a datum elevation, using invert, centerline, top or bottom
elevation, and by slope or rate of fall if any.
28.5 FINALIZATION OF DOCUMENTS OTHER THAN DRAWINGS. If documents have been
---------------------------------------------
collected and retained in clear and complete condition and if entries thereon
are clear and neat, the collected copies may be accepted as final record
documents. Items not in acceptable condition shall be carefully transferred
with all notations or information to the new copy.
28.6 FINALIZATION OF DRAWINGS. CONTRACTOR shall obtain COMPANY'S review of
------------------------
the Project record print set on which information has been entered. After
COMPANY has approved the notated print set, CONTRACTOR shall carefully transfer
all notations, changes, data, and information to be the reproducible set.
CONTRACTOR shall emphasize entries or revisions by asterisks, encirclement by a
"cloud" around affected area, or other graphic device. When documents are
complete and assembled, CONTRACTOR shall obtain COMPANY'S review, participate in
review meeting(s) and make all changes in the documents as required or directed.
CONTRACTOR shall promptly deliver the approved final record documents to
COMPANY.
28.7 REMEDIES REGARDING RECORD DOCUMENTS. COMPANY shall have the right to
-----------------------------------
withhold portions of any progress payments due CONTRACTOR in the event the
record documents are not maintained current or are not submitted as specified.
The portions of progress payments withheld shall be reasonably related to the
62
work for which record documents have not been properly maintained or submitted.
If CONTRACTOR fails to comply with the foregoing duties within a reasonable time
set by the COMPANY, then COMPANY shall be entitled to produce the record
documents at the expense of CONTRACTOR.
ARTICLE 29
OPERATION AND MAINTENANCE DATA
29.1 SUBMITTAL OF OPERATION AND MAINTENANCE DATA. "OPERATION AND
-------------------------------------------
MAINTENANCE DATA" is a written, printed, and drawn (including in electronic
form) presentation of data describing the operation, maintenance, and repair of
products and systems installed in the Project. CONTRACTOR shall, prior to
submitting its final payment request, submit to COMPANY ten (10) sets of
Operating and Maintenance Data describing all products, units or systems
installed in the Project. Approved shop drawings or record documents may serve
this purpose, but may require amplification as required by COMPANY.
29.2 CONTENTS OF DATA. Contractor shall provide the following information:
----------------
29.2.1 Product name and specification section under which it was
included.
29.2.2 Manufacturer's trade or brand name, catalog or model number,
and serial number (where applicable).
29.2.3 Name, address and telephone number of the installing or
applying subcontractor.
29.2.4 Name, address and telephone number of local supplier or
manufacturer's representative.
29.3 DATA FOR EQUIPMENT AND SYSTEMS. For equipment and systems, CONTRACTOR
------------------------------
shall provide the following information:
29.3.1 Manufacturer's parts lists and spare parts recommendations.
29.3.2 Manufacturer's published performance ratings, curves or
tables.
29.3.3 Manufacturer's diagrams or drawings of control and power
wiring.
29.3.4 Control system diagrams and sequence of operation
descriptions, including identification of final field settings of control
points.
29.3.5 Testing, balancing, and adjusting tabulations and reports.
29.3.6 Valve identification lists.
29.3.7 Piping systems identification or color coding tabulations.
29.3.8 Manufacturer's printed operation and maintenance instructions,
including (1) recommendations for lubrication and intervals at which service
should be performed, (2) trouble shooting suggestions, (3) adjusting and repair
directions.
29.3.9 CONTRACTOR prepared typewritten instructions, drawings,
diagrams or other information as necessary to supplement, clarify, or complete
the information supplied by the manufacturer.
63
29.3.10 A copy of each warranty, bond, or service contract which
applies to a product and its installation.
ARTICLE 30
TAXES
30.1 TAXES ASSESSED AGAINST FACILITY. CONTRACTOR shall pay all taxes,
-------------------------------
assessments, excises, impositions, royalties, tariffs and licenses levied,
assessed, or imposed upon or on account of the execution of the work under the
Contract or CONTRACTOR'S receipts therefrom or on the materials furnished by
CONTRACTOR therefor or on the manufacture, storage, sale, receipts from sale,
use, tariffs, licenses, royalties, value added, transportation, inspection, or
delivery of said materials under any German Federal, state, or local law or
laws. CONTRACTOR shall be reimbursed by COMPANY for all such taxes and other
amounts (excluding interest or penalties, if any, connected therewith, and value
added taxes described in Section 16.2.3.10) paid under the Contract that are
-----------------
adequately documented if such documentation is delivered to COMPANY pursuant to
Clause 16.2.2.19.
----------------
30.2 TAXES AFFECTING EMPLOYEES. CONTRACTOR hereby accepts exclusive
-------------------------
liability for the payment to the respective State of Saxony and German Federal
Governments of all taxes, contributions, interest, and penalties provided in any
laws or in any applicable collective bargaining agreements with respect to the
wages and salaries paid to CONTRACTOR'S employees for services rendered in
connection with the Contract; and also agrees to require the subcontractors and
vendors to do likewise with respect to the wages and salaries paid to their
employees. CONTRACTOR shall be reimbursed by COMPANY for all such taxes and
contributions (excluding interest and penalties) that are adequately documented
if such documentation is delivered to COMPANY pursuant to Section 30.1.
------------
30.3 TAXES NOT PART OF BUDGETED COST. Taxes, assessments, excises and
-------------------------------
impositions shall not be a part of the Budgeted Cost of the Work and shall not
be utilized in calculating the Fee.
ARTICLE 31
LIENS [PFANDRECHT]
31.1 LIENS [PFANDRECHT]. CONTRACTOR shall prove with respect to movables
------------------
and rights which are not indivisibly connected with the real property that it
owns these movables and rights and that, in particular, there exist no rights of
third parties such as liens and the like. It is only after CONTRACTOR will have
furnished this proof that it may claim payment of costs of such movables or
rights hereunder. If there is, at any time, indication to COMPANY of the
existence of a lien as a result of which COMPANY will not be unrestricted owner
of the movables or rights, or will be liable because of such lien, or will be
subject to other claims of third parties, in particular without limitation, of
subcontractors or suppliers, CONTRACTOR shall reimburse the respective costs
payable by COMPANY in addition to the costs otherwise owed by COMPANY to
CONTRACTOR hereunder. COMPANY shall further be entitled, as long as CONTRACTOR
fails to prove that it owns the aforesaid movables or rights, to withhold any
such payment, unless mere payment of the Reimbursable Costs hereunder would lead
to the extinguishment of the lien on the movable or right by operation of law.
The proof to be furnished by CONTRACTOR shall consist of a respective written
waiver of respective liens issued by its supplier or subcontractor and of a
declaration of CONTRACTOR'S supplier or subcontractor according to which it
already transferred to CONTRACTOR full title to the movable or the right. Also
proof of full payment of the subcontractor or supplier for the respective
movable or right shall be deemed to be such proof, unless the agreement with the
third party contains further rights.
64
ARTICLE 32
PATENTS AND CONFIDENTIALITY
32.1 CONTRACTOR'S RESPONSIBILITY. Subject to the provisions of Section
--------------------------- -------
32.2, CONTRACTOR shall pay all royalties and license fees, and shall indemnify,
----
save harmless and defend COMPANY from and against any action or suit which may
be brought against COMPANY at any time for infringement of any patent or patents
or for wrongful use of proprietary information of any third party allegedly
relating to or arising from the Facility or any element or combination of
elements thereof, furnished hereunder by CONTRACTOR, its subcontractors or
vendors, or to the use of the Facility or any element or combination of elements
thereof, or to the performance of any work hereunder; provided, however, that
COMPANY promptly notifies CONTRACTOR in writing of the institution of such
action or suit and permits CONTRACTOR to control its defense. CONTRACTOR shall
pay all costs and expenses of any such action or suit, including compensation
and expenses of experts and counsel of its choice and selection, and CONTRACTOR
shall also pay and save COMPANY free and harmless from any damages or other sums
awarded or assessed in any such action or suit. COMPANY may be represented by
counsel of its own selection at its own expense, and agrees to cooperate fully
in the defense of any such action or suit and to furnish all the evidence in its
control.
32.2 DESIGN PROCESS. CONTRACTOR does not assume any obligation hereunder with
--------------
respect to infringement of any patent arising solely from CONTRACTOR'S adherence
to COMPANY'S written instructions or directions which involve the use of
elements or combinations of elements. COMPANY shall indemnify, defend and hold
harmless from and against any action or suit which may be brought against
CONTRACTOR at any time for infringement of any patent or patents of any third
party allegedly relating to or arising from any element or combination of
elements which COMPANY directed CONTRACTOR to use; provided, however, that
CONTRACTOR promptly notifies COMPANY in writing of the institution of such
action or suit and permits COMPANY to control its defense. COMPANY shall pay
all costs and expenses of any such action or suit, including compensation and
expenses of experts and counsel of its choice and selection, and COMPANY shall
also pay and save CONTRACTOR free and harmless from any damages or other sums
awarded or assessed in any such action or suit. CONTRACTOR may be represented
by counsel of its own selection at its own expense, and agrees to cooperate
fully in the defense of any such action or suit and to furnish all the evidence
in its control. COMPANY'S acceptance of CONTRACTOR'S designs shall not be
considered COMPANY'S written instructions or directions under this Section.
32.3 REPLACEMENT OF INFRINGING ITEM. With respect to claims within Section
------------------------------ -------
32.1, CONTRACTOR shall, at its expense, (i) replace any infringing
----
item with a non-infringing item, (ii) modify such infringing item to make it
non-infringing, provided that any such replacement or modification is of equal
performance and quality to the original and that it shall not unreasonably
interfere with COMPANY'S use of the Facility, or (iii) by license or other
release from claim of infringement procure for COMPANY'S benefit the right to
use such item.
32.4 CONFIDENTIALITY. In connection with work performed pursuant to this
---------------
Contract, CONTRACTOR and COMPANY may receive confidential, Proprietary
Information (defined in Section 32.4.1 below) used in each other's operations.
--------------
The parties shall, and shall cause their subcontractors and vendors, and their
respective agents, employees, principals, representatives and officers, to (i)
not use, directly or indirectly, and maintain in strictest confidence all such
information received directly or indirectly from the other party, (ii) not
disclose such information to any third party without the disclosing party's
prior written consent, and (iii) use such information only for design, material
procurement, construction, alteration, maintenance, repair and
65
operation of COMPANY processes or equipment as required under this Contract.
Each party shall, and shall cause its subcontractors and vendors to, restrict
access to such information to those of their respective employees who have a
reasonable need for such information in carrying out their respective duties on
behalf of CONTRACTOR pursuant to this Contract and who have agreed to maintain
such information in confidence. All persons issued CONTRACTOR badges shall
execute confidentiality agreements in form satisfactory to COMPANY.
32.4.1 PROPRIETARY INFORMATION. As used herein "PROPRIETARY
-----------------------
INFORMATION" refers to all information relating to processes, operations, plans,
products, know-how, equipment or trade secrets or other technical data, policies
or agreements, including this Contract, or any other information of a
confidential nature and all documents, instruments, data, reports,
interpretations, statements, projections, forecasts and other information
(including the Fab 30 Preliminary Design and all Contract Documents) concerning
COMPANY or any company owning, owned by or under common ownership with COMPANY
(an "AFFILIATE"), or concerning CONTRACTOR or any subcontractor or vendor,
whether furnished before or after the date hereof, and regardless of whether
such information is furnished in writing, electronically, orally or in some
other manner, and whether furnished by COMPANY, or its Affiliates or CONTRACTOR
or any subcontractor or vendor, or their respective directors, officers,
employees, representatives, contractors, subcontractors, vendors, managers,
agents, controlling persons, engineers, attorneys, accountants and consultants
(such directors, officers, employees, representatives, contractors,
subcontractors, vendors, managers, agents, controlling persons, engineers,
attorneys, accountants and consultants being referred to herein, collectively,
with respect to any person as such person's "ADVISORS") which contain or
otherwise reflect such information. Notwithstanding the foregoing, Proprietary
Information does not include information which (a) is or becomes generally
available to the public other than as the result of disclosure by COMPANY or its
Affiliates or CONTRACTOR or any subcontractor or vendor, or their respective
Advisors, or (b) was available on a non-conditional basis prior to its
disclosure by COMPANY or its Affiliates or CONTRACTOR or any subcontractor or
vendor, or their respective Advisors.
32.4.2 HOLD IN CONFIDENCE. Both COMPANY and CONTRACTOR shall, and
------------------
shall cause their Advisors and all subcontractors and vendors and their
respective Affiliates and Advisors to, hold and treat all Proprietary
Information in confidence and not disclose or reveal to any person (except for
those Advisors employed by CONTRACTOR or COMPANY who are actively and directly
participating in the Project and have a need to know such Proprietary
Information). Each party shall cause such persons to observe the terms of
this Agreement, and will take appropriate action to ensure that it and its
Advisors will act in accordance herewith and will not use Proprietary
Information for any purpose other than for the Project. Each party shall take
all steps which may be necessary or appropriate in order that its officers,
agents and employees and all subcontractors, vendors and consultants are bound
by the provisions of this Article. Appropriate clauses to carry out the purpose
and intent hereof shall be included in all subcontracts, purchase orders and
consulting agreements entered into by CONTRACTOR pursuant to the performance of
this Contract.
32.4.3 ANNOUNCEMENTS. CONTRACTOR shall not make any announcements or
-------------
release any information or photographs concerning this Contract or COMPANY or
the Project to any person, including without limitation any member of the public
or the press or any official body, without COMPANY'S prior written consent.
COMPANY'S Project Manager is designated by COMPANY as responsible for
authorizing any such announcement or release of information. COMPANY may
withhold its consent in its good faith business judgment.
66
ARTICLE 33
COMPANY'S RIGHT TO TAKE OVER THE WORK
33.1 COMPANY'S OPTION. COMPANY reserves the right at any time prior to
----------------
completion of CONTRACTOR'S work hereunder to take over the balance of the work
to be performed hereunder and complete same with COMPANY'S labor forces and some
or all of CONTRACTOR'S subcontractors and vendors not then in default, by giving
CONTRACTOR at least ten (10) working days prior written notice as to the
effective date of such takeover. CONTRACTOR shall turn over to COMPANY the
Site, the Construction Work and all Design Documents, and other matter that
CONTRACTOR may have prepared for the Facility and all materials and supplies
paid for by COMPANY either directly or indirectly, and COMPANY shall have the
right to make use of the Design Documents, materials and supplies for such
purposes as COMPANY may desire in accordance with Section 4.11. Also, upon such
------------
termination COMPANY shall either (i) accept CONTRACTOR'S commitments under
unfulfilled purchase orders theretofore issued by CONTRACTOR in good faith in
connection with the work included under the Contract and uncompleted
subcontracts for work included under the Contract which CONTRACTOR may have
theretofore entered into with the consent of COMPANY, other than purchase orders
and subcontracts in default; and CONTRACTOR shall execute and deliver all such
papers and take all such steps, including the legal assignment of its
contractual rights, as COMPANY may require for the purpose of fully vesting in
itself the rights and benefits of CONTRACTOR under such purchase orders and
subcontracts; or (ii) reimburse CONTRACTOR for all costs reasonably incurred by
CONTRACTOR in respect of subcontracts and purchase orders not in default and not
accepted by COMPANY, pursuant to Section 33.2.
------------
33.2 REIMBURSEMENT OF CONTRACTOR. In the event of termination of the
---------------------------
Contract pursuant to Section 33.1 above, COMPANY shall pay CONTRACTOR in
------------
accordance with the terms of Section 35.1 hereof for all work which has been
------------
performed, and shall pay CONTRACTOR a pro rata share of CONTRACTOR'S Fee as set
forth in Section 35.1, less all damages, losses, claims, cost and expense
------------
suffered or incurred by COMPANY in connection with any Default or Event of
Default by CONTRACTOR under Section 36.1 below. All Reimbursable Costs
------------
reasonably incurred by CONTRACTOR after such termination in respect of work not
yet performed shall be reimbursed. Payments which CONTRACTOR is obligated to
make to subcontractors and vendors whose subcontracts and purchase orders are
not accepted by COMPANY and to workers exclusively hired for the work on the
Facility shall also be reimbursed. CONTRACTOR shall use its best efforts to
obtain in every subcontract and purchase order and all exclusive hires a right
to terminate such subcontract, purchaser order or exclusive hire in the event
COMPANY takes over the work pursuant to Article 33 or Article 36 at no
---------- ----------
additional cost. CONTRACTOR shall take all reasonable steps to minimize such
costs incurred by reason of COMPANY taking over the work.
33.3 GUARANTEES. CONTRACTOR shall be obligated for all warranties and
----------
guarantees under the Contract applying to the portion of the work completed
prior to the termination of CONTRACTOR'S work.
ARTICLE 34
COMPANY'S RIGHT TO SUSPEND WORK
34.1 COMPANY'S RIGHT TO SUSPEND PROJECT. Company shall have the right, at
----------------------------------
its sole discretion, to suspend the performance of all or any part of the
Project at any time and shall give CONTRACTOR prompt written notice thereof.
Upon receipt of such notice, CONTRACTOR shall proceed with the orderly cessation
of work to accomplish such suspension and take such steps as will protect and
preserve the work completed and permit the resumption of the work upon
termination of the period of suspension.
34.2 SUSPENSION UPON COMPANY'S NOTICE. CONTRACTOR shall, upon written
--------------------------------
67
notice from Company, suspend performance of all or any portion of the work on
the Project for such time or times and in such manner as Company may specify in
such notice. Upon receipt of any such notice, Contractor shall, unless the
notice requires otherwise:
34.2.1 As soon as possible discontinue work to the extent specified
in the notice.
34.2.2 Continue to preserve and maintain at the Site any materials
and supplies furnished or used in the performance of the Construction Work, to
the extent specified in such notice.
34.2.3 Continue to prosecute and perform any work that is not
suspended.
34.2.4 Take all necessary measures to mitigate and minimize the
effect of the suspension on any costs incurred or to be incurred by Contractor
or Company.
34.3 COMPENSATION FOR SUSPENSION. As full compensation for such
---------------------------
suspension, Contractor shall be reimbursed for all costs reasonably incurred as
a result of the suspension, including but not limited to:
34.3.1 The reasonable costs, incurred by virtue of the suspension,
for the storage and maintenance of Contractor's personnel and materials at the
Site on a standby status. Compensation for equipment on standby shall be
determined in accordance with Section 8.5.
-----------
34.3.2 The reasonable costs of mobilizing and demobilizing any
equipment and work forces.
34.3.3 An equitable adjustment for any increase in the cost to
Contractor of subsequently performing any suspended work.
34.4 RESUMPTION OF WORK. Upon receipt of written notice to resume
------------------
suspended work, Contractor shall as soon as possible resume performance of the
suspended work to the extent required in the written notice. In the event of
the resumption of work, Contractor shall be entitled to reimbursement of extra
costs incurred through the delay resulting from the suspension. The Budgeted
Costs shall be increased by the costs of suspension and the extra costs incurred
after resumption of the work. Any claim on the part of CONTRACTOR for
compensation shall be made within twenty (20) working days after receipt of
notice to resume work. However, no additional compensation or extension of time
shall be granted if suspension resulted from CONTRACTOR'S noncompliance with the
requirements of this Contract.
34.5 TERMINATION FOLLOWING SUSPENSION. In the event such suspension were
--------------------------------
to continue for more than 183 consecutive calendar days, either party shall have
the option of terminating this Contract. In case of such termination,
CONTRACTOR shall deliver, and COMPANY and any Affiliate of Company shall have
the right to make use for the completion of the work and the other purposes
identified in Section 4.11 of all Design Documents, including without limitation
------------
all plans, specifications, drawings, data sheets, and other matters that
CONTRACTOR has prepared for the Facility, as set forth in Section 4.11. To the
------------
extent subcontractors, vendors or others have an interest in any such Design
Documents, CONTRACTOR shall comply with Section 4.11 regarding the assignment
------------
and conveyance by such subcontractors, vendors and others of the rights of use
specified in Section 4.11 to COMPANY or COMPANY'S Affiliate. Upon such
termination and payment as herein provided, title to all materials, work in
process and other things procured or produced by CONTRACTOR under this Contract
(except construction equipment owned by CONTRACTOR) shall vest in COMPANY. Upon
such termination, COMPANY shall be
68
responsible for the reasonable cost of settling and paying claims arising under
CONTRACTOR'S commitments under all unfulfilled purchase orders theretofore
issued by CONTRACTOR in good faith in connection with the work included under
the Contract and all uncompleted subcontracts for work included under the
Contract which CONTRACTOR may have theretofore entered into with the consent of
COMPANY; and if COMPANY requests, CONTRACTOR shall execute and deliver all such
papers and take all such steps, including the legal assignment of its
contractual rights, as COMPANY may require for the purpose of fully vesting in
itself the rights and benefits of CONTRACTOR under such purchase orders and
subcontracts. In the event of such termination, COMPANY shall reimburse
CONTRACTOR pursuant to Section 35.1 as if the termination had occurred
------------
pursuant to Article 35.
----------
ARTICLE 35
TERMINATION FOR CONVENIENCE OF COMPANY
35.1 TERMINATION BY COMPANY. COMPANY may, at any time, for any reason
----------------------
whatsoever, whether or not CONTRACTOR is in default, and without notice to
CONTRACTOR'S sureties, if any, terminate the Contract in whole or in part by
giving written notice to CONTRACTOR specifying the part or parts of the work to
be terminated and the effective date of the termination. Upon any such
termination, CONTRACTOR shall discontinue work as soon as possible and minimize
associated costs of termination. Provided such termination is not due to
CONTRACTOR'S Default, COMPANY shall reimburse CONTRACTOR for all reasonable
costs and expenses incurred by CONTRACTOR by virtue of such termination,
including but not limited to:
35.1.1 (i) All amounts due in accordance with Section 16.2 hereof and
------------
not previously paid to CONTRACTOR for work completed in accordance with this
Contract prior to or in connection with such notice, and for work thereafter
completed as specified in such notice, plus (ii) a pro rata share of
CONTRACTOR'S Fee which shall be the portion of the Budgeted Fee earned to the
termination, calculated as follows:
Net COW
------------- X Budgeted Fee = Portion of Budgeted Fee
Budgeted COW
Where:
Net COW means Actual Cost of the Work incurred through the termination plus
any reasonable costs that cannot be avoided by cancellation of contracts and
purchase orders;
Budgeted COW means the Budgeted Cost of the Work;
and (iii) if CONTRACTOR is not then in default hereunder, a reasonable sum,
under all of the circumstances, reflecting any Project Budget cost savings
realized through the date of such termination.
35.1.2 The reasonable cost of settling and paying claims arising out
of the termination of work under subcontracts or purchase orders as hereinafter
provided. CONTRACTOR shall use its best efforts to obtain in every subcontract
and purchase order the right to terminate such subcontracts and purchase orders
in the event COMPANY terminates the Contract pursuant to this Article 35 or
----------
Article 36 at no additional cost.
----------
35.1.3 Any other reasonable costs actually incurred by CONTRACTOR
incidental to such termination of work.
35.1.4 A deduction or offset for all damages, losses, claims, cost
and expense suffered or incurred by COMPANY in connection with any Default or
69
Event of Default by CONTRACTOR under Article 36 below.
----------
Except for the foregoing compensation CONTRACTOR waives any claims for damages
on account of such termination.
35.2 ACTIONS UPON RECEIPT OF NOTICE. Upon receipt of any such notice of
------------------------------
termination, CONTRACTOR shall:
35.2.1 As soon as possible discontinue work on the date and to the
extent specified in the notice.
35.2.2 Deliver to COMPANY copies of all Design Documents, including
without limitation all plans, specifications, drawings and data sheets and all
data, reports, completed work, work in process, and such other information and
materials relating to the terminated part of the work as may have been acquired
or prepared by CONTRACTOR in connection with this Contract for COMPANY'S or any
Affiliate's use in accordance with Section 4.11.
------------
35.2.3 Continue to prosecute and perform any unterminated part of the
work.
35.2.4 Remove its personnel and subcontractors and construction
outfit from the Site as to the terminated part of the Work.
CONTRACTOR shall take all necessary measures to mitigate and minimize the effect
of the termination on any costs incurred or to be incurred by CONTRACTOR or
COMPANY.
35.3 GUARANTEES FOLLOWING TERMINATION. In the event of termination of the
--------------------------------
Contract pursuant to Section 35.1 above, CONTRACTOR shall be obligated for all
------------
warranties and guarantees under the Contract applying to the portion of the work
completed prior to the termination of CONTRACTOR'S work. This section shall
also apply in the event of a termination pursuant to Section 34.5.
------------
ARTICLE 36
DEFAULT BY THE CONTRACTOR
36.1 EVENTS OF DEFAULT. If any or all of the work to be performed under
-----------------
this Contract is abandoned by CONTRACTOR; or if the Contract is assigned in
violation of the provisions hereof; or if any work is subcontracted by
CONTRACTOR without any required approval of COMPANY; or if CONTRACTOR becomes
insolvent or unable to meet its payroll or other current obligations, or is
adjudicated a bankrupt, or has an involuntary petition in bankruptcy filed
against it, or makes an assignment for the benefit of creditors, or files a
petition for an arrangement, composition or compromise with its creditors under
any applicable laws, or has a receiver, trustee or other officer appointed to
take charge of its assets; or if CONTRACTOR persistently disregards applicable
laws or ordinances; or if CONTRACTOR fails, except in cases beyond its control,
to supply enough properly skilled workers or proper materials or to prosecute
the Construction Work with promptness and diligence; or if COMPANY determines
that the Project Schedule is not being maintained or that CONTRACTOR is
violating any of the conditions or provisions of this Contract; or if CONTRACTOR
refuses or fails to perform properly any portion of the work in accordance with
the terms of this Contract (any of the foregoing, a "DEFAULT"), and if, within
ten (10) working days after receipt of a written notice of default from COMPANY,
CONTRACTOR fails to remedy such Default or to provide satisfactory evidence that
such Default will be corrected as soon as possible (an "EVENT OF DEFAULT"),
COMPANY may take over the work and/or withhold any amounts otherwise due under
the Contract and/or terminate by written notice the Contract without thereby
releasing CONTRACTOr from any of its obligations or liabilities under the
Contract, or affecting the rights conferred on COMPANY by the Contract.
70
36.2 COMPANY'S RIGHT TO TAKE OVER WORK. Upon such Event of Default,
---------------------------------
Company may take possession of the Site, the Construction Work and of all plans,
specifications, drawings, data sheets, materials, supplies, construction
equipment and tools, construction outfit, subcontracts, purchase orders, and
facilities thereon and use them to finish the work by whatever method COMPANY
may deem expedient and dispose of them in partial satisfaction of any
obligations due from CONTRACTOR to COMPANY. In such case, COMPANY at its option
may accept CONTRACTOR'S commitments under all unfulfilled purchase orders
theretofore issued by CONTRACTOR in good faith in connection with the work
included under the Contract and all uncompleted subcontracts for work included
under the Contract which CONTRACTOR may have theretofore entered into, with the
consent of COMPANY; and upon COMPANY'S request, CONTRACTOR shall execute and
deliver all such papers and take all such steps, including the legal assignment
of its contractual rights, as COMPANY may require for the purpose of fully
vesting in itself the rights and benefits of CONTRACTOR under such purchase
orders and subcontracts. In the event COMPANY demands of CONTRACTOR the
assignment of contractual claims against subcontractors or vendors or otherwise
against third parties, COMPANY shall in return, be obliged to assume the
obligations under such subcontracts or purchase orders that arise after such
assignment takes effect.
36.3 COMPANY'S RIGHT TO COMPLETE WORK. Upon such termination or
--------------------------------
withholding, COMPANY shall have the right to complete any work by whatever
method COMPANY may deem expedient, including employing another contractor under
such form of contract as COMPANY may deem advisable or having COMPANY provide
any labor or materials and perform any part of such work that has been
terminated. COMPANY shall not be required to obtain proposals for completing
such work, but may make such reasonable expenditures as in COMPANY'S judgment,
taking into account the duty to minimize damages, will best accomplish such
reasonable completion of the Facility. The expense of completing such work
(above the Budgeted Cost of the Work), together with a reasonable charge for
administering any contract for such completion, will be charged to CONTRACTOR,
and such expense will be deducted by COMPANY from such monies as may be due or
may at any time thereafter become due to CONTRACTOR. In case such expense
exceeds the sum which would have otherwise been payable under this Contract,
CONTRACTOR shall be liable for and shall upon notice from COMPANY promptly pay
to COMPANY the amount of such excess. COMPANY shall not be liable for any
damages on account of such termination.
36.4 CONTRACTOR'S ACTION UPON RECEIPT OF NOTICE. Upon receipt of any such
------------------------------------------
written notice of termination of right to proceed, CONTRACTOR shall:
36.4.1 DISCONTINUE WORK. As soon as possible discontinue work on the
----------------
date and to the extent specified in the notice.
36.4.2 DELIVER DESIGN DOCUMENTS, ETC. Deliver to COMPANY, the Site
-----------------------------
and any plans, specifications, drawings, data sheets, data, reports, completed
work, work in process, and such other information and materials relating to the
terminated work as may have been acquired or prepared by CONTRACTOR hereunder.
CONTRACTOR shall not have any right to withhold the aforesaid documents.
36.4.3 PERFORM UNTERMINATED WORK. Continue to prosecute and perform
-------------------------
any unterminated part of the work.
36.4.4 REMOVAL OF OUTFIT. Remove from the Site CONTRACTOR'S and any
-----------------
subcontractor's or vendor's construction outfit, temporary buildings and
materials as set forth in said notice.
71
36.5 REMEDIES CUMULATIVE. The rights and remedies of COMPANY provided by
-------------------
this provision of the Contract are in addition to any and all other rights and
remedies provided by law or under this Contract, and nothing contained herein
shall prejudice the rights of COMPANY to take whatever action it may deem
necessary or appropriate to obtain the satisfactory performance of this
Contract. This shall not, however, under any circumstances be construed to
entitle COMPANY to lost profits.
36.6 Limits On Amount Payable To Contractor. Should COMPANY invoke its
--------------------------------------
termination rights pursuant to this Article 36, any amount payable to CONTRACTOR
----------
shall not cause the Budgeted Cost of the work to be exceeded, nor shall it
exceed an amount calculated as follows:
36.6.1 Take the Reimbursable Costs incurred by CONTRACTOR to the date
of termination.
36.6.2 Add a portion of the CONTRACTOR'S Budgeted Fee computed upon
the percentage of Construction Work completed to the date of termination.
36.6.3 Subtract the aggregate of previous payments made by COMPANY.
36.6.4 Subtract any compensation for losses, damages, liabilities,
claims, expenses and other costs suffered or incurred by COMPANY in connection
with CONTRACTOR'S default.
COMPANY shall also pay CONTRACTOR fair compensation, either by purchase or
rental at the election of COMPANY, for any equipment owned by CONTRACTOR which
COMPANY elects to retain and which is not otherwise included in the Cost of the
Work under Section 36.5.1.
--------------
ARTICLE 37
PENALTY CLAUSE
37.1 DAMAGES FOR DELAY IN SUBSTANTIAL COMPLETION OF FACILITY.
-------------------------------------------------------
CONTRACTOR shall substantially complete the Facility in a timely manner and not
later than the Latest Date For Substantial Completion Of The Facility. For each
Delay Week (defined below) or portion thereof by which CONTRACTOR culpably
exceeds the Latest Date For Substantial Completion Of The Facility, CONTRACTOR
shall pay COMPANY a contract penalty in the amount listed below:
Week Following The Week Amount of Contract Cumulative
Ending On The Latest Date Penalty Payable Contract Penalty
For Substantial Completion That Week
Of The Facility
----------------------------- ---------------------- ---------------------------------
1st Week -0- -0-
2nd Week DEM500,000 DEM500,000
3rd Week DEM750,000 DEM1,250,000
4th Week DEM750,000 DEM2,000,000
5th Week + Later Weeks DEM1,000,000
/week
37.2 PAYMENT OF CONTRACT PENALTY. CONTRACTOR shall pay COMPANY the
---------------------------
foregoing sums as contract penalty (and COMPANY shall have the right to offset
the foregoing sums against any amounts owed by COMPANY to CONTRACTOR) for each
week beyond the Latest Date For Substantial Completion Of The Facility that the
Facility remains substantially uncompleted. Each week (a "DELAY WEEK") shall
commence on the day of the week following the day on which the Latest Date For
Substantial Completion Of The Facility occurred, and if
72
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
------- ----
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
---------------------------
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
------------ ------------
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
------------
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
-----------------------------
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
------------------------------
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
-----------------------
Contract, CONTRACTOR shall have violated any laws, rules, orders, regulations,
or ordinances applicable to the work hereunder, then CONTRACTOR
73
shall indemnify and save COMPANY harmless from all damages or penalties paid by
COMPANY or imposed upon COMPANY resulting from any such violation committed by
CONTRACTOR or its subcontractors, vendors or their respective officers, agents,
representatives or employees in such execution or performance of the work
hereunder.
38.3 CHOICE OF LAW. This Agreement and the Contract (including without
-------------
limitation the enforcement of all rights and duties of the parties arising from
or relating in any way to the subject matter of the Contract) and the
relationship of the parties arising out of the Project and all disputes and
claims, whether in contract, tort, or otherwise regarding the Project, shall be
governed by, interpreted and construed in accordance with the internal laws of
Germany (including the enforcement of all rights and duties of the parties
arising from or relating in any way to the subject matter of this Agreement),
without regard to conflict of laws principles that would cause the law of
another jurisdiction to be applied.
38.4 DISPUTES; ARBITRATION.
---------------------
38.4.1 RESOLUTION OF DISPUTES BY ARBITRATION. All disputes between
-------------------------------------
CONTRACTOR and COMPANY regarding this Agreement or the Contract (including
without limitation the enforcement of all rights and duties of the parties
arising from or relating in any way to the subject matter of the Contract) or
the relationship of the parties arising out of the Project and all disputes and
claims, whether in contract, tort, or otherwise regarding the Project, shall be
resolved by binding arbitration in accordance with this Section 38.4. Every
------------
subcontract and purchase order shall obligate the subcontractor and vendor to
consent to their joinder in any such arbitration proceeding between COMPANY and
CONTRACTOR and to resolve all disputes of the nature described in this Section,
including without limitation disputes involving the subcontract or purchase
order, by binding arbitration in accordance with this Section 38.4, and
------------
CONTRACTOR and COMPANY may intervene as a matter of right therein. Any such
disputes, however, shall not entitle CONTRACTOR to suspend or discontinue work
on the Project.
38.4.2 PLACE OF ARBITRATION. Any arbitration shall be conducted in
--------------------
Paris, France. After consultation with the parties, the arbitrators shall
select the time, date and place in Paris, France at which each session of the
arbitration shall take place. The parties and their counsel shall be notified
in writing by the arbitrators of such times, dates and places.
38.4.3 EXCLUSIVE JURISDICTION. The International Chamber of Commerce
----------------------
of Paris, France shall have exclusive jurisdiction over all such disputes.
Except as provided herein, the rules and procedures set forth in
the International Chamber of Commerce Rules Of Conciliation And Arbitration
shall govern all such arbitration proceedings.
38.4.4 SELECTION OF ARBITRATORS. All such disputes shall be heard
------------------------
and decided by a panel of three arbitrators, one arbitrator to be named by the
party bringing the action, one arbitrator to be named by the party defending
such action and the presiding arbitrator to be named by the two arbitrators
appointed. If the two appointed arbitrators cannot select the third arbitrator
within forty-five (45) calendar days after the later appointment of the two, the
third arbitrator shall be selected by the International Chamber of Commerce in
Paris, France. All arbitrators shall be independent of both CONTRACTOR and
COMPANY. The arbitrators selected by CONTRACTOR and COMPANY shall have at least
fifteen (15) years experience in the area or areas that are the subject matter
of the arbitration. Additionally, the third arbitrator shall have at least
fifteen (15) years experience as an attorney practicing German law and shall
have experience in the practice of American law at least equivalent to an LL.M.
degree. If an arbitrator is unable to perform his task due to death,
resignation or any other reason which renders participation in the proceedings
impossible, he shall be replaced by an arbitrator to be
74
appointed according to the foregoing provisions.
38.4.5 LANGUAGE OF PROCEEDINGS. The exclusive language of all
-----------------------
arbitration proceedings shall be English.
38.4.6 APPLICABLE LAW. All decisions shall be based upon the
--------------
internal law of Germany and the German Code of Civil Procedure (excluding
Private International Law Rules), without regard to conflict of laws principles,
and the arbitrators shall be bound to apply such law.
38.4.7 ARBITRATION AWARD. The arbitration award shall be in English,
-----------------
shall state the arbitrators' reasons for their decision and shall award to the
prevailing party reasonable costs and expenses, including reasonable travel
costs, administrative expenses, costs of appeal (to be determined following the
conclusion of any appeal), expert witness fees, reasonable fees of the
arbitrator, and reasonable attorneys' fees incurred by virtue of the arbitration
proceedings. Any resulting award shall be final and rendered in such form that
judgment may be entered thereon in any court of competent jurisdiction. The
arbitrators shall prepare findings of fact and conclusions of law, applying the
internal laws of Germany. With the exception of requesting judicial review of
the award for errors of law, the award is not subject to judicial review.
However, the prevailing party may petition a court to award costs of enforcing
the arbitration award to the prevailing party. Under no circumstances shall
arbitrators modify or deviate from the provisions of the Contract.
38.4.8 PROVISIONAL REMEDIES. Nothing in this section shall be
--------------------
construed to preclude either party from seeking provisional remedies, including
but not limited to, temporary restraining orders and preliminary injunctions,
from any court of competent jurisdiction, to protect its rights pending
arbitration but such preliminary relief shall not be sought as a means of
avoiding arbitration.
38.5 CONTRACT MADE IN ENGLISH. This Contract has been made and executed in
------------------------
the English language and in a German translation. In case of dispute between
the parties with respect to this Contract or the Contract Documents, the English
version shall always prevail.
ARTICLE 39
FINANCING OF PROJECT
39.1 TAKE OVER BY PROJECT LENDER. COMPANY shall have the right to assign
---------------------------
the Contract, or any of COMPANY'S rights and obligations thereunder, in whole or
in part, to the lender or lenders providing part or all of the financing for the
Facility, and CONTRACTOR presently consents to any assumption of the Contract by
any such lender or lenders. CONTRACTOR agrees to perform its obligations under
the Contract, and to cause all of its subcontractors and vendors to perform
their obligations under all subcontractors and purchase orders, on behalf of
such lender or lenders, provided that such lender or lenders comply with
--------
COMPANY'S assigned obligations arising subsequent to such lender or lenders
taking over the Project.
39.2 APPROVALS BY PROJECT LENDER. The lender or lenders providing part or
---------------------------
all of the financing for the Facility may participate in the approval of Design
Documents, the Project Budget, the Project Schedule and changes, additions and
omissions.
39.3 AUDIT BY PROJECT LENDER. The lender or lenders providing part or all
-----------------------
of the financing for the Facility and their agents and representatives shall
have the same rights to inspect the Construction Work and to review and
75
audit the books and activities of CONTRACTOR and any subcontractor or vendor in
connection with the Project that COMPANY has under the Contract.
39.4 AMENDMENT OF AGREEMENT. CONTRACTOR agrees to amend this Agreement to
----------------------
satisfy the requirements of any lender or lenders providing financing for the
Project, provided such amendment does not materially increase the obligations or
--------
reduce or restrict the rights of CONTRACTOR hereunder or change the amount of
compensation that CONTRACTOR is entitled to receive hereunder or modify the
means of calculating such compensation.
ARTICLE 40
FORCE MAJEURE
40.1 EVENTS OF FORCE MAJEURE. Occurrences beyond the control of the party
-----------------------
affected that cause delays in or failure of performance of such affected party
under the Contract (excluding performance of a provision requiring the payment
or expenditure of money) shall constitute force majeure, including, but not
limited to, acts of governmental authority (excluding delays or failures of
performance attributable to the affected party's delay or other fault and
excluding proper exercise of the police power in response to an improper act or
omission of the affected party), unusually severe weather conditions (as defined
in this Section), strikes or other concerted acts of workmen (except to the
extent caused by the affected party or its agents, officers, representatives,
subcontractors or vendors and except to the extent that a strike had been
announced in advance and provision could have been made to alleviate such
strike's effects), fires, floods, explosions, riots, sabotage shipwrecks (except
to the extent such fires, floods, explosions, riots, sabotage or shipwrecks were
caused by the affected party or its agents, officers, representatives,
subcontractors or vendors), war and rebellion. As used in this Section, the
term "unusually severe weather conditions" shall mean weather conditions that
(i) CONTRACTOR establishes to COMPANY'S reasonable satisfaction were not
reasonably foreseeable and (ii) were sufficiently severe that thirty percent
(30%) of the work force employed on the Project were unable to work, and (iii)
resulted in delay that affected the critical path set forth in the Project
Schedule. Notwithstanding anything herein to the contrary, events of "force
majeure" shall not include the following: (I) delays or failures of performance
caused by general economic conditions or (II) delays or failures of performance
caused by open market conditions, such as inability to procure labor or
materials in the open market. Insufficiencies in the design of the Facility,
rejection by COMPANY pursuant to this Agreement of any proposed subcontractor or
vendor or absence of CONTRACTOR'S Representatives or other personnel shall also
not be considered as a just cause of delay. CONTRACTOR shall be fully
responsible for the timely ordering, scheduling, expediting, delivery, and
installation of all equipment and materials. Therefore, delays by vendors in
manufacture or delivery of materials, which delays are not caused by force
majeure, or shortages of labor or materials resulting from general market
conditions shall not be considered as a just cause for delay.
40.2 EFFECT ON TIME FOR PERFORMING OBLIGATION. Either party's inability to
----------------------------------------
perform a non-monetary obligation under the Contract on time and as required by
reason of the occurrence of force majeure, shall cause such obligation to be
suspended, but only until the cessation of such occurrence, so far as the
affected party's ability to perform is affected by that force majeure
occurrence. In the event that such force majeure obstructs performance of the
Contract for more than six (6) months, the parties hereto shall consult with
each other to determine whether the Contract should be modified. COMPANY and
CONTRACTOR will not unreasonably withhold their respective consents to a request
by the other party to extend the Project Schedule or increase the Budgeted Cost
of the Work if force majeure has obstructed performance of the Contract.
76
40.3 EFFECT ON COMPENSATION. Notwithstanding anything to the contrary in
----------------------
Section 14.1 above, the Fee shall not be increased if, following a force majeure
event, CONTRACTOR is not required as a result thereof to perform a materially
greater amount of work (e.g., if a fire destroys a shipment of doors and the
---
only additional effort required from CONTRACTOR is to re-order the doors).
40.4 OBLIGATION TO MITIGATE. If force majeure occurs, the affected party
----------------------
shall, as soon as practicable after the occurrence of that force majeure, use
its best efforts (including incurring any reasonable expenditure of funds and
rescheduling manpower and resources) to mitigate and minimize any resulting
delay in the performance of the suspended obligation.
40.5 NOTIFICATION. The affected party shall within 72 hours notify the
------------
other party in accordance with the provisions of Section 14.3 and keep the other
------------
party informed at reasonable intervals. Upon request by the other party, as
soon as practicable following that request, the affected party shall provide
notice concerning the likely duration of the force majeure, the action taken and
the action proposed to be taken by the affected party, the cessation of force
majeure or the successful mitigation of the force majeure, and any other matter
which the other party may reasonably request.
40.6 FAILURE TO NOTIFY. If the affected party fails to give notices as
-----------------
prescribed in Sections 14.3 and 40.5, the lack of such notices shall be
------------- ----
sufficient ground for denial of an extension of time on account of the force
majeure, and the affected party shall not be excused from any delay resulting
from the occurrence of such force majeure.
ARTICLE 41
WAIVER, SEVERABILITY AND REMEDIES
41.1 COMPANY'S RIGHTS NOT AFFECTED. COMPANY'S rights under the Contract
-----------------------------
shall not be affected in any way whatsoever by any inspection by COMPANY or by
COMPANY'S Inspector or Representative, nor any payment by COMPANY, nor any
payment for, or acceptance of, the whole or any part of the Construction Work by
COMPANY, nor any extension of time, nor any possession taken by COMPANY.
41.2 CONTRACTOR'S WAIVER. CONTRACTOR hereby waives its claims on the basis
-------------------
of Section 648 German Civil Code (Bauhandwerkersicherungshypothek).
41.3 NO WAIVER OF BREACH. No waiver by either party of any term, covenant
-------------------
or condition of the Contract nor any waiver of or assent, express or implied, by
either party to any breach of or default in any term, covenant or condition in
the Contract on the part of the other to be performed or observed shall
constitute a waiver of any other term, covenant or condition of the Contract,
nor a waiver of or assent to any succeeding breach of or default in the same or
any other term, covenant or condition of the Contract. No failure to exercise
and no delay in exercising any right, power or privilege by any party under the
Contact shall operate as a waiver of such right, power or privilege, nor shall
any single or partial exercise of any right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
41.4 WRITTEN CHANGES. The Contract may be changed only by a writing
---------------
executed by COMPANY'S Representatives and CONTRACTOR'S Representatives, and no
oral statement, act or omission by COMPANY or CONTRACTOR shall constitute a
change in the Contract or a waiver of the requirements of this Section.
41.5 SEVERABILITY. If any provision of the Contract is declared invalid by
------------
any court or other tribunal of competent jurisdiction, the remaining provisions
of the Contract shall remain in full force and effect.
77
The parties shall endeavor in good faith to negotiate a provision to replace the
invalid provision which replacement provision shall achieve the same purpose and
intent as the invalid provision.
41.6 Cumulative Remedies. No remedy contained in the Contract is intended
-------------------
to be exclusive of any other remedy which is otherwise available at law, in
equity, by statute or otherwise, and each and every other remedy shall be
cumulative and shall be in addition to every other remedy given under the
Contract or now or hereafter existing at law, in equity, by statute or
otherwise. The election of any one or more of such remedies by either of the
parties shall not constitute a waiver by such party of the right to pursue any
other available remedies.
41.7 CAPTIONS. The headings of articles, sections and clauses hereof are
--------
for convenience only and are not a part of this Agreement.
ARTICLE 42
NOTICES AND ADDRESSES
42.1 NOTICES. All notices and instructions given by either party under the
-------
Contract to the other shall be in writing, in English, and any such notice or
instruction shall be deemed to have been properly served if delivered in person
to the office of the Representative authorized and designated in writing to act
on the specific matter to which the notice or instruction applies, or if sent by
facsimile transmission or deposited in the German Mail properly stamped with the
required postage and addressed to the office of such Representative. If no
Representative shall have been appointed to act on the matter to which a notice
or instruction applies, such notice or instruction shall be deemed to have been
properly served if deposited in the German Mail properly stamped with the
required postage and addressed to:
AMD Saxony Manufacturing GmbH
At the Site
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, General Manager
With copies to:
AMD Saxony Manufacturing GmbH
c/o Advanced Micro Devices, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ (M/S 588)
Fax No.: 512/▇▇▇-▇▇▇▇
A copy of any notice of default by COMPANY hereunder shall be sent to:
Advanced Micro Devices, Inc.
Legal Department
One AMD Place M/S 68
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇.▇.▇.▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Fax No.: 408/▇▇▇-▇▇▇▇
if the notice or instruction is to COMPANY, or to:
▇▇▇▇▇▇▇▇ + ▇▇▇▇▇ GmbH + Co.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
Fax No.: ▇▇▇▇-▇▇▇▇-▇▇▇
if the notice or instruction is to CONTRACTOR.
78
The date of service of a notice or instruction sent by mail shall be the five
(5) regular business days following the date on which such notice or instruction
is deposited in the German Mail or the U.S. mail as aforesaid. Service of a
notice or instruction by facsimile transmission shall be complete at the time of
transmission, and the copy of the notice or instruction so served shall bear a
notation of the date and place of transmission and the facsimile telephone
number to which transmitted.
42.2 CHANGE OF ADDRESS. Either party hereto shall have the right to change
-----------------
any Representative or address it may have given the other party by giving such
other party due notice in writing of such change.
ARTICLE 43
ENTIRE AGREEMENT; SUCCESSORS
43.1 ENTIRE AGREEMENT. This Contract supersedes all previous agreements
----------------
between CONTRACTOR and COMPANY relating to the subject matter hereof, except
confidentiality and similar agreements.
43.2 SUCCESSORS AND ASSIGNS. This Contract shall be binding upon and shall
----------------------
inure to the benefit of the legal successors of the parties hereto, and, except
as otherwise provided herein, shall not be assigned by either party without the
prior written consent of the other.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be duly
executed on their behalf, effective as of the day and year first above written.
COMPANY
AMD SAXONY MANUFACTURING GmBH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and General Manager Fab 30
Date: November 15, 1996
CONTRACTOR
▇▇▇▇▇▇▇▇ + ▇▇▇▇▇ GmBH + CO.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Title: Managing Director
--------------------------
Date: November 15, 1996
79
SCHEDULE 16.2.4
SCHEDULE 16.2.4
---------------
EXAMPLES OF QUALIFYING AND NON-QUALIFYING
ADDITIONAL REIMBURSABLE COSTS
-----------------------------------------
As a general rule, COMPANY shall pay for the design, labor and
materials involved in designing, purchasing and installing each element of the
Project once. If CONTRACTOR forgets to design in a part that the Facility
requires, then COMPANY will pay for the added design and construction cost (but
not the added redesign costs), even if CONTRACTOR was negligent in leaving it
out of the original design. If CONTRACTOR designed in the wrong part and that
part is installed and now needs to be removed, COMPANY shall not pay the re-
design costs and CONTRACTOR will be fully responsible for the cost associated
with installing and removing the wrong part (including the cost of the wrong
part if it cannot be returned to the vendor or used elsewhere in the Project),
and COMPANY shall pay only the material and construction costs for the correct
part (and there will not be an adjustment in the Project Schedule). If
subcontractors make mistakes, CONTRACTOR will be responsible for associated
costs (and the Project Schedule will not change to account for the mistakes).
Also, if market conditions change the price of materials, COMPANY shall pay the
cost change, but the Budgeted Cost of the Work will not be adjusted.
SCENARIO: The Design Documents prepared by CONTRACTOR and approved by COMPANY
--------
show a 2 inch pipe. A 2 inch pipe is installed. However, the Facility requires
a 4 inch pipe. The 2 inch pipe is torn out and replaced by a 4 inch pipe.
RESULT: COMPANY originally paid the cost of designing the pipe and of the
------
2 inch pipe's procurement and installation. COMPANY now pays the cost of the 4
inch pipe's procurement and installation but receives a credit equal to the
amount originally paid to procure and install the 2 inch pipe. The amount of
the credit and the cost of any redesign work are borne by CONTRACTOR. The
Budgeted Cost of the Work is not adjusted.
SCENARIO: The Design Documents show a tank in one location and a pipe running
--------
past the tank. A subcontractor negligently installs the tank in the space in
which the pipe is to run.
RESULT: COMPANY originally paid for the design of the tank and pipe and
------
for the cost of procuring and installing the tank and pipe. CONTRACTOR will pay
the additional cost of either removing and relocating the tank or relocating the
pipe. The Budgeted Cost of the Work is not adjusted.
SCENARIO: Soil studies obtained by COMPANY show a subsurface area clear of
--------
obstructions. The Design Documents prepared by CONTRACTOR and approved by
COMPANY show a pipe running through the unobstructed area. When the area is
excavated, granite is found.
RESULT: Because the presence of the granite was not foreseen, COMPANY
------
shall pay the additional cost of reconfiguring or relocating the pipe or of
removing the granite. The Budgeted Cost of the Work is adjusted. However, if
CONTRACTOR had reason to know, or should have known, of the presence of the
granite, then CONTRACTOR would pay the additional cost of reconfiguring or
relocating the pipe or of removing the granite. The Budgeted Cost of the Work
would not be adjusted.
SCHEDULE 21.6 & 21.7
SCHEDULE 21.6 & 21.7
--------------------
CRITERIA FOR BANK GUARANTEES
----------------------------
The minimum requirements for the performance bond and the warranty and advance
payment guarantees (in addition to those already set out in Section 21.6 and
21.7) are as follows:
1) For guarantees furnished by CONTRACTOR, as well as guarantees furnished by
--------------------------------------------------------------------------
subcontractors or vendors that enter into individual contracts to which the AGBG
--------------------------------------------------------------------------------
does not apply:
--------------
a) the bonds and guarantees qualify as a "Garantie" under German law;
b) the bonds and guarantess be payable on first demand;
c) payment by the guarantor be made free of any restriction or
condition, whether by way of set-off (Aufrechnung), counter-claim
(Widerklage), defense of voidability (Einrede der Anfechtbarkeit) or
rights of retention (Zuruckbehaltungsrechte) or otherwise, and
d) the guarantor waives his right to deposit (Hinterlegung) the amount
claimed.
2) For guarantees furnished by subcontractors or vendors that do not enter into
----------------------------------------------------------------------------
individual contracts (e.g. the AGBG does apply):
-----------------------------------------------
a) the bonds and guarantees qualify as a "Burgschaft" under German law;
b) payment by the guarantor be made free of any restriction or
condition, whether by way of set-off (Aufrechnung), counter-claim
(Widerklage), defense of voidability (Einrede der Anfechtbarkeit) or
rights of retention (Zuruckbehaltungsrechte) or otherwise, and
c) the guarantor waives his right to deposit (Hinterlegung) the amount
claimed.
Exhibit A
Fab 30 Facility Performance Criteria
ALL CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
Schedule 7.1
AMD Fab 30 Dresden
--------------------------------------------------------------------------------
SCHEDULE 7.1
Site Studies furnished by company to contractor
SUBJECT AUTHOR DATE REMARKS
--------------------------------------------------------------------------------------------------
Georadar Report Analy Tech 03/21/96 15 pages
Project No. M - 012/96 Ingenieurgesellschaft 7 appendices
fur
Baumgrunduntersuchun
gen,
Umwelttechnologie
und Saniertung mbH;
Mittlebach
-------------------------------------------------------------------------------------------------
Geotechnical Reports BAUGEO 04/19/96 65 pages
Report No. 56 962 Ingenieurbuero fur 19 appendices
Baugrund und
Appendices: Geotechnik GmbH;
Leipzig
1 general plan
2 map of the area with planned development
3 Investigation plan
4 map of the area inclusive of geodesic
measurement points
5 exploration profiles
6 contour index
7 results of heavy pile sounding
8 geological section drawing
9 protocols of the short pumping test
10 photographic documentation of the drill
core samplings
11 results of the soil-mechanical tests
12 results of the chemical analysis
13 results of the mechanical analysis of rock
14 topographical map
15 Isolinear map of the top edge of bedrock
decomposition
16 Isolinear map of the top edge of the bedrock
17 groundwater isohypsen
18 report of radon measurement
19 report of ground radar measurement from
selected geological sections
-------------------------------------------------------------------------------------------------
Geotechnical Reports BAUGEO 05/09/96 6 pages
Report No. 56 962 Ingenieurbuero fur 7 appendices
-1/st/ completion - Baugrund und
Geotechnik GmbH;
Leipzig
-------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stand October 15, 1996 page 1 of 3
AMD Fab 30 Dresden
--------------------------------------------------------------------------------
SUBJECT AUTHOR DATE REMARKS
-------------------------------------------------------------------------------------------------
Groundwater Report ICA Appendices 17.1
(chemical analysis) Institut fur and 17.2
Chemische
Analytik GmbH,
Report No. 3131/Water Leipzig 03/27/96
Report No. 3142/Water 03/21/96
Report No. 3143/Water 03/21/96
Report No. 3144/Water 03/21/96
Report No. 3145/Water 03/21/96
-------------------------------------------------------------------------------------------------
(Drinking water and process water supply) Wasserverband 11/14/95
Brochwitz
-------------------------------------------------------------------------------------------------
Topsoil Report ICA 03/27/96
Report No. 3131/soil Institut fur
Chemische
Analytik GmbH,
Leipzig
-------------------------------------------------------------------------------------------------
Air Quality Report TUV Sachsen GmbH, 05/10/96
Dresden
-------------------------------------------------------------------------------------------------
Air Report - emission prognoses and TUV Umwelttechnik, 04/17/96 10 pages
streaming models Dresden 12 appendices
-------------------------------------------------------------------------------------------------
Report on the noise level measurements in CDF 06/18/96
Wilschdorf Schallschutz
mesurement report 96 140/01 Consulting ▇▇. ▇▇▇▇▇,
Dresden
-------------------------------------------------------------------------------------------------
Environmental impact prediction - CDF 04/18/96
Development map, Traffic noise State Schallschutz
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇,
Noise Prediction - Report No. 96 135/03 Dresden
-------------------------------------------------------------------------------------------------
Vibration Report No. 1888 Brussau Bauphysik 05/23/96 21 diagrams
Vibration measurements from 04/21/96 to GmbH 111 measured
04/23/96 in Dresden-Wilschdorf Acoustics-Dynamics- reports
Structural Physics,
Fellbach/Stuttgart
-------------------------------------------------------------------------------------------------
Vibration Report Brussau Bauphysik 05/09/96 9 appendices
(Preliminary report of the vibration test) GmbH
Acoustics-Dynamics-
Structural Physics,
Fellbach/Stuttgart
-------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stand October 15, 1996 page 2 of 3
AMD Fab 30 Dresden
--------------------------------------------------------------------------------
SUBJECT AUTHOR DATE REMARKS
-----------------------------------------------------------------------------------------
Military-historical study about the situation Rohl 05/02/96
of Wilschdorf during the Second World War and Umweltentsorgung
investigation of bombs or ammunition und Munitionsbergung
in Sachsen und
Thuringen GmbH
-----------------------------------------------------------------------------------------
preliminary measurement of structural 09/25/96
dynamics and dynamic vibrations
calculation of the clean room ceiling
construction
--------------------------------------------------------------------------------
Stand October 15, 1996 page 3 of 3
Schedule 16.2.1.1
HOURLY RATES OF CONTRACTOR'S EMPLOYEES
AND
CONTRACTOR'S ESTABLISHED TRAVEL AND LIVING EXPENSES
REIMBURSEMENT POLICIES
SCHEDULE 16.2.1.1
Classification Hourly Rate - DEM
---------------------------------------------
Project Director 166,00
---------------------------------------------
Project Manager 162,00
---------------------------------------------
Senior Systems Engineer 121,00
---------------------------------------------
Process Engineer 110,00
---------------------------------------------
Software Engineer 108,00
---------------------------------------------
Systems Engineer 111,00
---------------------------------------------
CAD Operator 86,00
---------------------------------------------
Project Commercial Manager 109,00
---------------------------------------------
Accounting Administration 71,00
---------------------------------------------
Secretary 77,00
---------------------------------------------
Travel
See attached Contractor's "Travel Expenses - Guideline Headquarter Policy".
Notes
Rates apply from 01/01/1996 on and are subject to revision from time to
time. All rate increases to be approved by AMD.
Formula for the Calculation of Hourly Rates
1. Salary Rates
1.1 Employees with a single contract (not related to trade union
agreements/40 hours per week).
Current Actual Annual Salary for each employee scheduled to work on the
project is divided by 1792 hours to obtain the effective hourly salary
rate. Total hours for the year - 2080 is reduced by 30 days vacation
times 8 hours (240) and 6 days sick time (average for M+W) times 8
hours (48).
1.2 Employees with a contract related to trade union agreement/38 hours a
week/7.6 hours a day.
Current Actual Annual salary for each employee scheduled to work on the
project is divided by 1706 hours to obtain the effective hourly salary
rate. Total hours for the year - 1980 is reduced by 30 days vacation
times 7.6 hours (228) and 6 days sick time (average for M+W) times 7.6
hours (45.6).
2. The total annual Social Benefits cost is calculated for each employee
scheduled to work on the project based on their total annual salary as
follows:
Health Insurance 6.7% on salary up to DEM 72,000
Unemployment Insurance 3.25% on salary up to DEM 96,000
Pension 9.6% on salary up to DEM 96,000
Health for Elderly 0.85% on salary up to DEM 72,000
The total annual social benefits costs for each employee is divided by
1792 hours (employees working 40 hours per week) or 1706 hours (employees
with a contract related to trade agreement working 38 hours per week) to
determine the hourly rate amount.
3. The actual hourly salary rate and the actual hourly social benefits cost
for each employee scheduled to work on the project are added together to
obtain a combined actual hourly salary and social benefit rate.
4. The combined actual salary and social benefits cost rate for each employee
included in a classification set forth on schedule 16.2.1.1 are added
together and divided by the number of employees included in the
classification. The result is a weighted average actual hourly and social
benefits cost rate for that classification.
5. An overhead rate of 75% is applied to the weighted average actual hourly
and social benefits cost rate for each classification to calculate the
total hourly rate for that classification.
ADDENDUM TO SCHEDULE 16.2.1.1
-----------------------------
CALCULATION OF OVERHEAD RATE
----------------------------
Calendar Year
1995
-------------
Total M + W Personnel Costs DM 75,578,520
DEDUCT:
Accruals for Wages and Salaries 3,250,855
-------------
72,327,665
DEDUCT:
Business Field Products CC 6010 10,617,990
General & Administrative:
CC 5434 305,945
CC 6400 5,823,045
CC 6420 1,767,223
---------
7,896,213
Selling Expense - Domestic 70% (Est) 4,617,662
Selling Expense - Foreign 1,741,594
---------
6,359,256
-------------
(A) Net M + W PERSONNEL COSTS DM 47,454,206
=============
Total M + W Overhead Costs 28,785,181
DEDUCT:
Business Field Products CC 6010 5,106,388
Foreign Branch Office Selling Expense
(DM 2,487,992 x 30%) 746,398
---------
5,852,786
-------------
ADD: 22,932,395
General & Administrative Personnel Costs:
CC 5434 305,945
CC 6400 5,823,045
CC 6020 1,767,223
---------
7,896,213
Selling Expense Personnel Costs 4,617,662
-------------
(B) Net M + W OVERHEAD COSTS DM 35,446,270
=============
Overhead Rate B / A = 74.7%
USE: 75%
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page: 1 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
▇▇▇▇▇▇▇▇+▇▇▇▇▇ GMBH+Co.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
1. APPLICABILITY
----------------
This Travel Expenses Guideline does justice to the tax laws and rules of the
Federal Republic of Germany, and is binding for all ▇▇▇▇▇▇▇▇+▇▇▇▇▇ Stuttgart CCT
profit center employees.
▇▇▇▇▇▇▇▇+▇▇▇▇▇ reserves the right to modify the regulations contained herein
from time to time.
Unless otherwise noted, this guideline applies to all ▇▇▇▇▇▇▇▇+▇▇▇▇▇ project
locations.
2. DEFINITION OF TRAVEL EXPENSES
--------------------------------
2.1 Travel expenses are defined as additional expenses due to business trips,
including but not limited to:
-accomodations
-air travel
-airport taxes/fees
-train travel
-communication costs (telephone/fax)
-taxi fare
-costs, related to use of private cars
-car rental
-parking
-storage of baggage
2.2 All such expenses have to be proved with original receipts. In the case
that an original receipt got lost or the employee cannot prove the expenses
with an original receipt for any other reason, he has to issue a receipt
and sign this one. Such "document" has to be approved by the responsible
manager (e.g. dept. manager/project manager).
2.3 VAT on all invoices shall be indicated separately.
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page: 2 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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2.4 All business trips shall be limited to the shortest possible distance and
time spent for the trip. All such trips shall be made considering the most
economical way to reach the destination. The same principle applies for
trips back to the headquarter office.
3. DEFINITION OF BUSINESS TRIP
------------------------------
3.1 The fact of working as an employee temporarily outside the own permanent
office is defined as business trip.
3.2 In case a business trip exceeds the time period of six (6) months, the
responsible management may decide to require a project specific employment
contract (ENTSENDUNGSVERTRAG) at the staff department. Such employment
contract shall follow all relevant regulations of this guideline, however,
it is advisable especially for all employees sent to foreign countries in
order to follow the applied tax laws of these countries.
4. DEFINITION OF PERMANENT OFFICE
---------------------------------
The permanent office is defined as the place where the employee is normally
spending most of his working hours and/or where he is reporting to.
5. DAILY ALLOWANCE
------------------
5.1 Business trips in Germany.
-------------------------------
In case of business trips in Germany the employee is entitled to receive a
daily allowance for each calendar day as follows:
absence from permanent office 10 to 14 hours DEM 10.00
absence from permanent office 14 to 24 hours DEM 20.00
absence from permanent office more than 24 hours DEM 46.00
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page: 3 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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5.2 Business trips outside Germany
-----------------------------------
In case of business trips outside Germany the employee is entitled to
receive a daily allowance each calendar day in accordance with EXHIBIT A (6
pages) of this guideline.
6. AIR TRAVEL
-------------
6.1 Air travel in Germany
--------------------------
In case of air travel in Germany the company will book and directly pay an
ECONOMY CLASS ticket.
6.2 Air travel outside Germany
-------------------------------
In case of air travel outside Germany and exceeding a flight time of 1.5
hours, the company will book and directly pay a BUSINESS CLASS ticket.
6.3 Senior Management, Department Management is entitled to BUSINESS CLASS
tickets generally.
6.4 If an employee had to pay a ticket by himself, the amount will be
reimbursed due to the ticket and boarding card attached to the expense
report.
6.5 Any unused ticket has to be returned to the company immediately.
6.6 Air travel has to be co-ordinated with and approved by management (e. g.
dept. manager, project manager).
6.7 Use of personal aircrafts is strictly prohibited for company business
trips.
6.8 Free tickets offered by airlines based on the amount of miles accumulated,
remain the property of the employee.
CCT
Project:AMD FAB 30
K 121 060
10/22/96
Page: 4 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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7. ACCOMMODATION
---------------
7.1 In general the company will book and directly pay for accommodation such as
hotel rooms, apartments, etc.
7.2 Hotel accommodation shall be limited to middle class hotels with DEM 180,--
per day/night.
7.3 Apartments shall be available for employees with families and those being
permanent project team members. The expenses shall be limited to DEM
3.200,-- per month.
7.4 In the case the employee had to pay for accommodation by himself, the
amount will be reimbursed due to the ▇▇▇▇ attached to the expense report.
7.5 Accommodation has to be co-ordinated and approved by management
(e.g. dept. manager, project manager).
8. USE OF PRIVATE CARS
----------------------
8.1 The use of private cars for business trips is limited to short distance
trips with 100km single journey.
8.2 The use of private cars will be reimbursed with DEM 0,52 per km.
8.3 The belonging amounts of km has to be stated on the expense report and his
accuracy will be checked from time to time.
8.4 In case the stated amount of km is found incorrect, the shortest possible
connection + 10% will be determined in order to reimburse such trip.
8.5 Exception may be made in regard of said limitation, if approved by
management.
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page: 5 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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9. CAR RENTAL
---------------
9.1 In case of car rental the company SIXT BUDGET is the preferred partner to
rent cars at.
9.2 For employees travelling alone compact car class is required, such as:
VW Golf
Ford Fiesta
Opel Astra
9.3 An exception may be made due to baggage or equipment to be transported, or
in case of transportation to other people. In such case the employee will
be provided with such a car (see 11.4).
9.4 For employees travelling in groups up to three (3) persons, middle class
cars, four doors is required, such as:
Opel Vectra
Ford Scorpio
VW Passat
9.5 Management is entitled to rent upper middle class cars, such as:
BMW 5er
Audi A6
9.6 Full insurance coverage for cars, drivers and third parties is required.
10. TRAIN TRAVEL
-----------------
10.1 As an alternative to air or car travel in Germany, it is advised to check
on train travel possibilities.
10.2 Within a distance of 300 km second class tickets are required.
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page: 6 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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10.3 In general the company will book and directly pay train travel tickets.
10.4 In the event an employee had to pay the ticket by himself, such amount
will be reimbursed due to the ticket attached to the expense report.
11. EXPENSE REPORTS
-------------------
11.1 All business trips have to be billed latest at the end of the following
month.
11.2 For business trips in and outside Germany the form "INLANDSREISEKOSTEN-
ABRECHNUNG" has to be filled in (see EXHIBIT B (2 pages) of this
guideline).
11.3 All original receipts have to be attached in chronological order to the
corresponding form.
11.4 For receipts issued in foreign currency the corresponding exchange-rate
has to be stated on the receipt. On the expense report the amount is to
be shown in DEM.
11.5 All expense reports are to be checked and approved by the responsible
manager (e. g. dept. manager, project manager).
11.6 The mathematical and tax related check of the expense report is done by
the staff department (▇▇▇. ▇▇▇▇▇▇, tel. -546). Possible deductions or
eventual corrections will be shown on the copy that is returned to the
employee.
11.7 The belonging amounts due to the checked and eventually corrected expense
reports will be paid to the employee together with the salary of the
following month.
11.8 Payments of amounts due to expense reports are proceeded by account dept.
(▇▇▇. ▇▇▇▇▇▇▇, tel. -486).
CCT
Project: AMD FAB 30
K 121 060
10/22/96
Page:7 of 6
TRAVEL EXPENSES - GUIDELINE HEADQUARTER POLICY
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
11.9 Within reasonable amounts down payments due to expected travel expenses may
be provided by the account dept. A belonging receipt has to be issued and
signed by the employee. Such down payment will be deducted from the expense
reports amount which has to be paid to the employee.
Signed and authorized Signed and authorized
▇. ▇▇▇▇▇ Project manager ▇. ▇▇▇▇ Authorized manager
------------------------ --------------------------
------------------------ --------------------------
------------------------ --------------------------
------------------------ --------------------------
Schedule 16.2.1.1
(Exhibit A)
EXHIBIT A
SCHEDULE 16.2.1.1
Anlage zur Reisekostenordnung:
Pauschbetrage fur Verpflegungsmehraufwendungen bei
Auslandsdienstreisen
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Agypten 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Kairo 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Aquatorialguinea 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Athiopien 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Afghanistan 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Albanien 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Algerien 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Andorra 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Angola 90 DM 60 DM 30 DM
---------------------------------------------------------------------------------------------
Argentinien 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Armenien 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Aserbaidschan 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Australien 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Bahamas 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Bahrain 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Bangladesch 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Barbados 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Belgien 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Benin 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Bolivien 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Bosnien-Herzegovina 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Botsuana 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Brasilien 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇(Darussalam) 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Bulgarien 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Burkina Faso 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Burundi 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Chile 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
China 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Shanghai 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
(China) Taiwan 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Costa Rica 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Cote d' Ivoire 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Danemark 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
- Kopenhagen 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Dschjbuti 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Ecuador 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
El Salvador 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Eritrea 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇ DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Fidschi 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Finnland 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Frankreich 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
- ▇▇▇▇▇ ▇▇ DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Gabun 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Gambia 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Georgien 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Ghana 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Griechenland 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Guatemala 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Guinea 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Guinea-Bissau 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Guyana 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Haiti 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Honduras 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Hongkong 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Indien 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
- New Delhi 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
- Bombay 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Indonesien 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Irak 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Iran 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Irland 90 DM 60 DM 30 DM
---------------------------------------------------------------------------------------------
Island 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Israel 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Italien 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Jamaica 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Japan 132 DM 88 DM 44 DM
---------------------------------------------------------------------------------------------
Jemen 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Jordanien 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Jugoslawien 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Kambodscha 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Kanada 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Kap Verde 74 DM 60 DM 25 DM
---------------------------------------------------------------------------------------------
Kasachstan 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Katar 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇ 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Kargisistan 36 DM 24 DM 12 DM
---------------------------------------------------------------------------------------------
Kolumbien 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Komoren 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Kongo 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Korea ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Korea, Republik 108 DM 72 DM 36 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇ DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Kuba 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Kuwait 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Laotische Demokr, Volksrep. 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Lesotho 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Lettland 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Lebanon 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Liberia 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Libysch-Arab Dschamahinja 120 DM 80 DM 40 DM
---------------------------------------------------------------------------------------------
Litauen 36 DM 24 DM 12 DM
---------------------------------------------------------------------------------------------
Luxemburg 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Madagaskar 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Malaw 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Malaysia 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Maledven 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Mali 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Malta 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Marokko 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Mauretanien 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Mauritius 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Mazedonien 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Mexiko 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ DM 24 DM 12 DM
---------------------------------------------------------------------------------------------
Monaco 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇ DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Mosambik 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Myanmar (fruher Burma) 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Namibia 48 DM 432DM 16 DM
---------------------------------------------------------------------------------------------
Nepal 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Neuseeland 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Nicaragua 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Niederlande 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Niger 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Nigeria 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Norwegen 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Osterreich 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
- Wien 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Oman 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Pakistan 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Panama 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Papua-Neuguinea 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Paraguay 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇ DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Philippinen 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Polen 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
- ▇▇▇▇▇▇▇▇ ▇▇ DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Portugal 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Ruanda 74 DM 50 DM 26 DM
---------------------------------------------------------------------------------------------
Rumanien 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Russische Foderation 108 DM 72 DM 36 DM
---------------------------------------------------------------------------------------------
- Moskau 108 DM 72 DM 36 DM
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Sambia 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Samoa 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
San Marino 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Sao Tome and Principe 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Saudi-Arabien 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Schweden 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Schweiz 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Senegal 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Sierra Leone 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Simbabwe 36 DM 24 DM 12 DM
---------------------------------------------------------------------------------------------
Singapur 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Slowaken 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Slowenien 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Somalia 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Spanien 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Sri Lanka 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Sudan 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Swasiland 74 DM 50 DM 25 DM
---------------------------------------------------------------------------------------------
Syrien, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Tadschikistan 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Tansania, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Thailand 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Togo 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Tonga 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Trinidad und Tobago 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
Tschad 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
Tschechische Republik 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Turken 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
- asiatischer Teil 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Tunesien 54 DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Turkmenistan 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Uganda 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
Ukraine 42 DM 28 DM 14 DM
---------------------------------------------------------------------------------------------
Ungam 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Uruguay 66 DM 44 DM 22 DM
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
LAND PAUSCHBETRAG BEI ABWESENHEITSDAUER JE KALENDERTAG VON
---------------------------------------------------------
MINDESTENS WENIGER ALS WENIGER ALS
24 STD. 24 STD. ABER 14 STD. ABER
MINDESTENS ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇. ▇▇ ▇▇▇.
---------------------------------------------------------------------------------------------
Usbekistan 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
Venezuela 48 DM 32 DM 16 DM
---------------------------------------------------------------------------------------------
Vereinigte Arabische Emirate 84 DM 56 DM 28 DM
---------------------------------------------------------------------------------------------
Vereinigte Staaten 78 DM 52 DM 26 DM
---------------------------------------------------------------------------------------------
New York 102 DM 68 DM 34 DM
---------------------------------------------------------------------------------------------
- Washington/2)/ 96 DM 64 DM 32 DM
---------------------------------------------------------------------------------------------
Vereinigtes Konigreich 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
- London 90 DM 60 DM 30 DM
---------------------------------------------------------------------------------------------
Vietnam 60 DM 40 DM 20 DM
---------------------------------------------------------------------------------------------
WeiBruBland 36 DM 24 DM 12 DM
---------------------------------------------------------------------------------------------
Zaire 102 DM 68 DM 34 DM
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ DM 36 DM 18 DM
---------------------------------------------------------------------------------------------
Zypern 72 DM 48 DM 24 DM
---------------------------------------------------------------------------------------------
/1)/ einschliesslich der Departements Haute-Seine, Seine-Saint Denis und
Val-de-Marne
/2)/ einschliesslich Alexandria/Virginia und Arlington/Virginia
Schedule 16.2.1.1
(Exhibit B)
EXHIBIT ??^^
SCHEDULE 16.2.1.1
Angaben
zum Nachweis der Hohe und der betrieblichen Veranlassung
von Bewirtungsaufwendungen ((S)4 Abs. 5 Ziff. 2 ETIG)
--------------------------------------------------------------------------------
Tag der Bewirtung Ort der Bewirtung (genaue Bezeichnung. Anschrift).
--------------------------------------------------------------------------------
Bewirtele Person(en)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AnlaB der Bewirtung
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hohe der Aufwendungen
[_] bei Bewirtung in Gaststatte:* [_] in anderen Fallen:*
It umseitiger/beigefugter
Rechnung
_____________________ DM ________________ DM
--------------------------------------------------------------------------------
Ort Datum Unterschrift
--------------------------------------------------------------------------------
*Zutreffendes bitte ankreuzen
Reisekostenabrechnung ▇▇▇▇▇▇▇▇+▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Name Abteilung Personal-Nr. Kostenstelle vorn
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Reisedauer Bahn
-------------- Leitziffer Anzahl km- Taxi
Reisetag von bis Reiseort/Reisezweck Komm.-Nr. km Geld Parken Benzin Flug
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1
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2
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3
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4
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5
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
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Summen
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Satze Inland Ableilungsleiter Personalabteilung ausgezahlt am Unterschrift MA
ab 10 Std. = 10,-DM
ab 14 Std. = 20,-DM
ab 24 Std. = 46,-DM ausgezahlt an
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
bis Belegnummer AF
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Telefon, Material, Wechsel
Auslosung Ubernachtungskosten Kundenbewirtung Kundengeschenke Porto Sonstiges kurs
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1
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2
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3
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4
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5
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
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Summen
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gesamle Reisekosten DM
abz. erh. VorschuB DM
auszuzahlen/zuruckzuzahlen DM
------------------------------------------------------------------------------------------------------------------------------------
Reisekosten 1/96
Schedule 16.2.2.3
Rental Rates
EQUIPMENT RENTAL RATES Schedule 16.2.2.3.
New Purchase
Equipment Model or Capacity Daily Weekly Monthly Price
-----------------------------------------------------------------------------------------
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Notes:
a. Rates apply only to construction equipment with values in excess of 800 DM.
b. Rates include normal maintenance cost and lubrication.
c. Rates do not include fuel.
d. Rates include all normal operating accessories, weld cable, air hoses,
hoisting cable, etc.
e. Rates are based of normal work week. Overtime usage adjustments apply to
rotating equipment only.
f. All equipment furnished under these rates must be in first-class condition.
g. Rates for any equipment not defined herein must have AMD's prior written
approval.
h. All rates listed are firm through the duration of the work of this project.
i. Contractor may submit its own rental equipment list providing the
conditions set forth herein are met.
j. Include separate sheets if necessary.
We do not foresee to own any of these Construction Equipments and Tools!
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