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GENERAL CONDITIONS OF SUBCONTRACT (Illinois)

August 26, 2013 McShane Construction Company LLC of 28

INDEX

ARTICLE 1. CONTRACT DOCUMENTS ................................................................................................ 3 1.1 DEFINITIONS ........................................................................................................................... 3 1.2 EXECUTION, CORRELATION, INTENT AND INTERPRETATIONS ...................................... 3 1.3 COPIES FURNISHED AND OWNERSHIP ............................................................................... 5

ARTICLE 2. ADMINISTRATION OF THE WORK ................................................................................... 5 2.1 GENERAL ADMINISTRATION ................................................................................................ 5 2.2 McSHANE’S RIGHT TO STOP THE WORK ............................................................................ 5

ARTICLE 3. SUBCONTRACTORS ......................................................................................................... 5 3.1 SKILL AND EXPERTISE .......................................................................................................... 5 3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS: BINDING NATURE .... 5 3.3 SUPERVISION AND CONSTRUCTION PROCEDURES......................................................... 6 3.4 LABOR, MATERIALS AND DESIGN ....................................................................................... 6 3.5 WARRANTY ............................................................................................................................. 7 3.6 TAXES ...................................................................................................................................... 8 3.7 PERMITS, FEES AND NOTICES, COMPLIANCE WITH LAWS ............................................. 8 3.8 CASH ALLOWANCES ............................................................................................................. 9 3.9 UNIT PRICES ........................................................................................................................... 9 3.10 SUPERINTENDENT ................................................................................................................. 9 3.11 RESPONSIBILITY FOR THOSE PERFORMING THE WORK ................................................ 9 3.12 PROGRESS SCHEDULE ....................................................................................................... 10 3.13 SHOP DRAWINGS, PRODUCT DATA, SAMPLES AND FIELD MEASUREMENTS ........... 10 3.14 USE OF SITE .......................................................................................................................... 11 3.15 CUTTING AND PATCHING OF WORK ................................................................................. 11 3.16 CLEANING UP ....................................................................................................................... 12 3.17 COMMUNICATION ................................................................................................................. 12 3.18 SIGNS, ADVERTISING, PHOTOGRAPHY AND CONFIDENTIAL INFORMATION ............. 12

ARTICLE 4. SUB-SUBCONTRACTORS .............................................................................................. 12 4.1 AWARD OF SUB-SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE

WORK ..................................................................................................................................... 12 4.2 SUBCONTRACTUAL RELATIONS ....................................................................................... 13 4.3 PAYMENTS TO SUB-SUBCONTRACTORS ......................................................................... 13

ARTICLE 5. SEPARATE SUBCONTRACTS ........................................................................................ 14 5.1 McSHANE’S RIGHT TO AWARD SEPARATE SUBCONTRACTS ....................................... 14 5.2 MUTUAL RESPONSIBILITY OF SUBCONTRACTORS........................................................ 14

ARTICLE 6. MISCELLANEOUS PROVISIONS .................................................................................... 14 6.1 GOVERNING LAW ................................................................................................................. 14 6.2 SUCCESSORS AND ASSIGNS ............................................................................................. 14 6.3 WRITTEN NOTICE ................................................................................................................. 15 6.4 CLAIMS FOR DAMAGES ...................................................................................................... 15 6.5 PERFORMANCE BOND AND LABOR AND MATERIAL PAYMENT BOND ....................... 15 6.6 RIGHTS AND REMEDIES ...................................................................................................... 16 6.7 ROYALTIES AND PATENTS ................................................................................................. 16 6.8 TESTS ..................................................................................................................................... 16 6.9 DISPUTE RESOLUTION ........................................................................................................ 17 6.10 INDEMNITY ............................................................................................................................ 17

ARTICLE 7. TIME .................................................................................................................................. 18



7.1 DEFINITIONS ......................................................................................................................... 18 7.2 PROGRESS AND COMPLETION .......................................................................................... 18 7.3 DELAYS AND EXTENSIONS OF TIME ................................................................................. 18

ARTICLE 8. PAYMENTS AND COMPLETION ..................................................................................... 20 8.1 SUBCONTRACT SUM ........................................................................................................... 20 8.2 SCHEDULE OF VALUES ....................................................................................................... 20 8.3 PROGRESS PAYMENTS ....................................................................................................... 20 8.4 APPROVAL OF PAYMENT .................................................................................................... 21 8.5 PAYMENTS WITHHELD ........................................................................................................ 22 8.6 SUBSTANTIAL COMPLETION, LIEN WAIVERS AND FINAL PAYMENT ........................... 22

ARTICLE 9. PROTECTION OF PERSONS AND PROPERTY ............................................................. 23 9.1 SAFETY PRECAUTIONS AND PROGRAMS ........................................................................ 23 9.2 SAFETY OF PERSONS AND PROPERTY ............................................................................ 23 9.3 EMERGENCIES ...................................................................................................................... 24

ARTICLE 10. INSURANCE ................................................................................................................... 24 ARTICLE 11. CHANGES IN THE WORK ............................................................................................. 24

11. 1 CHANGE ORDERS ................................................................................................................ 24 11.2 CLAIMS FOR ADDITIONAL COST ........................................................................................ 25 11.3 MINOR CHANGES IN THE WORK ........................................................................................ 25

ARTICLE 12. UNCOVERING AND CORRECTION OF WORK ............................................................ 25 12.1 UNCOVERING OF WORK ..................................................................................................... 25 12.2 CORRECTION OF WORK ...................................................................................................... 25

ARTICLE 13. DEFAULT, SUPPLEMENTATION AND TERMINATION OF THE SUBCONTRACT ... 26 13.1 DEFAULT AND SUPPLEMENTATION OR TERMINATION BY McSHANE ......................... 26 13.2 TERMINATION FOR CONVENIENCE ................................................................................... 27

ARTICLE 14. EMPLOYMENT PRACTICES ......................................................................................... 28 14.1 NONDISCRIMINATION POLICY ............................................................................................ 28 14.2 GIFT POLICY .......................................................................................................................... 28



ARTICLE 1. CONTRACT DOCUMENTS §1.1 DEFINITIONS §1.1.1 THE CONTRACT DOCUMENTS The Contract Documents consist of the Subcontract, the Conditions of the Subcontract (General, Special, Supplementary and other Conditions), the Drawings, the Specifications, all Addenda issued prior to execution of the Subcontract, and all Amendments, Modifications and Change Orders issued after execution of the Subcontract and any other documents as specified in Rider "C" to the Subcontract. If any term or provision of any of the Contract Documents is found to be void or unenforceable under applicable law, such event shall not render the Subcontract or such Contract Documents entirely void and unenforceable. Rather, the Subcontract and Contact Documents shall be deemed revised and reformed so as to give maximum effect to the intent of the parties thereunder, consistent with applicable law. §1.1.2 THE OWNER The Owner is the person, firm, entity or corporation identified as such in the Subcontract. The term Owner means the Owner or its authorized representative. §1.1.3 McSHANE McShane Construction Company LLC and its authorized representatives, agents, consultants, and employees, hereafter referred to as "McShane", has entered into an agreement with the Owner to design and/or construct the Work. §1.1.4 THE PROJECT The Project is the total construction of which the Work performed under the Contract Documents may be the whole or a part. §1.1.5 THE WORK The term Work includes all design, labor, materials, skill, equipment, taxes, services, delivery charges, supervision, administration, facilities, and field measurement necessary to produce or incidental to the construction required by the applicable Contract Documents. §1.1.6 THE SUBCONTRACTOR The Subcontractor is the person, firm or corporation identified as such in the Subcontract. The Subcontractor means the Subcontractor or its authorized representative. §1.1.7 THE SUB-SUBCONTRACTOR A Sub-subcontractor is a person or organization who has a direct or indirect contract with Subcontractor to supply materials or equipment for the Work or perform any of the Work. Sub-subcontractor means a Sub-subcontractor or an authorized representative thereof. Nothing contained in the Contract Documents shall create any contractual relationship between McShane or Owner and any Sub-subcontractor. §1.1.8 THE SUBCONTRACT The Contract Documents form the Subcontract between McShane and the Subcontractor. The Subcontract represents the entire agreement and supersedes all prior negotiations, representations, or agreements, either written or oral. The Subcontract may be amended or modified only by written Change Order. The Subcontract shall not be construed to create any third party rights or other contractual rights on behalf of Subcontractor against the Owner or any other person or entity not a party to the Subcontract. §1.1.9 “Architect/Engineer” is the entity or entities identified as such in the Subcontract. §1.2 EXECUTION, CORRELATION, INTENT AND INTERPRETATIONS



§1.2.1 By executing the Subcontract, Subcontractor represents that Subcontractor has carefully read and understands the Contract Documents, has investigated the nature, locality and site of the Work and has visited the site, become familiar with the local conditions and difficulties under which the Work is to be performed, and correlated personal observations with the requirements of the Contract Documents. Subcontractor acknowledges that it enters into the Subcontract on the basis of its own examination, investigation and evaluation of all such matters and not in reliance upon any opinions or representations of McShane or of the Owner, or any of their respective officers, agents or employees. The Subcontractor further warrants that McShane has made no representations of any kind or nature not contained in this Subcontract. .1 Subcontractor acknowledges that it has been furnished the opportunity to review all reports of a technical

nature in possession of McShane relating to the Work and further acknowledges that to the extent that such reports affect its performance hereunder, it has reviewed same prior to the execution of the Subcontract.

2. By executing this Subcontract, Subcontractor acknowledges and agrees that the Contract Documents are adequate and sufficient to perform and complete of all the Work shown or reasonably inferable from the Contract Documents.

3. In the event Subcontractor knowingly performs Work on or adjacent to defective work provided by others, or provides or knowingly performs Work in violation of any Code requirements, statutes, laws or regulations, Subcontractor shall be fully responsible for and shall indemnify McShane from all damages caused thereby, including the costs to remove and replace its Work and any work of other subcontractors, McShane, or the Owner’s forces or separate contractors affected thereby.

§1.2.2 The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work. The Contract Documents are complementary, and what is required by any one shall be as binding as if required by all unless expressly stated otherwise. Performance by the Subcontractor shall be required to the extent consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the intended results. All Work shown on the drawings but not specified, or specified but not shown on the drawings, shall be performed by Subcontractor under the terms of this Subcontract, and shall not constitute the basis for a claim by Subcontractor for an increase in the Subcontract Price, or for an extension of time within which to complete its Work. .1 In case of any conflict, Subcontractor shall comply with the highest or most stringent standard. In the

event of a conflict between drawings and specifications affecting quantity or quality requirements, the greater amount shall be required in questions of quantity and the higher quality shall be required in questions of quality. Words and abbreviations in the Contract Documents which have well-known technical or trade meanings are used in accordance with such recognized meanings. References to published or association standards shall mean the latest edition of such standards at the time of execution of the Subcontract, unless specifically referred to by edition date or revision number.

§1.2.3 McShane shall be the interpreter of the Contract Documents and upon written request of Subcontractor, shall issue written interpretations necessary for the proper execution or progress of the Work in the form of drawings or otherwise, with reasonable promptness. All interpretations of McShane shall be consistent with the intent of and reasonably inferable from the Contract Documents and will be in writing and/or in the form of drawings. All requests for interpretations shall be directed in writing to McShane’s Project Manager. McShane will not be liable to the Subcontractor as a result of any interpretation or decision rendered in good faith in such capacity. The organization of the Specifications into divisions, sections and articles, and the arrangements of Drawings shall not be controlling in dividing the Work among Subcontractors or in establishing the extent of Work to be performed by any trade. §1.2.4 McShane will have authority to reject Work that does not conform to the Contract Documents. Whenever, in its opinion, McShane considers it necessary or advisable for the implementation of the intent of the Contract Documents, McShane will have authority to require special inspection or testing of the Work in accordance with Subparagraph 6.8.2 whether or not such Work be then fabricated, installed or completed. However, neither McShane’s authority to act under this Subparagraph 1.2.4, nor any decision made by McShane in good faith



either to exercise or not to exercise such authority, shall give rise to any duty or responsibility of McShane to the Subcontractor, any Sub-subcontractor, any of their agents or employees, or any other person performing any of the Work. §1.3 COPIES FURNISHED AND OWNERSHIP §1.3.1 Subcontractor will be furnished, free of charge, via McShane project FTP site or other electronic means, with applicable Drawings and Specifications reasonably necessary for the execution of the Work. Hard copies shall be provided by McShane for a reasonable charge. §1.3.2 All drawings, specifications and copies thereof furnished by McShane shall remain McShane’s property, and shall not to be used in respect to the design or construction of any other project and are to be returned to McShane on request at the completion of the Work. Submission or distribution to meet official regulatory requirements or for other purposes in connection with the Project is not to be construed as publication in derogation of McShane’s or Owner’s common law copyright or other reserved rights. ARTICLE 2. ADMINISTRATION OF THE WORK §2.1 GENERAL ADMINISTRATION §2.1.1 McShane will provide the general administration of the Project as herein described and shall control the Construction Schedule. McShane will not be responsible for Subcontractor’s construction means, methods, techniques, sequences or procedures, or, for safety precautions and programs in connection with the Work. §2.1.2 Neither McShane nor any of its hired engineers, consultants, or architects nor the Architect/Engineer shall be required to make on-site inspections to check the quality or quantity of the Work. Subcontractor shall not be relieved of responsibility for Subcontractor’s failure to carry out the Work in accordance with the Contract Documents by reason of any inspection or lack of inspection by McShane, the Owner, or their agents or consultants. Nothing herein shall relieve Subcontractor or its architects or engineers from responsibility for inspection (or lack thereof) as may otherwise be required or for defects, errors or omissions in design work by Subcontractor or its architects and engineers. §2.1.3 McShane will determine the dates of Substantial Completion and Final Completion, and Subcontractor will deliver to McShane written warranties and related documents required by the Subcontract which shall be assembled by the Subcontractor. §2.2 McSHANE’S RIGHT TO STOP THE WORK §2.2.1 If the Subcontractor fails to correct defective Work as required by Paragraph 12.2 or fails to carry out the Work in accordance with the Contract Documents, McShane (without prejudice to McShane’s rights under Article 2 hereof) may order the Subcontractor to stop the Work, or any portion thereof, until the cause for such order has been eliminated. .1 Subcontractor waives any and all claims for damage from McShane as a result of any stop work order issued in accordance with the above provisions and Subcontractor shall be fully responsible for and shall indemnify McShane from all damages caused thereby. ARTICLE 3. SUBCONTRACTORS §3.1 SKILL AND EXPERTISE §3.1.1 Subcontractor represents that it is skilled and expert in its trade and acknowledges that McShane is relying upon Subcontractor’s skill and expertise in the design and/or construction of the Work. §3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS: BINDING NATURE §3.2.1 Subcontractor within one (1) business day after discovery shall report to McShane in writing any error, inconsistency or omission Subcontractor may discover in the Contract Documents. Subcontractor shall do no Work without Contract Documents authorizing same. McShane shall not be liable to the Subcontractor for any damages to the Subcontractor due to errors, inconsistencies or omissions that a careful review of the documents would have disclosed.



§3.2.2 Subcontractor shall take field measurements and verify field conditions and shall carefully compare such field measurements and conditions and other information known to the Subcontractor with the Contract Documents before commencing activities. Errors, inconsistencies, or omissions discovered shall be reported to McShane in writing within one (1) business day after discovery. §3.2.3 Commencement of the Work or any portion thereof by Subcontractor shall be conclusive evidence that the jobsite, or that part thereof at which the Work is being performed, is in proper condition for the reception and installation of the Work. Subcontractor further warrants and represents that it has taken into account the availability and costs of labor and materials, tools, and equipment, the Owner’s and McShane’s scheduling requirements, and potential for Project congestion caused by the work of others proceeding simultaneously with Subcontractor’s Work. §3.3 SUPERVISION AND CONSTRUCTION PROCEDURES §3.3.1 Subcontractor shall supervise and direct the Work using Subcontractor’s best skill and attention; provided, however, if a higher standard is required to conform to requirements of good and generally accepted construction practice, the Work shall comply with such higher standard, and shall exercise its own means and methods in accomplishing the Work and is responsible for the incidental aspects and operative details of such Work. Subcontractor shall be solely responsible for construction safety and for all construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work except that Subcontractor shall comply with all reasonable requirements as to means, methods, techniques, sequences and procedures requested by McShane. §3.3.2 Neither observations nor inspections, tests or approvals by persons other than the Subcontractor shall relieve the Subcontractor from its obligations to perform the Work in accordance with the Contract Documents. §3.4 LABOR, MATERIALS AND DESIGN §3.4.1 Unless otherwise specifically noted, Subcontractor shall provide and pay for all design, labor, materials, taxes, delivery charges, skill, competent supervision, equipment, services, tools, construction equipment and machinery, transportation, and other facilities and services necessary for the proper execution and completion of the Work. Subcontractor represents and warrants that all design furnished by or through Subcontractor shall be free from errors and omissions and shall conform to all applicable building codes, ordinances and to the requirements of the Contract Documents; provided, however, if a higher standard is required to conform to requirements of good and generally accepted engineering practice, such design shall also comply with such higher standard. Subcontractor is responsible for dimensional consistency and interference analysis in its drawings and in shop drawing submittals. Such responsibility relates to design provided by Subcontractor and to coordination of the Work with the design and installation of other trade work. §3.4.2 Notwithstanding any references in the specifications to any article, device, product, material, fixture, form, or type of construction by name, make, or catalog number, such references shall be interpreted as establishing a standard of quality and shall not be construed as limiting competition. Subcontractor may submit requests for approval of substitute articles, devices, materials, fixtures, forms, or types of construction. Such substitutions may not be incorporated in the construction without the written approval of McShane. .1 Request for substitution shall be made in writing at the time of bid and shall be accompanied by all

pertinent data necessary for an adequate comparison. In the case of mechanical equipment, also submit data to prove that the performance of the substitute equipment is equal to equipment specified. In addition, ductwork, wiring, and other components, as designed, shall meet the requirements of the manufacturer of the proposed substitute equipment, and the manufacturer’s written approval shall be provided.

§3.4.3 It shall be the responsibility of Subcontractor to order and schedule delivery of materials in ample time to avoid delays in construction. If an item is found to be unavailable, Subcontractor shall notify McShane within one (1) business day after discovery of the pending delay to provide sufficient time to select a suitable substitute. If



Subcontractor fails to order materials in ample time to avoid delays in construction, an approved material shall be substituted at no extra cost to McShane and without delay to the Construction Schedule. §3.4.4 The Subcontractor agrees to employ qualified employees for the installation of the Work. The Subcontractor shall make all necessary arrangements to reconcile, without delay, damage or cost to McShane and without recourse to McShane or the Owner, any conflict between the Contract Documents and any agreements or regulations of any kind at any time in force among members or councils which regulate or distinguish what activities shall not be included in the Work of any particular trade. In case the progress of the Work is affected by any undue delay in furnishing or installing any items or materials or equipment required under the Contract Documents because of the conflict involving any such agreement or regulation, McShane may require that other material or equipment of equal kind and quality be provided at no additional cost to the Owner. .1 In addition, should Subcontractor or any of its Sub-subcontractors employ workers who cause or

participate in strikes, work stoppages, slowdowns, or any other disturbance of Work, any and all such disruptions shall be deemed within the control of Subcontractor and shall fully entitle McShane to all legal rights and remedies and to all remedies provided for in the Contract Documents. Should there be any picketing on the job site and McShane establishes a reserve gate for the Subcontractor’s and the Sub-subcontractor’s purpose, it shall be the obligation of the Subcontractor and all Sub-subcontractors to utilize such gate for the proper performance of Work without interruption or delay.

§3.4.5 Subcontractor shall at all times enforce safety precautions and programs as required by Article 9 and enforce strict discipline and good order among its employees and shall not employ on the Work any unfit person or anyone not skilled in the task assigned to Subcontractor. Subcontractor shall terminate the employment on the Work of any of its employees failing to follow established safety procedures or programs. §3.4.6 Where it is necessary to work within or connect to occupied facilities, as required or may be implied by the Contract Documents, Subcontractor shall provide all precautionary measures necessary for the comfort and safety of the occupants, to protect the facilities and equipment from damage, and to minimize the disruption of normal business operations. Such Work shall be performed on a schedule acceptable to McShane and in accordance with the Contract Documents, and all costs associated therewith, including premium time, shall be paid by Subcontractor. §3.4.7 McShane’s equipment shall not be available to Subcontractor unless otherwise expressly agreed in writing. §3.4.8 Subcontractor will be responsible at its sole cost and expense for all unloading, securing and protecting, hoisting and handling of materials and equipment necessary for performance of the Work. McShane reserves the right to require the Subcontractor to provide additional precautionary measures necessary to ensure compliance with this Subparagraph 3.4.8. §3.5 WARRANTY §3.5.1 Subcontractor represents and warrants to McShane that all designs furnished by or through Subcontractor shall be free from errors and omissions and shall conform to the requirements of the Drawings and Specifications and shall be fit and proper for the use intended; provided, however, if a higher standard is required to conform to requirements of good and generally accepted engineering practice such design shall also comply with such requirements of good and generally accepted engineering practice. Subcontractor shall indemnify, defend and hold McShane harmless from any loss, claim, damage or expense arising or alleged to have arisen out of breach by Subcontractor of the foregoing representation and warranty. §3.5.2 Subcontractor warrants to McShane that all materials and equipment and systems furnished under this Subcontract will be new, unless otherwise specified, and that all Work will be of good quality, free from faults and defects in materials and workmanship, and in conformance with the Contract Documents. All Work not so conforming to these standards may be considered defective. If required by McShane, Subcontractor shall furnish satisfactory evidence as to the kind and quality of materials and equipment. Further, Subcontractor warrants that irrespective of the specification of materials, equipment, or systems in the Contract Documents, the materials,



equipment and systems furnished by Subcontractor are appropriate for the purposes specified and are safe for the applications implicit in the Drawings and Specifications. §3.5.3 Subcontractor warrants and represents and agrees to McShane that (i) it will not bring “hazardous substances” as defined by federal, state or local laws on the Project site and (ii) it will not incorporate “hazardous substances” as defined by federal, state or local laws into the Work without first notifying McShane and obtaining the prior written consent of McShane. Subcontractor shall in no event provide or install any material containing (a) asbestos or (b) any material or substance the installation or use of which as a part of the Project is prohibited by law. §3.5.4 All warranties shall begin at the date of Substantial Completion. §3.6 TAXES §3.6.1 Subcontractor shall pay all sales, consumer, use, gross receipts and other similar taxes required by law in respect to furnishing the Work or the transaction contemplated hereby. Sales or use taxes payable in respect to labor, materials, services, and other taxables shall be separately stated by Subcontractor on each request for payment in respect to the work or materials for which payment is requested. Upon McShane’s request (whether contemporaneous with or after payment by McShane), Subcontractor shall deliver to McShane a receipt for taxes applicable to work, materials, or services for which payment has been or is being made by Subcontractor. Any statement of a particular amount of tax on a request for payment or receipt shall not release Subcontractor from any obligation to pay taxes (whether in a greater or lesser amount) required to be paid by Subcontractor. Upon McShane’s request, Subcontractor shall provide McShane with a complete and detailed explanation of taxable items furnished or delivered by Subcontractor pursuant to the Contract Documents and the calculation of the applicable tax in respect thereto and proof of payment of any such tax which is due and payable. §3.6.2 Subcontractor shall pay, and keep the receipts or proof of payment, all fees and taxes imposed by any Federal, State or Local ordinance for any employment insurance, pensions, old age retirement funds or any similar purpose in respect to its employees and shall furnish all necessary reports and information to the appropriate Federal, State and Municipal agencies, with respect to all of the foregoing, and, if required by McShane, the same as if the Subcontractor were in fact the General Contractor, and to indemnify McShane from any loss or damage occasioned by the failure of Subcontractor to comply with the terms of this Subparagraph 3.6.2. §3.7 PERMITS, FEES AND NOTICES, COMPLIANCE WITH LAWS §3.7.1 McShane will pay for the general building permits. Subcontractor shall secure and pay for all other permits, governmental fees, environmental fees, and licenses necessary for or incidental to the proper execution and completion of their Work. It shall be the responsibility of all Subcontractors who are responsible for all or any portion of the design of the Work to make certain that the Drawings and Specifications to be prepared by or under it are in accordance with applicable laws, statutes, building codes and regulations; and in the event unspecified matters are required in respect to the Work to cause its compliance with such laws, statutes, building codes and regulations. The same shall be supplied by such Subcontractor at such Subcontractor’s sole cost and expense. §3.7.2 Subcontractor shall give all notices and comply and cause the Work to comply with all laws, ordinances, rules, regulations and orders of any public authority bearing on the performance of the Work. If Subcontractor observes or forms a belief that any of the Contract Documents are at variance therewith in any respect, Subcontractor shall within one (1) business day after first observing such variance notify McShane, in writing, and any necessary changes shall be made in the Contract Documents. If Subcontractor performs any Work contrary to such laws, ordinances, rules and regulations, Subcontractor shall assume full responsibility therefor and shall bear all costs attributable thereto. §3.7.3 Immigration Reform and Control Act of 1986 (IRCA) and E-Verify Compliance. .1 Subcontractor warrants that it is now, and will continue to be, in full compliance with IRCA and any

amendments thereto, specifically including all of its I-9 employer verification provisions. Subcontractor



warrants that it has an I-9 and verification policy which it implements throughout the company. Subcontractor warrants that it will continue to properly train its staff regarding the execution and retention of these I-9 employment verification forms. Should federal, state or local law or the Prime Contract require McShane and its Subcontractors to participate in the federal E-Verify employment eligibility verification system, Subcontractor agrees that it will do so.

.2 Subcontractor warrants that it is not now, and has not ever been, subject to an I-9 employer verification audit. Should Subcontractor ever be the subject of any government audit of its employer verification system or raid of its workers, Subcontractor will immediately notify McShane of such. Upon such notification, Subcontractor will allow McShane, should it so chose, to review Subcontractor’s I-9 and/or E-Verify employment verification policies and documentation. In addition, if so requested, Subcontractor will provide the I-9 documentation for all of Subcontractor’s employees that will provide services under the Subcontract at the Project. Subcontractor agrees to indemnify McShane for any legal fees, public relations costs, work stoppages, etc. related to Subcontractor’s employment of any unauthorized workers or the removal of any of Subcontractor’s workers by the government. The failure of Subcontractor to adequately comply with the employment verification laws is grounds for immediate termination of this Subcontract by McShane.

3. Subcontractor shall ensure that the same provisions found in this Subparagraph 3.7.3 shall be included in all agreements with Sub-subcontractors, including but not limited to, granting McShane the same review rights for such Sub-subcontractors’ I-9 and/or E-Verify employment verification policies and documentation.

§3.8 CASH ALLOWANCES §3.8.1 Subcontractor shall include in the Subcontract Sum all allowances stated in the Contract Documents. These allowances, unless otherwise provided, shall cover the cost to the Subcontractor, less any applicable trade discounts, of materials and equipment required by the allowance delivered and unloaded at the site and all applicable taxes, Subcontractor’s handling, unloading and storage costs on the site, labor and installation costs. Overhead, profit and other expenses in respect to the original allowance shall be included in the Subcontract Sum and not in the allowance. If the cost, when determined, is more than or less than the allowance, the Subcontract Sum shall be adjusted accordingly by Change Order, including additional handling costs, if any, on the site, labor, installation costs, overhead, profit and other expenses. §3.9 UNIT PRICES §3.9.1 Where unit prices are requested, the Subcontract shall include a schedule of unit prices that includes all material, labor, delivery charges, overhead, profit, and applicable taxes, to furnish and/or install the item designated. Unless otherwise noted, all unit prices shall be considered effective until that portion of the Work is completed. §3.10 SUPERINTENDENT §3.10.1 The Subcontractor shall employ a competent Superintendent and necessary assistants who shall be in attendance at the Project site during the progress of the Work. For safety reasons, the Superintendent shall demonstrate proficiency in the English language. This also applies to the assistant who may be in charge of the Work in the Superintendent’s absence. The Superintendent shall be satisfactory to McShane, and shall not be changed except with the consent of McShane, unless the Superintendent proves to be unsatisfactory to the Subcontractor or ceases to be in the Subcontractor’s employ. The Superintendent shall represent the Subcontractor and all communications given to the Superintendent shall be as binding as if given to the Subcontractor. Communications shall be confirmed in writing on written request from the Subcontractor. §3.10.2 Subcontractor’s Superintendent shall attend job meetings as required by McShane. McShane reserves the right to call weekly job progress meetings. All subcontractors notified to attend the meeting shall be required to attend to aid in the coordination of all trades. Failure of Subcontractor’s Superintendent to attend meetings shall entitle McShane to terminate the Subcontract. §3.11 RESPONSIBILITY FOR THOSE PERFORMING THE WORK



§3.11.1 Subcontractor shall be liable to McShane for the acts and omissions of all of the Subcontractor’s employees and agents and Sub-subcontractors, their agents and employees, and all other persons performing any of the Work at the direction of or under a contract with Subcontractor. §3.12 PROGRESS SCHEDULE §3.12.1 Upon request of McShane, Subcontractor shall immediately prepare and submit within three (3) business days for McShane’s approval an estimated progress schedule for the Work. The progress schedule shall be related to the entire Project to the extent required by the Contract Documents. This schedule shall indicate the dates for the starting and completion of the various stages of construction and shall be revised from time to time as necessary to conform to the requirements of McShane’s progress schedule and the Contract Documents. Anything hereunder to the contrary notwithstanding, Subcontractor shall be responsible for causing Subcontractor’s progress to conform to the requirements of McShane’s progress schedule, including the three (3) week short interval schedule discussed at the weekly job progress meetings, and the Contract Documents as they relate to commencement, progress and completion of the Work. In the event McShane alters the requirements related to commencement, and the progress of and completion of the Work, Subcontractor shall conform to such requirements. When required by McShane, Subcontractor shall furnish evidence satisfactory to McShane that Subcontractor can and will comply with the progress schedule and McShane shall have the right to inspect Subcontractor’s business and records to verify such compliance. At McShane’s request, Subcontractor shall file periodically with McShane a list of all critical items of materials and equipment, fabrication dates, delivery dates promised by suppliers and other information reasonably requested by McShane. §3.13 SHOP DRAWINGS, PRODUCT DATA, SAMPLES AND FIELD MEASUREMENTS §3.13.1 Shop Drawings are drawings, diagrams, schedules and other data especially prepared for the Work by the Subcontractor or any Sub-subcontractor, manufacturer, supplier or distributor to illustrate some portion of the Work. Shop Drawings shall be submitted in the form of one (1) set of prints and one (1) CD unless otherwise noted in the technical sections. McShane will review and stamp prints. McShane will retain one (1) copy and distribute prints as required. McShane will return one print of the shop drawings to Subcontractor. Subcontractor shall submit Shop Drawings, Product Data, Samples and similar submittals required by the Contract Documents with reasonable promptness (allowing a minimum of ten (10) business days for McShane’s review) and in such sequence as to cause no delay in the Project, the Work, or the activities of McShane or other subcontractors. All submittals shall be sent or delivered to McShane with a letter of transmittal which shall contain pertinent information relating to the submittals documents including, but not limited to, Subcontractor’s and supplier’s name, address, phone number and contact person; Project name; whether this is a first submission or resubmission; required lead times for delivery after approval; and information as to whether this is a complete submission or a partial one. §3.13.2 Product Data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by the Subcontractor to illustrate a material, product or system for some portion of the Work. Project Data shall be submitted in five (5) copies and one (1) CD forreview. Additional copies shall be provided if requested by McShane. Upon review, one (1) copy will be returned to Subcontractor. §3.13.3 Samples are physical examples and/or actual installations which illustrate materials, equipment or workmanship and establish standards by which the Work will be judged. §3.13.4 Subcontractor shall prepare, review, stamp with its approval and submit to McShane, with reasonable promptness and in orderly sequence so as to cause no delay in the Work, or in the Work of any other contractor, all Shop Drawings, Product Data, and Samples required by the Contract Documents or by McShane. Shop Drawings, Product Data and Samples shall be properly identified as specified, or as McShane may require. At the time of submission, Subcontractor shall inform McShane in writing of any deviation in the Shop Drawings or Samples from the requirements of the Contract Documents. §3.13.5 Shop Drawings, Product Data, and Samples shall be deemed McShane’s property.



§3.13.6 By approving and submitting the Shop Drawings, Product Data, and Samples, Subcontractor represents that Subcontractor has determined and verified all field measurements, field construction criteria, materials, catalog numbers and similar data, and that Subcontractor has checked and coordinated the information contained in such submittals with the requirements of the Work and of the Contract Documents. §3.13.7 McShane will review or cause Architect to review Shop Drawings, Product Data, and Samples with reasonable promptness (but not less than ten (10) business days) for general conformance with the design concept of the Work, and for conformance with the information given in the Contract Documents. McShane’s review of a separate item or of a whole system shall not indicate approval of an assembly in which the item or system functions, or of the total design of which the item or system is a part or its performance. Incomplete submittals by the Subcontractor will be rejected. §3.13.8 Subcontractor shall make corrections required by McShane and shall resubmit the required number of corrected copies of Shop Drawings or new Samples until satisfactory to McShane. Subcontractor shall direct specific attention, in writing, or on resubmitted Shop Drawings to revisions other than the corrections requested by McShane on previous submissions. §3.13.9 McShane’s review of Shop Drawings, Product Data, or Samples shall not release Subcontractor from responsibility for any deviation from the requirements of the Contract Documents, unless Subcontractor has informed McShane in writing of such deviation at or prior to the time of submission and McShane has given written approval of the specific deviation, nor shall McShane’s review relieve Subcontractor from responsibility for defects or errors and omissions in the Shop Drawings, Product Data, or Samples. .1 Failure to inform McShane of deviation may result in rejection of the Work as non-conforming Work under

the appropriate provisions of the Subcontract, and Subcontractor bears that risk and the entire cost of replacing non-conforming Work.

§3.13.10 No portion of the Work requiring Shop Drawings, Product Data, or Samples submission shall be commenced until the submission has been reviewed by McShane. All such portions of the Work shall be in accordance with reviewed submittals. §3.13.11 Subcontractor shall conform its Work to the Work of McShane and McShane’s separate Subcontractors according to field measurements. §3.14 USE OF SITE §3.14.1 The Subcontractor shall confine use of the site to areas designated by McShane, permitted by law, ordinances, permits and the Contract Documents, and shall not unreasonably burden the site with any materials or equipment. Subcontractor’s use of the site shall be subject to approval of McShane’s Superintendent. §3.15 CUTTING AND PATCHING OF WORK §3.15.1 The Subcontractor shall be responsible for all cutting, fitting or patching that may be required to complete the Work or to make its several parts fit together properly and shall provide protection of existing Work as required. §3.15.2 The Subcontractor shall not damage or endanger any portion of the Project or the Work of McShane, its Subcontractors, or any separate contractors by cutting, drilling, patching or otherwise altering any Work, or by excavation. The Subcontractor shall not cut or otherwise alter the Work of McShane or any other contractor or subcontractor except with the written consent of McShane and of such separate contractor. The Subcontractor shall not unreasonably withhold consent to cutting or otherwise altering such Work from McShane, its Subcontractors, or any separate contractor. §3.15.3 Any costs caused by Subcontractor’s defective or out-of-sequence Work shall be borne by Subcontractor.



§3.16 CLEANING UP §3.16.1 Subcontractor at all times shall keep the site free from accumulation of waste materials or rubbish caused by Subcontractor’s operation. At the completion of the Work, Subcontractor shall remove all its waste materials and rubbish from and about the Project, as well as all its tools, construction equipment, machinery and surplus materials, and shall clean all glass surfaces installed by the Subcontractor and leave the Work “broom clean” or its equivalent, except as otherwise specified. Subcontractor shall clean, repair, and restore materials, equipment, and surfaces damaged by Subcontractor to the original specified conditions. §3.16.2 Means for the disposal of waste materials and rubbish shall be furnished by the Subcontractor. Under no circumstances, unless approved in writing by McShane, shall Subcontractor use McShane’s trucks, dumpsters or trash cans. Under no circumstances shall Subcontractor use McShane’s trucks, dumpsters or trash cans for the disposal of hazardous materials. §3.16.3 If Subcontractor fails to clean up, within one (1) business day of being instructed to do so by McShane, McShane may clean up and costs thereof shall be charged to Subcontractor and deducted from any pending or subsequent Application for Payment. §3.16.4 If a dispute arises between the Subcontractors as to their responsibility for cleaning up, McShane may clean up and charge the costs thereof to the several Subcontractors as McShane shall determine to be fair and reasonable. §3.17 COMMUNICATION §3.17.1 Subcontractor shall forward all communications to McShane through McShane’s Project Manager. §3.18 SIGNS, ADVERTISING, PHOTOGRAPHY AND CONFIDENTIAL INFORMATION §3.18.1 Subcontractor shall not erect or display any sign or advertising at the Project site without McShane’s prior written consent. Subcontractor shall not take any photographs or videos of the Project, except for use on the Project, and shall not refer to the Project in any promotion or advertisement, in any news release or release to a trade publication or other media without McShane’s prior written consent.

§3.18.2 The term “Confidential Information” means any information (i) which would reasonably be expected to be harmful to Owner or McShane or the Project if disclosed to a competitor of the Project or of Owner or of McShane or (ii) which McShane has in writing requested Subcontractor to keep confidential. Notwithstanding the foregoing, Confidential Information shall not include information which is (x) generally known or available in the industry or (y) (i) known by Subcontractor other than by its status as Subcontractor, and (ii) not related in any way to Owner or its product or its technical information. Subcontractor shall not disclose Confidential Information to any person except to its employees and sub-subcontractors to the extent that they require it in the performance of their work, during the term of this Subcontract and until authorized by McShane in writing. Subcontractor and its sub-subcontractors shall hold all Confidential Information in trust and confidence for McShane and shall use Confidential Information only for the purpose of this Subcontract. Subcontractor and its sub-subcontractors shall require all their employees to whom Confidential Information is revealed to comply with these provisions. The Subcontractor shall have an agreement with each sub-subcontractor requiring its compliance with the foregoing. ARTICLE 4. SUB-SUBCONTRACTORS §4.1 AWARD OF SUB-SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK §4.1.1 The Subcontractor shall furnish to McShane in writing within thirty (30) calendar days of execution of the Subcontract the names, addresses and telephone numbers of all persons or entities who are to provide labor, material, supplies, equipment or any services on behalf of Subcontractor in connection with the Work. McShane will reply to the Subcontractor in writing if McShane, after due investigation, has reasonable objection to any such proposed person or entity. To the extent that Subcontractor adds, changes, or replaces the persons or entities who are to provide labor, material, supplies, equipment or any services in connection with the Work,



Subcontractor shall notify McShane in writing within seven (7) calendar days of the date on which the addition, change or replacement is made. McShane shall have the right at all times to contact Subcontractor’s subcontractors, suppliers and materialmen to ensure the same are being paid by Subcontractor, and to make payments to such subcontractors suppliers and materialmen directly or via joint check. .1 Any Sub-subcontractor providing any field labor will be required to comply with the same insurance

requirements that are required for the Subcontractor, and to provide the required certification of insurance, prior to commencing Work.

§4.1.2 The Subcontractor shall not contract with any such proposed person or entity to whom McShane has made reasonable objection under the provisions of Subparagraph 4.1.1. The Subcontractor shall not be required to contract with anyone to whom Subcontractor has reasonable objection. §4.2 SUBCONTRACTUAL RELATIONS §4.2.1 All portions of the Work performed for Subcontractor by a Sub-subcontractor shall be pursuant to an appropriate agreement between Subcontractor and the Sub-subcontractor, which shall contain provisions that: .1 Preserve and protect the rights of McShane under the Subcontract with respect to the Work to be

performed under the Subcontract so that the subcontracting thereof will not prejudice such rights; .2 Require that such Work be performed in accordance with the requirements of the Contract Documents; .3 Require that all Sub-subcontractor claims for additional costs, extensions of time, damages for delays or

otherwise with respect to subcontracted portions of the Work shall be submitted to the Subcontractor immediately after occurrence of the cause thereof; and in any event in sufficient time so that Subcontractor may comply in the manner provided herein for like claims against McShane, and McShane may comply in the manner provided in the Owner/McShane Agreement for like claims by McShane against Owner.

.4. Waive all rights the contracting parties may have against one another and McShane and Owner and any separate contractor for damages to property or business, except such rights as they may have to proceeds of any insurance required to be maintained by McShane or Subcontractor herein; and

.5. Obligate each Sub-subcontractor specifically to consent to the provisions of this Paragraph 4.2. .6. Sub-subcontractor shall be bound to the Subcontractor in the same manner as the Subcontractor is

bound to McShane. §4.3 PAYMENTS TO SUB-SUBCONTRACTORS §4.3.1 Subcontractor shall pay each Sub-subcontractor and any of Subcontractor’s material suppliers, either before or upon receipt of payment from McShane, an amount equal to the percentage of completion allowed to Subcontractor on account of such Sub-subcontractor’s Work, less the percentage retained from payments to Subcontractor or such higher amount as may be required in the applicable Sub-subcontract. Subcontractor shall also require any Sub-subcontractor to make similar payments to its subcontractors and material suppliers. Subcontractor and its Sub-subcontractors shall identify such payments as applicable to the portion of the Work performed by the applicable Sub-subcontractors and suppliers and require its application against amounts payable to the Sub-subcontractors and suppliers in respect to the Work. §4.3.2 Subcontractor shall pay each Sub-subcontractor an equitable share of any insurance monies received by Subcontractor, and shall require each Sub-subcontractor to make similar payments to its Subcontractors. §4.3.3 McShane may, on request, and at its discretion, furnish to any Sub-subcontractor information regarding percentages of completion approved on account of Work done by such Sub-subcontractor. §4.3.4 Neither Owner nor McShane shall have any obligation to pay or to see to the payment of any monies to any Sub-subcontractors except as may otherwise be required by law, and shall have no obligations to Sub-subcontractors whatsoever.



ARTICLE 5. SEPARATE SUBCONTRACTS §5.1 McSHANE’S RIGHT TO AWARD SEPARATE SUBCONTRACTS §5.1.1 McShane reserves the right to award other subcontracts in connection with other portions of the Project under these or other conditions of contract. §5.1.2 Subcontractor shall cooperate with McShane, other subcontractors and the Owner’s forces or separate contractors to the extent their work might interfere with Subcontractor’s Work and Subcontractor shall participate in the preparation of coordination schedules in areas of congestion if requested by McShane. Subcontractor shall also advise McShane of any potential conflicts between its Work and that of McShane, other subcontractors or Owner’s forces. In situations where a conflict arises between the Subcontractor’s Work and the work of others, McShane will determine which work has the highest priority. Such action by McShane shall not entitle the Subcontractor to an adjustment in the Subcontract Sum or time for performance. §5.2 MUTUAL RESPONSIBILITY OF SUBCONTRACTORS §5.2.1 Subcontractor shall afford McShane and other Subcontractors reasonable opportunity for the introduction and storage of their materials and equipment and the execution of their work and shall properly connect and coordinate Subcontractor’s Work with theirs. Subcontractor shall cooperate with McShane and separate contractors as their work may be completed expeditiously and within normal working hours. §5.2.2 If any part of the Subcontractor’s Work depends, for proper execution or results, upon the work of McShane or any separate contractor, the Subcontractor shall, prior to proceeding with the Work, inspect same and report in writing to McShane any apparent discrepancies or defects in such work that render it unsuitable for such proper execution and results. Failure of the Subcontractor so to report shall constitute an acceptance of the separate contractor’s or McShane’s work as fit and proper to receive Subcontractor’s Work and Subcontractor shall be liable for all consequences resulting from the existence of any apparent discrepancies or defects detrimental to the Work. §5.2.3 Any costs caused by defective or out-of-sequence Work shall be borne by Subcontractor. Failure to tender payment for such costs after demand shall constitute a default of this Subcontract. §5.2.4 Should the Subcontractor cause damage to the Work or property or to other work on the site, the Subcontractor shall promptly remedy such damage as provided in Paragraph 12.2. §5.2.5 Should the Subcontractor cause damage to the work or property of any separate contractor or other contractor, the Subcontractor shall, upon due notice, promptly attempt to settle with the other contractor by agreement, or otherwise resolve the dispute. If such separate contractor sues McShane or initiates an arbitration proceeding against McShane on account of any damage alleged to have been caused by the Subcontractor, McShane shall notify the Subcontractor who shall defend such proceedings at the Subcontractor’s expense with independent counsel acceptable to McShane, and if any judgment or award against McShane arises therefrom, the Subcontractor shall pay or satisfy it and shall reimburse McShane for all expenses incurred by McShane, including attorney’s fees, expert or consultant fees and court or arbitration costs. ARTICLE 6. MISCELLANEOUS PROVISIONS §6.1 GOVERNING LAW §6.1.1 The Subcontract shall be governed by the law of the place where the Project is located. §6.2 SUCCESSORS AND ASSIGNS §6.2.1 Subcontractor binds itself, its successors and assigns, and legal representatives to McShane in respect to all covenants, agreements and obligations contained in the Contract Documents. Subcontractor acknowledges and agrees that Owner and/or McShane may be required to assign certain rights under a separate agreement with a bank or other commercial lending institution (“Bank”) pursuant to the terms of applicable loan documents



required to procure financing on the Project, and, accordingly, Subcontractor agrees that, upon receipt of written notice from the Bank that an Event of Default has occurred under the terms of the loan documents between Owner and/or McShane and the Bank, Subcontractor will continue to perform under the terms of the Subcontract on behalf of the Bank so long as all payments and obligations of McShane hereunder are performed by the Bank in a timely manner. The same shall apply should McShane elect to assign the Subcontract to the Owner or a third party. Subcontractor shall not assign the Subcontract or sublet it in whole without the written consent of McShane, nor shall Subcontractor assign any monies due or to become due to Subcontractor hereunder, without the previous written consent of McShane. §6.3 WRITTEN NOTICE §6.3.1 Written notice required or permitted hereunder, or under any of the Contract Documents, may be delivered via: certified mail, return receipt requested; nationally-recognized overnight delivery service; personal delivery; facsimile transmission (fax); or electronic mail (e-mail). All such notices shall be sent to the mailing address, fax number, or e-mail address (as applicable) of the recipient party that is set forth in the Subcontract. Written notice delivered by certified mail shall be deemed effective upon the earlier of actual receipt or three (3) business days after posting. Written notice delivered by overnight delivery service shall be deemed effective upon the earlier of actual receipt or one (1) business day after deposit with such service. Written notice delivered by personal delivery, fax, or e-mail shall be deemed effective on the date sent. No refusal of delivery shall operate to invalidate the effectiveness of such written notice; provided that if a sending party has actual knowledge of the failure of delivery by fax or e-mail to occur, such sending party shall promptly attempt delivery by other means. §6.4 CLAIMS FOR DAMAGES §6.4.1 Subcontractor hereby waives any claims against McShane or Owner for incidental, consequential, special, or punitive damages arising out of or related to the Subcontract or Contract Documents. Subcontractor waives all claims for unjust enrichment arising out of Subcontractor’s Work. Should Subcontractor suffer loss, injury or damage to business, person, or property because of any act or omission of McShane or its employees, agents or others for whose acts McShane is legally liable, written notice thereof shall be given promptly so as to avoid prejudice to McShane (and in any event within seven (7) calendar days after Subcontractor’s first observance of such loss, injury or damage), or claims arising therefrom shall be deemed waived. .1 Failure to give such notice will constitute a waiver of the claim. .2 Any claim that will affect or become part of a claim that McShane is required to make under its contract

with the Owner shall be made in writing by Subcontractor within the time set forth in this subparagraph 6.4.1 and in such manner so as to permit McShane to satisfy the requirements of its contract with the Owner. If Subcontractor fails to timely or properly submit a claim to McShane, and as a consequence McShane is unable to timely or properly file a claim against the Owner under its contract with the Owner, Subcontractor shall be deemed to have waived any such claim against McShane.

.3 Subcontractor shall not rely on any purported verbal waiver of this or any other written notice provision of the Subcontract.

§6.4.2 Except as otherwise provided in this Subcontract, all disputes arising out of this Subcontract shall be initially decided by McShane, and McShane shall, upon request, reduce its decision to writing and furnish a copy thereof to Subcontractor. McShane’s decision shall be final and conclusive unless Subcontractor, within seven (7) days of its receipt of the initial decision, issues written notice to McShane contesting same. If Subcontractor does not contest McShane’s initial decision within the time period noted above, McShane’s decision shall be final and conclusive, and Subcontractor shall be deemed to have waived any right to contest McShane’s decision. §6.5 PERFORMANCE BOND AND LABOR AND MATERIAL PAYMENT BOND §6.5.1 McShane shall have the right to require Subcontractor to furnish bonds covering the faithful performance of the Subcontract and the payment of all obligations arising thereunder and the cost thereof shall be an extra to the Subcontract unless the bond is required to be provided at Subcontractor’s expense in the Subcontract. .1 If required, Subcontractor shall obtain and furnish to McShane a Performance Bond and Labor and



Material Payment Bond each in an amount at least equal to the Subcontract Sum as security for Subcontractor’s performance and payment of its obligations under the Subcontract. All Bonds shall be executed by sureties that are licensed to do business in the state in which the Project is located and are named in the current list of Circular 570, “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies” as published by the U.S. Treasury Department. Surety shall have a policyholder’s rating of “A” and a minimum class of “8”. The Bonds shall be in the form of Exhibits A and B attached hereto. The Bonds shall name McShane Construction Company LLC as obligee and if signed by an agent must be accompanied by a certified copy of the agent’s authority to act. Unless the Subcontract requires it, nothing herein shall give McShane the right to designate that the Bond be executed by a specific surety or procured from a specific agent.

§6.6 RIGHTS AND REMEDIES §6.6.1 Except as otherwise provided, the duties and obligations imposed by the Contract Documents and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available at law or in equity. §6.6.2 No action or failure to act by McShane shall constitute a waiver of any right or duty afforded under the Contract Documents, nor shall any such action or failure to act constitute an approval of or acquiescence of any breach thereunder, except as may be specifically agreed hereto or in writing. §6.7 ROYALTIES AND PATENTS §6.7.1 Subcontractor shall pay all royalties and license fees in respect to the Work or materials incorporated therein. Subcontractor shall defend all suits or claims for infringement of any patent rights or other proprietary right of any third party and shall save Owner and McShane harmless from loss on account thereof. If Subcontractor has any reason to believe that the design, process or product specified in the Contract Documents would infringe a patent or other proprietary right of any third party, Subcontractor shall immediately notify McShane. §6.8 TESTS §6.8.1 If the Contract Documents, laws, ordinances, rules, regulations or orders of any public authority having jurisdiction require any portions of the Work to be inspected, tested or approved, the Subcontractor shall give McShane timely and reasonable advance notice of its readiness so McShane may observe such inspection, testing or approval. If McShane’s or Owner’s quality assurance testing is to be performed on the Work, Subcontractor shall give McShane reasonable advance notice so that such testing can be done in proper sequence. The Subcontractor shall bear all costs of such inspections, tests or approvals unless otherwise provided. §6.8.2 If McShane determines that any Work requires special inspection, testing or approval which Subparagraph 6.8.1 does not include, McShane will order such special inspection, testing or approval, and Subcontractor shall give notice as in Subparagraph 6.8.1. If such special inspection or testing reveals a failure of the Work to comply (1) with the requirements of the Contract Documents or (2) with respect to the performance of the Work, with laws, ordinances, rules, regulations or orders of any public authority having jurisdiction, Subcontractor shall bear all costs thereof, including McShane’s additional services made necessary by such failure; otherwise, McShane shall bear such costs. §6.8.3 Should McShane develop and distribute a written Quality Assurance Program, outlining specific submittal and performance requirements on the part of the Subcontractor, it shall be the responsibility of the Subcontractor to make sure that field personnel involved in the Project are both aware of the requirements and cooperative with inspections by McShane, the architect, or any other testing agency. §6.8.4 Certificates of inspection, testing or approval required by McShane (pursuant to Subparagraph §6.8.2



above), by Contract Documents, or by authorities having jurisdiction shall be secured by Subcontractor and promptly delivered by Subcontractor to McShane. §6.8.5 Neither the observations or tests of McShane or any of its agents or employees, nor inspections, tests or approvals of other persons shall constitute acceptance or relieve Subcontractor from its obligations to perform the Work in accordance with the Contract Documents. §6.9 DISPUTE RESOLUTION §6.9.1 All claims, disputes and other matters in question arising out of or relating to the Subcontract, or the breach thereof, shall be decided by litigation or arbitration, at the election of McShane and in the manner selected by McShane. The award rendered by any arbitrators in such event shall be final, and judgment may be entered upon it in accordance with the applicable law in any court having jurisdiction thereof. §6.9.2 Subcontractor shall carry on the Work and maintain the progress schedule during any dispute, arbitration or litigation proceedings, unless otherwise directed by McShane in writing. This continuation of work clause shall remain paramount, and Subcontractor agrees that it will not raise any alleged breach, material or otherwise, by McShane as a justification for stopping its Work.

§6.9.3 If McShane so requires, prior to any arbitration or litigation, the parties shall participate in good faith in a non-binding mediation conducted in accordance with the Construction Industry Mediation Rules of the American Arbitration Association, provided that doing so will not result in the loss or lapse of any rights due to the operation of statutory or other limitations on the time in which to bring action, and in such event McShane and Subcontractor agree to participate in good faith and with due diligence for the resolution of the claim, dispute or other matter in question. §6.9.4 In the event McShane is involved in a separate arbitration or other legal proceeding involving Subcontractor’s Work, questions of law or fact common to Subcontractor’s Work, or if complete relief cannot be afforded without Subcontractor’s presence in the separate arbitration or other legal proceeding, Subcontractor hereby consents to its consolidation or joinder to that separate proceeding. §6.10 INDEMNITY §6.10.1 The work performed by the Subcontractor shall be at the risk of the Subcontractor exclusively. To the fullest extent permitted by law, Subcontractor shall indemnify, defend (at Subcontractor’s sole expense) and hold harmless McShane and Owner and their representatives, agents, sureties and employees from and against any and all demands, claims, suits, causes of action, losses, whether groundless or not, penalties, liabilities, judgments, settlements, damages, costs, attorneys’ fees, and expenses of any nature, including without limitation attorneys’ fees and court costs, arising or alleged to have arisen directly or indirectly in whole or in part from: (a) any act or omission of Subcontractor, its representatives, employees, agents, subcontractors,

suppliers or materialmen at any tier; (b) any breach of the Subcontract by Subcontractor; (c) Subcontractor’s subcontractors, suppliers, materialmen, representatives, agents or employees, at any

tier, or any lien filed by any of them (including any cost to McShane to bond over any such lien); (d) infringement of any patent, copyright, trademark, trade name, brand or slogan; or (e) Subcontractor’s performance or lack of performance of the Work; whether or not occurring or arising

out of or claimed to have occurred or arisen out of the concurrent acts or omissions of Owner or McShane, their representatives, agents, sureties or employees in connection with the Work, except that Subcontractor shall have no duty to indemnify, defend or hold harmless Owner or McShane, their representatives, agents, sureties or employees against any of the above which shall arise solely out of their acts or omissions, or as otherwise provided by law.

§6.10.2 Subcontractor’s indemnity obligations under the Subcontract shall not be construed to negate, or abridge



or otherwise reduce any other right or obligation of indemnity which would otherwise exist. Subcontractor’s indemnity obligations under the Subcontract shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for Subcontractor under any Workers’ compensation acts, disability benefits acts or other employee benefit acts. Subcontractor’s indemnification and defense obligations hereunder shall extend to claims occurring after this Subcontract is terminated as well as while it is in force, and shall continue until it is finally adjudicated that any and all actions against the indemnified parties for such matters which were indemnified hereunder are fully and finally barred by applicable laws. §ARTICLE 7. TIME §7.1 DEFINITIONS §7.1.1 The Contract Time is the period of time allotted in the Contract Documents for the Substantial Completion of the Work as defined in Subparagraph 7.1.3, including authorized adjustments thereto. §7.1.2 The date of commencement of the Work is the date established in a notice to proceed. If there is no notice to proceed, it shall be the date of the Subcontract or such other date as may be established therein. §7.1.3 The date of Substantial Completion of the Work or designated portion thereof is the date when construction is sufficiently complete, in accordance with the Contract Documents so the Work or designated portion thereof can be utilized for the use for which it is intended and so that the Work can be utilized to substantially the same effect as if fully complete or as otherwise defined in the Contract Documents. Said date and level of completion required for utilization shall be established by McShane in its sole but reasonable determination. §7.1.4 The term “day” as used in the Contract Documents shall mean business day unless otherwise specifically designated. §7.2 PROGRESS AND COMPLETION §7.2.1 All time limits stated in the Contract Documents are of the essence of the Subcontract. §7.2.2 Subcontractor shall begin the Work on the date of commencement as specified in Subparagraph 7.1.2, shall at all times supply and promptly pay for adequate tools, appliances, equipment, a sufficient number of properly skilled workmen, and a sufficient amount of materials and supplies of specified quality to efficiently and properly prosecute the Work in accordance with the Schedule, and any modifications thereto issued by McShane, in order to achieve the Project completion date established by McShane. Subcontractor shall at all times give due consideration to the fact that other work is dependent upon Subcontractor’s proper and timely completion of its Work. §7.3 DELAYS AND EXTENSIONS OF TIME §7.3.1 Should Subcontractor fail to timely or adequately man the job as required to complete the Project and the Work as scheduled, McShane shall have the right to order the Subcontractor to work overtime as required to complete the Work at no increase in the Subcontract Sum. Subcontractor’s failure to adequately or timely man the job shall not constitute a basis for extra payment for any overtime. Subcontractor shall be liable to McShane for damages caused by Subcontractor’s failure to comply with the progress and completion provisions of this Subcontract. If the Subcontractor is delayed at any time in the progress of the Work by any improper act or neglect of McShane or by any separate contractor or by any employees of either, or by changes ordered in the Work by any other cause beyond the Subcontractor’s control such as by labor disputes (not the fault of Subcontractor), fire, unusual delay in transportation, adverse weather conditions not reasonably anticipatable, unavoidable casualties, or by any other cause which McShane determines may justify the delay, then the Contract Time shall be extended by Change Order for such reasonable time as McShane may determine. No circumstance shall be deemed beyond Subcontractor’s control if such circumstance could have been avoided by efficient project administration.



§7.3.2 Any claim for extension of time shall be made in writing to McShane no more than seven (7) calendar days after the date Subcontractor has reason to know that a delay is likely; otherwise it shall be waived. In the case of a continuing cause of delay, only one claim is necessary. The Subcontractor shall provide an estimate of the probable effect of such delay on the progress of the Work. §7.3.3 If no schedule or agreement is made stating the dates upon which written interpretations as set forth in Subparagraph 1.2.3 shall be furnished, then no claim for delay shall be allowed on account of failure to furnish such interpretations until fifteen (15) business days after demand is made for them, and not then unless such claim is reasonable. §7.3.4 Subcontractor agrees that it anticipates that as the job progresses, McShane will be making changes in and updating the construction schedule. Therefore, no claim for acceleration, hindrance, disruption or delay will be allowed for changes in construction schedules of the type ordinarily experienced in projects of similar size and complexity. §7.3.5 No claim for damages or any claim other than for extension of time as herein provided shall be made or asserted against McShane or Owner by reason of any delays caused by excused delays. Extension of time of completion, if any, shall be Subcontractor’s sole remedy for any excused delay. §7.3.6 Upon request of McShane, or as otherwise required, Subcontractor shall immediately prepare and submit for McShane’s approval an estimated progress schedule for the Work. The progress schedule shall be related to the entire Project to the extent required by the Contract Documents. This schedule shall indicate the dates for the starting and completion of the various stages of the Work and shall be revised from time to time as necessary to conform to the Contract Documents and McShane’s Construction Schedule. Anything hereunder to the contrary notwithstanding, Subcontractor shall be responsible for causing its progress to conform to the requirements of the Contract Documents as they relate to commencement, progress and completion of the Work; provided, however, in the event McShane alters the requirements related to commencement, and the progress of and completion of Subcontractor’s Work, Subcontractor shall conform to such requirements. When required by McShane, Subcontractor shall furnish evidence satisfactory to McShane that subcontractor can and will comply with McShane’s Construction Schedule, and McShane shall have the right to inspect Subcontractor’s business and records to verify such compliance. At McShane’s request, Subcontractor shall file periodically with McShane a list of all critical items of materials and equipment, fabrication dates, delivery dates promised by suppliers and other information reasonably requested by McShane. Subcontractor shall attend job meetings as required by McShane. §7.3.7 Subcontractor agrees to proceed with the Work in any orderly and reasonable sequence directed by McShane and to abide by McShane’s decision as to the allotment of all storage and working space on the Project. §7.3.8 McShane agrees to provide Subcontractor, upon written request, with a copy of the construction contract (“Prime Contract”) that McShane has entered into with Owner. The terms of such Prime Contract are hereby incorporated into and made a part of this Subcontract. Where a provision of the Prime Contract is in conflict with a provision of this Subcontract, this Subcontract shall govern. To the extent the terms of the Prime Contract are applicable to Subcontractor’s Work, Subcontractor assumes towards McShane all of the responsibilities, obligations and duties owed by McShane to Owner under the Prime Contract. McShane shall have the benefit of all rights and remedies against the Subcontractor that the Owner, under the Prime Contract, has against McShane. Subcontractor agrees to similarly bind its sub-subcontractors to the terms of this Subcontract. If the Prime Contract contains a provision which renders McShane liable to the Owner for Liquidated Damages in the event of non-excusable delays in the performance of the work under that contract, McShane shall be entitled to recover from Subcontractor its proportionate share of any such Liquidated Damages to the extent those damages are incurred due to Subcontractor’s failure to timely or properly perform its Work. The Liquidated Damages recoverable hereunder are intended to compensate McShane for Liquidated Damages it may owe the Owner



under the Prime Contract to the extent those damages are incurred due to delays in the performance of the work caused by the acts or omissions of Subcontractor, its employees, agents or sub-subcontractors, McShane may have other and additional damages as a result of the failure of the Subcontractor to properly perform hereunder, which shall be recoverable from Subcontractor in addition to the Liquidated Damages referenced herein. Subcontractor acknowledges and agrees that it has reviewed any Liquidated Damage provisions contained in the Prime Contract, and that the Liquidated Damages recoverable under this Subparagraph are neither a penalty nor a forfeiture, and are hereby fixed and agreed upon as the amount of damages that may be sustained by McShane in the event the Subcontractor is responsible for a delay in obtaining completion of the Project by the required date. Subcontractor acknowledges that the actual damages sustained by the Owner, and thus by McShane, as a result of any such delays may be difficult to calculate. McShane may deduct the amount of Liquidated Damages due and owing by Subcontractor from any amounts due or to become due to Subcontractor under this Subcontract, or if such funds are insufficient, may recover the balance from Subcontractor as damages for breach of this Subcontract. ARTICLE 8. PAYMENTS AND COMPLETION §8.1 SUBCONTRACT SUM §8.1.1 The Subcontract Sum is stated in the Subcontract between McShane and the Subcontractor including adjustments thereto and is the total amount payable to the Subcontractor for the performance of the Work under the Contract Documents. §8.2 SCHEDULE OF VALUES §8.2.1 Before Subcontractor’s first Application for Payment, Subcontractor shall submit to McShane a schedule of values of the various portions of the Work, including quantities, if required by McShane, aggregating the total Subcontract Sum divided so as to facilitate payments to Subcontractor in accordance with Paragraph 4.3 prepared in the form of AIA Documents G702 and G703, Application and Certification for Payment, attached hereto as Exhibits C and D. These forms shall be supported by such additional data to substantiate their correctness as McShane may require. Each item in the schedule of values shall include its proper share of taxes, overhead and profit. This schedule, when approved by McShane, shall be used only as a basis for Subcontractor’s applications for payment. §8.3 PROGRESS PAYMENTS §8.3.1 Subcontractor shall submit Applications for Payments and be paid by McShane in accordance with the Subcontract. It is expressly understood and agreed by the Subcontractor that its receipt of payment from McShane is expressly conditioned upon McShane’s receipt of payment from the Owner, and that receipt of payment by McShane from the Owner is an absolute condition precedent to Subcontractor’s right to receive any payment from McShane for all or any portion of the Work to be performed by Subcontractor under this Agreement. If the project is located in a state in which a prompt payment act exists, either now or in the future, the terms of this Article 8.3 shall govern. Subcontractor waives any rights it may have under such prompt payment act, or any right to be paid by McShane prior to McShane’s receipt of payment from the Owner, to the extent such waiver is legally enforceable. §8.3.2 McShane shall not be required to pay for material or equipment delivered to the site or to a suitable location away from the site which has not been incorporated in the Project without McShane’s prior written consent which may be withheld in McShane’s sole discretion. If payments are to be made on account of materials or equipment not incorporated in the Work but delivered and suitably stored at the site or suitably stored at a location approved by McShane away from the site, such payment shall be conditioned upon submission by Subcontractor of bills of sale or such other procedure satisfactory to McShane to establish McShane’s or Owner’s title to such materials or equipment or otherwise protect Owner’s and McShane’s interests, including provisions for applicable insurance. §8.3.3 Subcontractor warrants and guarantees that title to all Work, materials and equipment covered by an



Application for Payment, whether incorporated in the Project or not, will pass to McShane and Owner upon the receipt of such payment by Subcontractor, free and clear of all liens, claims, security interests or encumbrances, hereinafter referred to in this Article 8 as “liens”; and that no Work, materials or equipment covered by an Application for Payment will have been acquired by Subcontractor, or by any other persons performing the Work at the site or furnishing materials and equipment for the Project, subject to an agreement under which an interest therein or an encumbrance thereon is retained by the seller or otherwise imposed by Subcontractor or such other person. §8.3.4 Subcontractor agrees to pay for all expenses, including, but not limited to, all labor, insurance, bonds, materials, equipment, tools, skills, services, work and resources necessary or incidental to the full performance of the Work under the Subcontract, when and as bills or claims therefore become due. Subcontractor shall not use any payment to satisfy or secure any indebtedness other than one Subcontractor owes to a person furnishing labor or materials for use in performing services for, or the incorporation of materials into, the Project. Subcontractor agrees that all funds it receives are to be held in trust, and Subcontractor further agrees to be bound as a fiduciary to McShane and to Subcontractor’s subcontractors and suppliers to apply such funds to payment of labor, services and materials for the Project. §8.3.5 If McShane receives information, or has reason to believe, that Subcontractor has not paid for any work, equipment, or materials incorporated into the Project, then McShane reserves the right to make payments to Subcontractor in the form of checks payable jointly to Subcontractor and its workers, suppliers, or sub-subcontractors. By endorsing any such joint check, each worker, supplier, or sub-subcontractor endorser acknowledges that it has been paid the full face amount of the check for work performed on the Project covered by this Subcontract. §8.3.6 If Subcontractor is indebted to McShane on any other job or for any reason, McShane may offset such indebtedness against any payments earned under this Subcontract. §8.4 APPROVAL OF PAYMENT §8.4.1 By approving or making any payment to Subcontractor, McShane shall not thereby be deemed to represent that McShane has made inspection to check the quality or quantity of the Work, or that McShane has reviewed the construction means, methods, techniques, sequences or procedures, or that McShane has made any examination to ascertain how or for what purpose Subcontractor has used the monies previously paid on account of the Contract Sum. §8.4.2 No certificate for a progress payment, nor any progress payments nor any partial or entire use or occupancy of the Project by Owner or McShane shall constitute conclusive evidence of the performance of this Agreement either in whole or in part or an acceptance of the Work not in accordance with the Contract Documents. §8.4.3 No payment shall be required until Subcontractor has supplied lien waivers and an indemnity against liens in respect to all Work for which payment is requested by Subcontractor and its Sub-subcontractors in form and substance acceptable to McShane. Along with each Application for Payment, Subcontractor shall submit to McShane its sworn waiver and release of lien and sworn waivers and releases of lien from its subcontractors, suppliers, and materialmen. In addition and in order to update the information required in Subparagraph 4.1.1, Subcontractor will submit to McShane, along with each Application for Payment, a current list of all subcontractors, suppliers and materialmen who are providing labor, material, supplies, equipment or any services on behalf of Subcontractor in connection with Work in the form of its sworn statement pursuant to Subparagraph 8.2.1. .1 In addition, no payment shall be required until Subcontractor has satisfied and removed of record all

recorded liens, for which prior payments have been made or for which payment is currently being applied for.



§8.5 PAYMENTS WITHHELD §8.5.1 McShane may decline to approve any Application for Payment by Subcontractor to the extent reasonably necessary to protect Owner and McShane, if McShane has reason to believe that any noncompliance by Subcontractor with the Contract Documents exists. McShane may nullify the whole or any part of any previous payment issued, to such extent as may be necessary in McShane’s opinion to protect McShane from loss due to: .1 Defective Work not remedied; .2 Third party claims filed or reasonable evidence indicating probable filing of such claims; .3 Failure of Subcontractor to comply with the provisions of the Contract Documents or to make payments

properly to Sub-subcontractors, or for labor, materials, skill or equipment; .4 Reasonable doubt that the Work can be completed for the unpaid balance of the Subcontract Sum; .5 Damage to McShane or others to whom McShane may be liable or to their property or business; .6 Reasonable indication that the Work will not be completed within the Contract Time; .7 Unsatisfactory prosecution of the Work by Subcontractor; .8 Damage or loss caused by Subcontractor or default by Subcontractor under contracts with McShane on

other projects; or .9 All charges for materials and services furnished by McShane to Subcontractor pursuant to this

Subcontract; or .10 Failure of Subcontractor to comply with the provisions of Subparagraphs 4.1.1 and/or 8.4.3. §8.5.2 When the grounds in Subparagraph 8.5.1 are removed, payment shall be made for amounts withheld because of them. §8.6 SUBSTANTIAL COMPLETION, LIEN WAIVERS AND FINAL PAYMENT §8.6.1 When McShane determines that the Work or a designated portion thereof acceptable to McShane is substantially complete, McShane shall prepare a list of items to be completed or corrected before Substantial Completion and/or Final Completion shall be deemed to have occurred. The failure to include any items on such list does not alter the responsibility of Subcontractor to complete all Work in accordance with the Contract Documents. Subcontractor, upon completion of such items, shall submit a final Application for Payment upon Substantial Completion in accordance with the payment provisions of the Contract Documents and final payment shall thereafter be made, also in accordance with the provisions of the Contract Documents. §8.6.2 Final payment, including retention, shall be made to Subcontractor upon: (1) completion of Subcontractor’s Work in accordance with the Contract Documents; (2) acceptance of Subcontractor’s Work by McShane and the Owner; (3) the occurrence of any and all conditions precedent to Subcontractor’s entitlement to Final Payment, as provided in the Prime Contract or elsewhere in the Contract Documents; (4); submission of an affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which Owner or McShane or the property of Owner might in any way be charged or responsible, have been paid or otherwise satisfied, (5) submission of consent of surety, if any, to final payment, (6) submission of as-built drawings, (7) submission of all required warranty/guarantee letters, (8) completion of items per Subparagraph 8.6.1, (9) submission of all required operation/maintenance manuals, (10) submission of all required attic stock (11) submission of an executed Final Waiver and Release Upon Payment and, if required by Owner or McShane, other data establishing payment or satisfaction of all obligations for labor, materials, skill, equipment and other matters incorporated in the Work, such as receipts, releases and waivers of lien arising out of the Subcontract, to the extent and in such form as may be designated by McShane; and (12) receipt by McShane of funds from the Owner so as to permit McShane to make the Final Payment to Subcontractor. The Subcontractor acknowledges and agrees that McShane’s receipt of payment from the Owner is an express condition precedent to McShane’s obligation to make Final Payment to the Subcontractor under this Agreement. If Owner consents and if any of Subcontractor’s Sub-subcontractors refuse to furnish a release or waiver required by McShane, Subcontractor may furnish other security satisfactory to Owner, McShane and to Owner’s lender to indemnify Owner and McShane against any such lien or claim. If any such lien remains unsatisfied after all payments are made,



Subcontractor shall refund to McShane all monies that the latter may be compelled to pay in discharging such lien, including all costs and reasonable attorney’s fees. §8.6.3 The acceptance of final payment of Subcontractor shall constitute a waiver of all claims by Subcontractor arising out of or relating to this Subcontract, except those previously made in writing and still unsettled.

ARTICLE 9. PROTECTION OF PERSONS AND PROPERTY §9.1 SAFETY PRECAUTIONS AND PROGRAMS §9.1.1 Subcontractor shall implement a Hazard Communications Program and shall take all safety precautions with respect to its Work, shall assume all responsibility for compliance with all safety measures initiated by McShane, required by the Contract Documents and with all applicable laws, ordinances, rules, regulations and lawful orders of any public authority for the safety of persons or property, including the Occupational Safety and Health Act, and all laws, rules and regulations amendatory and supplementary thereto, and any other similar legislation enacted before or during the performance of the Subcontract. Subcontractor is fully responsible for the safety and health of all persons engaged by it or its sub-subcontractors in the Work, and in no event shall McShane or Owner be deemed to be an employer of any of said persons. §9.1.2 If the Subcontractor fails to maintain the safety precautions required by law or directed by McShane, McShane may take such steps as necessary and charge the Subcontractor therefor. §9.1.3 The failure of McShane to take any such action shall not relieve the Subcontractor of its obligations in Subparagraph 9.1.1. §9.2 SAFETY OF PERSONS AND PROPERTY §9.2.1 The Subcontractor shall take all reasonable precautions for the safety of, and shall provide all reasonable protection to prevent damage, vandalism, theft, injury or loss to: .1 All employees on the Work and all other persons who may be affected thereby; .2 All the Work and all materials and equipment to be incorporated therein, whether in storage on or off the

site, under the care, custody or control of Subcontractor or any of its Sub-subcontractors; and .3 Other property at the site or adjacent thereto, including but not limited to trees, shrubs, lawns, walks,

pavements, roadways, structures and utilities not designated for removal, location, or replacement in the course of construction.

§9.2.2 Subcontractor shall erect and maintain, as required by existing conditions and progress of the Work, all reasonable safeguards for safety and protection, including instituting a Hazard Communication Program, posting danger signs and other warnings and warning lights against hazards, promulgating safety regulations and notifying any parties which might be affected by the Work. §9.2.3 When the use or storage of explosives or other hazardous materials or equipment is necessary for execution of the Work, Subcontractor shall exercise the utmost care and shall carry on such activities under the supervision of properly qualified personnel and then only after written approval of McShane. §9.2.4 All damage or loss to any property referred to above caused in whole or in part by Subcontractor or any of its Sub-subcontractors or anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable, shall be remedied by Subcontractor at Subcontractor’s sole expense. Subcontractor shall replace all glass broken by Subcontractor or any Sub-subcontractor (except to the extent McShane’s insurance will cover the cost of same). §9.2.5 Subcontractor shall designate a responsible member of Subcontractor’s organization at the site whose duties shall be the prevention of accidents. This person shall be Subcontractor’s Superintendent unless otherwise designated in writing by Subcontractor to McShane.



§9.2.6 Subcontractor shall not load or permit any part of the Work or the Project to be loaded so as to endanger its safety. .1 Truck drivers employed for delivery only shall not be permitted to assist with or engage directly in

unloading or loading of materials, unless specific provisions and insurance allow this. §9.2.7 Subcontractor shall place all required and/or necessary or appropriate warning signs, labels, or decals informing potential users of equipment, materials or systems supplied by Subcontractor of any unsafe or dangerous conditions related to the use thereof. §9.3 EMERGENCIES §9.3.1 In any emergency affecting the safety of persons or property, Subcontractor shall act at its discretion to prevent threatened damage, injury or loss. Unless such emergency was caused by Subcontractor, any additional compensation or extension of time claimed by Subcontractor on account of emergency Work shall be determined as provided in Article 11. ARTICLE 10. INSURANCE All insurance requirements for the project are described in the Subcontract. ARTICLE 11. CHANGES IN THE WORK §11. 1 CHANGE ORDERS §11.1.1 McShane, without invalidating this Subcontract, may order changes in the Work within the general scope of this Subcontract, consisting of additions, deletions or other revisions, with the Subcontract Sum and Subcontract Time being adjusted accordingly. All such changes in the Work shall be authorized by a Change Order and shall be executed under the applicable conditions of the Contract Documents. .1 All Subcontractor requests for field-authorized extra Work orders must have prior written approval and

must be presented in writing to McShane’s Superintendent at least twenty-four (24) hours prior to commencement of the Work. These requests, together with cost breakdown and documentation of means by which cost was determined, must be submitted in writing to McShane’s Project Manager within three (3) business days after the occurrence of the event giving rise to such claim. Requests for extras not received within these time limits will not be accepted and claims in respect there to shall be deemed waived. Failure to timely submit a request for extras arising out of change or revised Work shall constitute a representation by Subcontractor that no additional time or compensation for the change or revision is being sought and shall constitute a waiver and release of any such request.

§11.1.2 A Change Order is a written order to Subcontractor signed by McShane issued after the execution of the Subcontract authorizing a change in the Work or an adjustment in the Subcontract Sum or Subcontract Time. A Change Order shall be signed by McShane and Subcontractor. The Subcontract Sum and Subcontract Time may be changed only by a Change Order. Subcontractor hereby waives any claims arising out of so-called “constructive change orders” or change orders which do not strictly comply with the terms and requirements of these General Conditions of Subcontract or of the other Contract Documents. §11.1.3 The cost or credit to McShane resulting from a change in the Work shall be determined in one or more of the following ways: .1 By mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to

permit evaluation; .2 By unit prices stated in the Contract Documents or subsequently agreed upon; .3 By cost to be determined in a manner agreed upon by the parties and a mutually acceptable fixed or

percentage fee; or .4 By the method provided in Subparagraph 11.1.4.



§11.1.4 If none of the methods set forth above is agreed upon, the Subcontractor, provided it receives a written order signed by McShane, shall promptly proceed with the Work involved. The cost of such Work shall be determined by McShane on the basis of the reasonable expenditures and savings of those performing the Work attributable to the change, including, in the case of an increase in the Subcontract Sum, a reasonable allowance for overhead and profit. In such case the Subcontractor shall keep and present, in such form as McShane may prescribe, an itemized accounting together with appropriate supporting data for inclusion in a Change Order. Unless otherwise provided in the Contract Documents, cost shall be limited to the following: cost of materials, including sales tax and cost of delivery; cost of labor, including social security, old age and unemployment insurance, and fringe benefits required by agreement or custom; worker’s or workmen’s compensation insurance; bond premiums; rental value of equipment and machinery; and the additional costs of supervision and field office personnel directly attributable to the change. Pending final determination of cost, payments on account shall be made as reasonably determined by McShane. The amount of credit to be allowed by the Subcontractor for any deletion or change which results in a net decrease in the Subcontract Sum will be the amount of the actual net decrease in cost as confirmed by McShane. When both additions and credits covering related Work or substitutions are involved in any one change, the allowance for overhead and profit shall be figured on the basis of the net increase or decrease, if any, with respect to that change. §11.1.5 If unit prices are stated in the Contract Documents or subsequently agreed upon, and if the quantities originally contemplated are so materially and substantially changed in a proposed Change Order that application of the agreed unit prices to the quantities of Work proposed will cause substantial inequity to McShane or Subcontractor, the applicable unit prices shall be equitably adjusted to prevent such hardship. §11.2 CLAIMS FOR ADDITIONAL COST §11.2.1 If Subcontractor wishes to make a claim for an increase in the Subcontract Sum, Subcontractor shall give McShane written notice thereof within three (3) business days after the occurrence of the event giving rise to such claim. This notice shall be given by Subcontractor before proceeding to execute the Work, except in an emergency endangering life or property, in which case Subcontractor shall proceed in accordance with Subparagraph 9.3.1. No such claim shall be valid unless so made. Any change in the Contract Sum resulting from such claim shall be authorized by a Change Order. §11.3 MINOR CHANGES IN THE WORK §11.3.1 McShane will have authority to order minor changes in the Work not involving an adjustment in the Subcontract Sum or an extension of the Subcontract Time and not inconsistent with the intent of the Contract Documents. Such changes shall be effected by written order and such changes shall be binding on McShane and the Subcontractor. The Subcontractor shall carry out such written orders promptly.

ARTICLE 12. UNCOVERING AND CORRECTION OF WORK §12.1 UNCOVERING OF WORK §12.1.1 If any of the Work should be covered contrary to the request of McShane, it must, if required by McShane, be uncovered for McShane’s observation and replaced at Subcontractor’s expense. §12.1.2 If any Work has been covered which McShane has not specifically requested to observe prior to being covered, McShane may request to see such Work and it shall be uncovered by McShane or Subcontractor, at McShane’s option. If such Work be found in accordance with the Contract Documents, the cost of uncovering and replacement shall be charged to McShane. If such Work be found not in accordance with the Contract Documents, Subcontractor shall pay such costs, unless it be found that the condition was caused by a party other than Subcontractor. §12.2 CORRECTION OF WORK



§12.2.1 If during the period of construction the Work is found to be defective or not in accordance with the Contract Documents, Subcontractor shall correct it within five (5) business days after receipt of written notice from McShane to do so unless McShane has previously given Subcontractor written approval for longer duration or acceptance of such condition specifically acknowledging that it is accepted irrespective of the fact that it is defective or not in accord with the Contract Documents. McShane shall give such notice promptly after discovery of the conditions. All such defective or nonconforming Work shall be corrected or removed from the site, if necessary, and the Work shall be corrected to comply with the Contract Documents without cost to McShane or Owner. Subcontractor shall bear the cost of making good all Work of McShane or of separate contractors destroyed or damaged by such removal or correction. If Subcontractor does not remove such defective or nonconforming Work within a reasonable time, McShane may remove it and store the materials or equipment at the expense of Subcontractor. If Subcontractor does not pay the cost of such removal and storage within ten (10) business days thereafter, McShane may, upon ten (10) additional business days’ written notice, sell such Work at auction or at private sale, and shall account for the net proceeds thereof, after deducting all costs that should have been borne by Subcontractor. If such proceeds of sale do not cover all costs which Subcontractor should have borne, the difference shall be charged to Subcontractor and an appropriate Change Order shall be issued. If the payments then or thereafter due Subcontractor are not sufficient to cover such amount, Subcontractor shall pay the difference to McShane. §12.2.2 If Subcontractor fails to correct such defective or nonconforming Work in accordance with the above provisions, McShane may correct it, and the costs thereof credited against the Subcontract Sum or McShane shall be reimbursed by Subcontractor for such costs. §12.2.3 If McShane elects to accept defective or nonconforming Work, it may do so instead of requiring its removal and/or correction, in which case a Change Order will be issued to reflect an equitable reduction in the Subcontract Sum; or, if the amount is determined after final payment, it shall be paid by Subcontractor. §12.2.4 Subcontractor guarantees the Work to be free from all defects in materials and workmanship for a period of one (1) year after the date of Substantial Completion of the Project, or for such longer period of time as may be prescribed by the terms of any applicable special guarantee required by the Contract Documents. Subcontractor shall promptly correct, repair, or replace any portion of the Work that is the subject of a warranty claim. McShane shall have the right to use the building systems and equipment prior to substantial completion for construction purposes without affecting any warranty herein benefiting Owner and/or McShane. Should there by any special requirements or costs necessitated by this provision, these requirements and/or costs shall be included in Subcontractor’s bid or specifically identified on the bid. Any guarantee Work shall be done in accordance with the requirements above as to correction, repair or replacement of Work during the construction period. In the event Subcontractor has a duty to correct or replace the Work pursuant to this guarantee, then as to the specific affected area or item of any portion of the Work, this guarantee shall be extended for one (1) year from the date of the correction or replacement of such specific affected area or item. §12.2.5 Nothing contained in Paragraph 12.2 shall be construed to establish a period of limitation with respect to any other obligation which Subcontractor might have under the Contract Documents, including Paragraph 3.4 hereof. The establishment of the time period of one (1) year after the date of Substantial Completion or such longer period of time as may be prescribed by law or by the terms of any applicable special guarantee required by the Contract Documents relates only to the specific obligation of Subcontractor to correct the Work and has no relationship to the time within which its obligation to comply with the Contract Documents may be sought to be enforced, nor to the time within which proceedings may be commenced to establish Subcontractor’s liability for loss or damage arising out of any negligence by Subcontractor in connection with the design or construction of the Work.

ARTICLE 13. DEFAULT, SUPPLEMENTATION and TERMINATION OF THE SUBCONTRACT §13.1 DEFAULT AND SUPPLEMENTATION OR TERMINATION BY McSHANE



§13.1.1 Subcontractor shall be in default and material breach of this Agreement if any of the following occur at any time: 1.) Subcontractor is adjudged bankrupt or makes a general assignment for the benefit of its creditors, or if a receiver is appointed on account of Subcontractor’s insolvency; 2.) Subcontractor refuses or fails, except in cases for which extension of time is provided, to supply enough properly skilled workers or proper materials to meet all aspects of the current Schedule; 3.), Subcontractor fails to make prompt payment to Sub-subcontractors or for materials, labor, skill or equipment; 4.) Subcontractor violates laws, ordinances, rules, regulations or orders of any public authority having jurisdiction; 5.) Subcontractor fails to correct, replace and/or re-execute faulty or defective Work done and/or materials furnished, when and if required by McShane; 6.) Subcontractor fails to complete or diligently proceed with the Work within the time herein provided; 7.) Subcontractor otherwise violates a material provision of the Contract Documents; 8) Subcontractor fails to make timely payment of all contributions to union fringe benefit funds and/or payment of dues deductions and checkoffs as required by an applicable union agreement; or 9) Subcontractor manifests an intent prior to the time fixed in the Contract Documents that it will not render its performance under the Contract Documents or will not render its performance within the prescribed time for such performance. §13.1.2 If Subcontractor is in default at any time, then McShane may, without prejudice to any other right or remedy, and after giving Subcontractor and Subcontractor’s surety, if any, three (3) business days’ written notice, take any or all of the following actions simultaneously or consecutively, all without further notice: 1.) Correct, replace, and/or re-execute such faulty or defective work, make good any such deficiencies or take over the Work and complete same, either through its own employees or through a contractor or subcontractor of its choice; 2.) Terminate the employment of Subcontractor and take possession of the site and of all materials, equipment, tools, construction equipment and machinery thereon owned by Subcontractor and may finish the Work by whatever method McShane may deem expedient. In the event of termination, this Subcontract and all representations and warranties of Subcontractor to McShane shall remain in full force and effect. McShane shall charge all costs of correcting, assisting or completing the Work to Subcontractor, including compensation for McShane’s additional services made necessary by such default, neglect or failure (including any additional architectural, engineering or other services), together with any damages to Owner or McShane caused Subcontractor’s default, neglect or failure, and the Subcontract Sum shall be reduced by the amount of such charge. If such expense of assisting or finishing the Subcontractor’s Work and other damages incurred by McShane (and not expressly waived) exceed unpaid balance of the Subcontract Sum, the Subcontractor shall pay the difference to McShane on demand. Subcontractor shall not be entitled to any further payment until the Project is complete. Nothing in this paragraph shall limit any other legal or equitable remedy that McShane may have under the Subcontract or otherwise. §13.2 TERMINATION FOR CONVENIENCE §13.2.1 McShane, by written notice executed by an officer of McShane, shall have the right to terminate and cancel the Subcontract, at its own convenience, without Subcontractor being at fault, and require Subcontractor to immediately stop Work. In such event, Subcontractor may recover from McShane payment for all Work executed and for any proven loss sustained upon any materials, equipment, tools, construction equipment and machinery, provided, however, Subcontractor may recover only for the Work performed by Subcontractor (including commitments made by Subcontractor) and the properly allocatable portion of overhead and profit in respect thereto, and not any anticipated profit, overhead or other damage. Subcontractor, upon receipt of such notice, shall secure its Work and store all material on the site in such a manner as to reasonably protect the material, and so as to prevent fire hazards and/or safety hazards, vandalism and weather damage, and shall deliver to McShane all documents of title, warranties and manufacturer’s instructions and purchase and contract rights for all goods, materials, equipment and Work on or off the site for which payment is sought from McShane or which McShane reasonably requests. Subcontractor shall have the duty to mitigate costs as is reasonably possible, and Subcontractor shall place a provision in each of its subcontracts and material supply contracts which allows for such mitigation and which bars the Sub-subcontractor and material supplier from recovering for anticipated profits and overhead in the event of such a termination. In the event any termination under Paragraph 13.1 is later determined to be improper or erroneous, such termination shall be automatically converted to a termination/cancellation as defined in this Subparagraph 13.2.1 and Subcontractor shall be limited in its recovery



to the recovery provided herein.

ARTICLE 14. EMPLOYMENT PRACTICES §14.1 NONDISCRIMINATION POLICY §14.1.1 Subcontractor and its sub-subcontractors agree not to discriminate unlawfully against any employee, applicant for employment or group of people on the basis of race, religion, color, national origin, sex, age, physical condition or veteran status, except where sex or absence of physical restrictions is a bona fide occupational qualification. Subcontractor and its sub-subcontractors will take affirmative action to insure that qualified applicants are employed, and that employees are treated during employment, without regard to their race, religion, color, sex, age, physical condition or national origin. Subcontractor shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the policies of nondiscrimination. §14.1.2 Subcontractor and its sub-subcontractors shall, in all solicitations or advertisements for employees placed by them or on their behalf, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, age, physical condition or national origin. §14.2 GIFT POLICY §14.2.1 In keeping with McShane’s policy of treating equally all persons doing or seeking to do business with or for McShane, whether as contractors, subcontractors, or suppliers, such persons and firms are advised that McShane and its employees and their families may not personally benefit from McShane’s relationships by the acceptance of gifts or gratuities. In addition, it is expected that Subcontractor’s officers and employees shall conduct all business related to this Subcontract with the highest ethical standards. §14.2.2 For purposes of this gift policy, “gifts or gratuities” means any travel, entertainment, meal, clothing or other item or service, the total value of which exceeds $25 in value in any calendar year.