Subcontractor Terms and Conditions

SYSTEC LTD OF WISCONSIN, INC. AGREEMENT

GENERAL CONDITIONS
 

The Contractor and the Subcontractor (or Subcontractor and Subcontractor as the case may be) named on Purchase Order hereby agree that the Subcontractor shall perform the Work described in the Subcontract Agreement. The Contractor has entered into an agreement with the Owner and/or Prime Contractor (individually or jointly hereinafter “Owner”) for the construction of the Project.

By partial or complete performance under this Agreement or any Purchase Order, it is agreed between the Contractor and Subcontractor as follows:

1.              SUBCONTRACT AMOUNT. Contractor agrees to pay Subcontractor for satisfactory and timely performance and completion of Subcontract Work as outlined in Purchase Order (Subcontractor shall provide all labor and materials for its Work).

2.              INSURANCE. Subcontractor shall purchase and maintain insurance that will protect Subcontractor from claims arising out of Subcontractor operations under this Agreement, whether the operations are by Subcontractor, or any of Subcontractor’s consultants or subcontractors or anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable. Subcontractor shall cause Sub-Subcontractors to provide the same. Subcontractor shall provide Liability, Auto and Workers Compensation, coverage and limits of liability as set forth in Exhibit B.

1.              EXHIBITS. The following Exhibits are incorporated by reference and made part of this Agreement:

EXHIBIT A: Subcontract Work – as proposed by subcontractor named in Purchase Order EXHIBIT B: Insurance Contract/Provisions.

2.              SAFETY. To protect persons and property, Subcontractor shall establish a safety program implementing safety measures, policies and standards conforming to (a) those required or recommended by governmental and quasi-governmental authorities having jurisdiction and (b) requirements of this Agreement. Subcontractor shall keep project site clean and free from debris resulting from Subcontract Work.

3.              ASSIGNMENT .Subcontractor shall not assign the whole or any part of Subcontract Work or this Agreement without prior written approval of Contractor.

4.              TIME.
 

4.1.           TIME IS OF THE ESSENCE. Time is of the essence for both parties. The parties agree to perform their respective obligations so that the Project may be completed in accordance with this Agreement. The term Day shall mean calendar day unless otherwise specifically defined.

5.              CHANGE ORDERS. When Contractor orders in writing, Subcontractor, without nullifying this Agreement, shall make any and all changes in Subcontract Work, which are within the general scope of this Agreement. Any adjustment in the Subcontract Amount or time of performance shall be authorized by a Change Order. No adjustments shall be made for any changes performed by Subcontractor that have not been ordered by Contractor. A Change Order is a written instrument prepared by Contractor and signed by Subcontractor stating their agreement upon the change in Subcontract Work. If commencement and/or progress of Subcontract Work is delayed without the fault or responsibility of Subcontractor, the time for Subcontract Work shall be extended by Change Order to the extent obtained by Contractor, and the Subcontract Progress Schedule shall be revised accordingly.

6.              PAYMENT.

6.1.           PROGRESS AND FINAL PAYMENTS. Progress payments shall be made to Subcontractor, for Subcontract Work satisfactorily performed, no later than thirty (30) Days after receipt by Contractor of payment from Owner for Subcontract Work. Final payment of the balance due shall be made to Subcontractor no later than thirty (30) Days after receipt by Contractor of final payment from Owner for Subcontract Work. These payments are subject to receipt of such lien waivers, affidavits, warranties, guarantees or other documentation required by this Agreement, Contractor or Owner. If payment from Owner for such Subcontract Work is not received by Contractor, through no fault of Subcontractor, Contractor will make payment to Subcontractor within a reasonable time for Subcontract Work satisfactorily performed.

7.  WAIVER OF CLAIMS. Final payment shall constitute a waiver of all claims by Subcontractor relating to Subcontract Work but shall in no way relieve Subcontractor of liability for warranties, or for nonconforming or defective work discovered after final payment, nor relieve the Contractor for claims made in writing by the Subcontractor prior to its application for final payment as unsettled at the time of such payment.

8.              INDEMNITY. To the fullest extent permitted by law, Subcontractor shall indemnify and hold harmless Contractor, Contractor’s other subcontractors, Contractor, Design Professional, Owner and their agents, consultants, employees and others as required by this Agreement from all claims for bodily injury and property damage other than the Subcontract Work itself that may arise from performance of Subcontract Work but only to the extent caused by the negligent acts or omissions of Subcontractor, Subcontractor’s subcontractors or anyone employed directly or indirectly by any of them or by anyone for whose acts any of them may be liable.

9.              CONTRACTOR’S RIGHT TO PERFORM SUBCONTRACTOR’S RESPONSIBILITIES AND TERMINATION OF AGREEMENT
9.1.           FAILURE OF PERFORMANCE. Should Subcontractor fail to satisfy contractual deficiencies or to commence and continue satisfactory correction of the default with diligence or promptness within three

(3) Business Days from receipt of Contractor’s written notice, then Contractor, without prejudice to any right or remedies, shall have the right to take whatever steps it deems necessary to correct deficiencies and charge the cost thereof to Subcontractor, who shall be liable for such payment, including reasonable overhead, profit and attorneys’ fees. In the event of an emergency affecting safety of persons or property, Contractor may proceed as above without notice, but Contractor shall give Subcontractor notice promptly after the fact as a precondition of cost recovery.

9.2.           TERMINATION BY OWNER. Should Owner terminate the prime agreement, or any part which includes Subcontract Work, Contractor shall notify Subcontractor in writing within three (3) business Days of termination and, upon written notification, this Agreement shall be terminated and Subcontractor shall immediately stop Subcontract Work, follow all of Contractor’s instructions, and mitigate all costs. In the event of such termination, Contractor liability to Subcontractor shall be limited to the extent of Contractor recovery on Subcontractor’s behalf under the subcontract agreement. Contractor agrees to cooperate with Subcontractor, at Subcontractor’s expense, in the prosecution of any Subcontractor claim arising out of Owner or Contractor termination and to permit Subcontractor to prosecute the claim, in the name of Contractor, for the use and benefit of Subcontractor, or assign the claim to Subcontractor.

10.            TERMINATION BY CONTRACTOR. If Subcontractor fails to commence and satisfactorily continue correction of a default within three (3) business Days after written notification issued under section 11.1, then Contractor may, in lieu of or in addition to section 11.1, issue a second written notification, to Subcontractor. Such notice shall state that if Subcontractor fails to commence and continue correction of a default within seven (7) Days of the written notification, the Agreement will be deemed terminated. A written notice of termination shall be issued by Contractor to Subcontractor at the time Subcontractor is terminated. Subcontractor may furnish those materials, equipment and/or employ such workers or subcontractors as Subcontractor deems necessary to maintain the orderly progress of Subcontractor’s work. All costs incurred by Subcontractor in performing Subcontract Work, including reasonable overhead, profit and attorneys’ fees, costs and expenses, shall be deducted from any monies

due or to become due Subcontractor. Subcontractor shall be liable for payment of any amount by which such expense may exceed the unpaid balance of the Subcontract Amount. At Subcontractor’s request, Subcontractor shall provide a detailed accounting of the costs to finish Subcontract Work.

10.1.        TERMINATION BY SUBCONTRACTOR. If Subcontract Work has been stopped for thirty (30) days because Subcontractor has not received progress payments or has been abandoned or suspended for an unreasonable period of time not due to the fault or neglect of Subcontractor, then Subcontractor may terminate this Agreement upon giving Contractor seven (7) Days’ written notice. Upon such termination, Subcontractor shall be entitled to recover from Contractor payment for all Subcontract Work satisfactorily performed but not yet paid for, including reasonable overhead. However, if Owner has not paid Contractor for the satisfactory performance of Subcontract Work through no fault or neglect of Contractor, and Subcontractor terminates this Agreement under this article because it has not received corresponding progress payments, Subcontractor shall be entitled to recover from Contractor, within a reasonable period of time following termination, payment for all Subcontract Work satisfactorily performed but not yet paid for, including reasonable overhead and profit. Contractor’s liability for any other damages claimed by Subcontractor under such circumstances shall be extinguished by Contractor pursuing said damages and claims against Owner, on Subcontractor’s behalf, in the manner provided for in section 11.2.

11.                   CLAIMS AND DISPUTES.
11.1.        CLAIMS RELATING TO SUBCONTRACTOR Subcontractor shall give Contractor written notice of all claims within seven (7) Days of Subcontractor’s knowledge of facts giving rise to the event for which claim is made; otherwise, such claims shall be deemed waived. All unresolved claims, disputes and other matters in question between Contractor and Subcontractor shall be resolved in the manner provided in this Agreement.

11.2.        DAMAGES. If assessed against a Contractor, Subcontractor may be assessed a share of the damages in proportion to Subcontractor’s share of responsibility for the delay for the following liquidated or other damages as follows:

11.3.        MEDIATION Disputes between Contractor and Subcontractor not resolved by direct discussion shall be submitted to mediation pursuant to the Construction Industry Mediation Rules of the American Arbitration Association. The Parties shall select the mediator within fifteen (15) Days of the request for mediation. Engaging in mediation is a condition precedent to any form of binding dispute resolution.

11.4.        Binding Dispute Resolution. If neither direct discussions nor mediation successfully resolves the dispute, the Parties shall submit the matter to the binding dispute resolution procedure selected below:

ARBITRATION Unless the Parties mutually agree otherwise in writing, all claims, disputes and matters in question arising out of, or relating to, this Agreement shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the AAA then in effect. The expenses of arbitration or mediation shall be shared equally by the parties. The arbiter shall have the authority to award costs and fees to the prevailing party as set forth herein.

11.4.1.     VENUE The venue of any binding dispute resolution procedure shall be Waukesha County, Wisconsin, unless the Parties agree on a mutually convenient location.

11.4.2.     Neither Party may commence arbitration if the claim or cause of action would be barred by the applicable statute of limitations had the claim or cause of action been filed in a state or federal court. Receipt of a demand for arbitration by the person or entity administering the arbitration shall constitute the commencement of legal proceedings for the purposes of determining whether a claim or cause of action is barred by the applicable statute of limitations.

11.4.3.     An award entered in an arbitration proceeding pursuant to this Agreement shall be final and binding upon the Parties, and judgment may be entered upon an award in any court having jurisdiction.

12.            JOINT DRAFTING The Parties expressly agree that this Agreement was jointly drafted, and that they both had opportunity to negotiate terms and to obtain assistance of counsel in reviewing terms prior to execution. This Agreement shall be construed neither against nor in favor of either Party but shall be construed in a neutral manner.

MISCELLANEOUS
7.1.   The Subcontractor shall use its best care, skill and diligence in supervising and directing the Subcontract Work. The Subcontractor shall have responsibility and control over the performance of the Subcontract Work, including the construction methods, techniques, requirements, means and sequences for coordinating and completing the various portions of the Subcontract Work, unless the Subcontract gives other specific instructions concerning these matters. The Subcontractor shall provide to the Contractor a list of its proposed subcontractors and suppliers.

7.2.   The Subcontractor shall be responsible for taking field dimensions, providing tests, ordering of materials and all other actions as required to perform the Subcontract Work and to comply with the Schedule of Work.

7.3.  The Subcontractor acknowledges that it has visited the Project site and visually inspected the general and local conditions which could affect the Subcontract Work. Any failure of the Subcontractor to reasonably ascertain from a visual inspection of the site, the general and local conditions which could affect the Subcontract Work, will not relieve the Subcontractor from its responsibility to properly complete the Subcontract. Subcontractor acknowledges that it is familiar with the applicable laws and regulations regarding the Subcontract Work and that the Subcontract Work shall be performed in accordance with all applicable laws and regulations.

7.4.  The Contractor and Subcontractor shall abide by the requirements of 41 CFR §§ 60-1.4(a), 60- 300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, or national origin. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, national origin, protected veteran status or disability.
 

7.5.  WARRANTY. The Subcontractor warrants its work against all deficiencies and defects in materials and/or workmanship for a period of one (1) year from the date(s) of substantial completion of all or each designated portion of the Subcontract Work or acceptance or use by the Contractor or Owner of each designated area, system, equipment and/or item, whichever is sooner. The Subcontractor further agrees to furnish any special warranties that shall be required in accordance with the Subcontract Documents for the Subcontract Work prior to final payment. The Subcontractor agrees to satisfy such warranty obligations which appear within the warranty period, including extension of the warrantee period, if any, established in the Subcontract Documents without cost to the Owner or the Contractor.

Systec LTD of Wisconsin, LLC 12645 Burleigh Road Suite 10

Brookfield, WI 53005

ti**@*******td.com 262-790-1553

Exhibit A – Subcontract Work

Per Purchase Order or proposal presented to Systec LTD of Wisconsin, Inc.

Exhibit B – Insurance Requirements

Contractor shall, at contractors sole expense, obtain and maintain insurance coverage as outlined below and provide a certificate of insurance evidencing same prior to the commencement of work and annually no less than 10 days prior to policy expiration.

A.    Workers. Compensation and Employer’s Liability: Contractor shall purchase and maintain workers. compensation and employer’s liability insurance with policy limits of not less than State Statutory requirements. No owner or officer providing work or visiting job site can be excluded from coverage, regardless of state statute options.

B.     Commercial General Liability. Claims Covered: Contractor shall purchase and maintain commercial general liability insurance, covering all operations by or on behalf of Contractor, on an occurrence basis. Contractor’s commercial liability policy must be written on an Insurance Services Organization, Inc. (ISO) commercial general liability form CG 00 01 or its equivalent (occurrence form) and include the following coverages and endorsements:

a.  Such insurance must be maintained for three years after final payment.

b.   Contractor shall furnish each additional insured (as identified in the Supplementary Conditions or elsewhere in the Contract) evidence of continuation of such insurance at final payment and three years thereafter.

c.   Additional insured endorsements that include both ongoing operations and products and completed operations coverage through ISO Endorsements CG 20 10 10 01 and CG20 37 10 01 or their equivalents.

Commercial General Liability Policy limits of not less than:

General Aggregate $2,000,000

Products Completed Operations Aggregate $1,000,000 Personal and Advertising Injury $1,000,000

Bodily Injury and Property Damage Each Occurrence $1,000,000

Commercial General Liability. Excluded Content: The commercial general liability insurance policy, including its coverages, endorsements, and incorporated provisions, must not include any of the following:

•     Any provisions resulting in the erosion of insurance limits by defense costs other than those already incorporated in ISO form CG 00 01.

•     Any exclusion for the insured’s vicarious liability, strict liability, or statutory liability (other than

worker’s compensation).

•     Any limitation or exclusion based on the nature of Contractor’s work.

•     Any professional liability exclusion broader in effect than the most recent edition of ISO form CG 22 79.

C.    Automobile Liability: Contractor shall purchase and maintain automobile liability insurance for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance, or use of any motor vehicle. The automobile liability policy must be written on an occurrence basis.

Automobile Liability Policy limits of not less than $1,000,000

Property Damage Each Accident $1,000,000

D.    Umbrella or Excess Liability: Contractor shall purchase and maintain umbrella or excess liability insurance written over the underlying employer’s liability, commercial general liability, and automobile liability insurance described in the Paragraphs above. Subject to industry-standard exclusions, the coverage afforded must be at least as broad as that of each and every one of the underlying policies.

Excess or Umbrella Liability Policy limits of not less than:

Each Occurrence $3,000,000 General Aggregate $3,000,000

Using Umbrella or Excess Liability Insurance to Meet CGL and Other Policy Limit

Requirements: Contractor may meet the policy limits specified for employer’s liability, commercial general liability, and automobile liability through the primary policies alone, or through combinations of the primary insurance policy’s policy limits and partial attribution of the policy limits of an umbrella or excess liability policy that is at least as broad in coverage as that of the underlying policy, as specified herein. If such umbrella or excess liability policy was required under this Contract, at a specified minimum policy limit, such umbrella or excess policy must retain a minimum limit of $3,000,000 after accounting for partial attribution of its limits to underlying policies, as allowed above.

E.    Contractors Professional Liability Insurance : If Contractor will provide or furnish professional services under this Contract, through a delegation of professional design services or otherwise, then Contractor shall be responsible for purchasing and maintaining applicable professional liability insurance. This insurance must cover negligent acts, errors, or omissions in the performance of professional design or related services by the insured or others for whom the insured is legally liable. The insurance must be maintained throughout the duration of the Contract and for a minimum of two years after Substantial Completion. The retroactive date on the policy must pre-date the commencement of furnishing services on the Project.

Contractor’s Professional Liability Policy limits of not less than:

Each Claim $5,000,000 Annual Aggregate $5,000,000

For design professional additional insureds, ISO Endorsement CG 20 32 Additional Insured Engineers, Architects or Surveyors Not Engaged by the Named Insured. or its equivalent.

Other

Waiver of Rights

All policies purchased shall contain provisions to the effect that in the event of payment of any loss or damage the insurers will have no rights of recovery against any insureds thereunder, or against its consultants, or their officers, directors, members, partners, employees, agents, consultants, or subcontractors.

Additional Insureds: The commercial general liability, automobile liability, umbrella or excess policies must include as additional insureds the following:

1.   Systec LTD of Wisconsin, Inc.

2.   Project Owner