Formosa Plastics. Construction Contract. General Terms and Conditions

Transcription

1 Formosa Plastics Construction Contract General Terms and Conditions October 13, 2014

2 Texas Version Page i Table of Contents Section Contents Page Definitions Contract Contractor Contractor Schedule Drawings and Specifications Other Contractors Site Work... 1 Contractual Relationship...1 Work to be Performed Contractor Preparation and Responsibility for Work Subcontractors Contractor Responsibility to Coordinate with Work of Others Contractor s Scheduling of Work Contractor shall employ competent employees Drawings and Specifications Contractor Submittals Ownership and Use of Drawings Utilities Other Facilities Supplied by Contractor... 7 Materials Supplied by Owner and by Contractor General Contractor s Responsibility for Materials Furnished by Owner Handling and Storage of All Materials... 9 Title Introduction of Hazardous Materials to Site General Violations by Contractor Work Site Maintenance, Trash Removal, and Site Cleaning Owner s Review of Contractor s Work; Inspections Tests Drug and Alcohol Prohibition Compliance with Laws and Regulations Safety General Emergencies Occupational Safety and Health Act (OSHA) Non-Discrimination Royalties and Patents Liens and Claims Passes and Badges Indemnity of Owner by Contractor INDEMNITY FOR CONTRACTOR EMPLOYEE CLAIMS GENERAL INDEMNITY No Limitation Insurance Insurance Policies Required Guarantees Progress Reports of Contractor... 19

3 Texas Version Page ii 20.1 Performance Time Progress Reports Compensation and Payment Taxes and Assessments No Damages for Delay; Overtime Delays and Extension of Time; Force Majeure Force Majeure Event Changes in the Work and Extra Work General Payment for Changes in Work Termination of Contract Terminations by Owner for Cause Terminations by Owner for Convenience Non-Assignment Confidential Information Contract Includes Entire Agreement Limitations of Liability Arbitration A. Performance Bond... Error! Bookmark not defined. B. Payment Bond... Error! Bookmark not defined. Exhibit 1 General Terms and Conditions Exhibit 1(a) Conditional Waiver and Release on Progress Payment Exhibit 1(b) Conditional Waiver and Release on Final Payment Exhibit 1(c) All Bills Paid Affidavit Exhibit 2 Insurance Requirements

4 Page 1 1. Definitions 1.1 Contract means the documents identified as composing the Contract in the Contract Summary Form. 1.2 Contractor means the entity or entities identified as Contractor in the Contract Summary Form. 1.3 Contractor Schedule means the Work schedule prepared by Contractor and approved by Owner as provided in Drawings and Specifications means drawings and specifications provided by Owner to Contractor with detailed information of the Work to be performed. 1.5 Other Contractors 1.6 Site means other contractors, vendors, suppliers and laborers, and when periodically applicable Owner s employees, engaged in construction, maintenance, and operation activities at the Site. means the facilities and premises located in the State of Texas of Owner and its affiliates where work by Contractor is required to be performed under the Contract. 1.7 Work means all work, services, equipment, and material required to be managed, coordinated, designed, engineered, specified, installed or supplied by Contractor under this Contract, including all management, coordination, work, services, equipment and material reasonably inferable for the performance of items necessary to carry out Contractor s obligations under the Contract. 2. Contractual Relationship In the performance of this Contract, Contractor shall be an independent contractor and not an agent or employee of Owner. No personnel furnished by Contractor shall be, under any circumstances, employees, agents or servants of Owner.

5 Page 2 3. Work to be Performed 3.1 Contractor Preparation and Responsibility for Work a) Contractor warrants that it has examined the Site, its Scope of Work, and the visible or planned work and available schedules of Other Contractors work that may affect Contractor s Work and assumes full responsibility for the performance of the Work, at the Contract Price and within the Contractor Schedule, in a manner adequate to meet the Site conditions and to avoid conflict with or disruption of Other Contractors work encountered during the performance thereof. b) Contractor shall, at its own cost and expense, supply and furnish at the location where the Work is to be performed: all labor, materials, equipment, tools, transportation, supervision, coordination and management; and bear all items of expense, necessary for the complete and satisfactory performance of this Contract, except only such items as Owner in this Contract specifically agrees to supply or furnish. In addition, any equipment, materials or services not specifically described in the Drawings and Specifications but which may be fairly implied as required thereby, or necessary to complete the Work for the use intended, shall be within Contractor s Scope of Work hereunder unless expressly excluded from the Scope of Work. c) Contractor shall make full preparation before proceeding with its own Work including, without limitation, coordination and verification of proper completion of work and work schedules of Other Contractors that may affect Contract s Work. If by reason of Contractor s failure in preparation, it is found necessary to reconstruct any part of the Work, Contractor shall remove and rebuild such Work at its own expense to comply with the requirements of the Contract. d) Contractor shall supervise and direct the Work, using Contractor s best skill and attention. Contractor shall be solely responsible for, and have control over, construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract and with respect to Other Contractors work. If the Drawings and Specifications give specific instructions concerning construction means, methods, techniques, sequences or procedures, the Contractor shall evaluate the jobsite safety thereof and, except as stated below, shall be fully and solely responsible for the jobsite safety of such means, methods, techniques, sequences or procedures. If Contractor determines that such means, methods, techniques, sequences or procedures may not be safe, Contractor shall give timely written notice to Owner and shall not proceed with that portion of the Work without further written instructions from Owner. 3.2 Subcontractors a) Contractor shall procure Owner s written approval before subcontracting any portion of the Work and shall obtain Owner s written approval of all subcontractors. The

6 Page 3 right is reserved by Owner to withhold its consent to the making of any subcontract. No such approval shall relieve Contractor from any of the obligations under this Contract to Owner. b) Contractor shall require each Subcontractor to be bound to the Contractor by terms of the Contract, and to assume toward the Contractor all the obligations and responsibilities, including the responsibility for safety of the Subcontractor s Work, which the Contractor is required to assume toward the Owner. Each subcontract agreement shall preserve and protect the rights of the Owner under the Contract with respect to the Work to be performed by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor, unless specifically provided otherwise in the subcontract agreement, the benefit of all rights, remedies and redress against the Contractor that the Contractor, by the Contract, has against the Owner. The Contractor shall require each Subcontractor to enter into similar agreements with any Sub-subcontractors. The Contractor shall make available to each proposed Subcontractor, prior to the execution of the subcontract agreement, copies of the Contract to which the Subcontractor will be bound. The Contractor shall require each Subcontractor to similarly make copies of applicable portions of such documents available to their respective proposed Sub-subcontractors. c) Contractor shall be and remain liable as if no such subcontract has been made or approved by Owner. Contractor shall be as fully responsible to Owner for any act or omission of any person directly or indirectly employed by Contractor, and for any act or omission of any subcontractor, any of persons either directly or indirectly employed by such subcontractor, as though the act or omission was done by an employee of Contractor subject to Contractor s direction. d) Contractor shall require in all subcontracts that the subcontractor and its subcontractors and suppliers of any tier agree to arbitration of disputes that may arise with respect to Owner, and to be joined in any arbitration conducted, under Section 30 hereof. e) Contractor shall check subcontractor s work in full detail and keep such records and furnish such reports and information relative to subcontractor and subcontractor s work as Owner may request. Owner reserves the right to investigate any subcontractors to Contractor for qualification obligations under the Contract. f) The work of any subcontractor shall be subject to inspection by the Owner s inspectors to the same extent as the work of Contractor, and all subcontracts let by Contractor under the terms hereof shall so provide. 3.3 Contractor Responsibility to Coordinate with Work of Others a) Contractor acknowledges that there will be many Other Contractors working at or near the Site at the same time as Contractor performs its Work. Planning, exchanges

7 Page 4 of information and coordination of activities by and among Contractor and Other Contractors is essential to achieving timely completion of Work while minimizing conflicts, disruptions and delays. UNLIKE OTHER CONSTRUCTION PROJECTS IN WHICH CONTRACTOR MAY HAVE PARTICIPATED, THE PLANNING, EXCHANGES OF INFORMATION AND COORDINATION OF ACTIVITIES DIRECTLY BY AND AMONG CONTRACTOR AND OTHER CONTRACTORS CONCERNING THE WORK IS THE PRIMARY SCHEDULING AND WORK COORDINATION TOOL USED FOR THE WORK. b) Before starting operations, and from time to time as Work progresses, Contractor shall examine the work installed by Other Contractors, or for work to be installed shall examine the Contract Documents and discuss such work with the installing Other Contractor(s), insofar as such work influences Contractor s Work. Contractor will maintain direct liaison with all Other Contractors whose work could affect the Work under this Contract. Contractor shall promptly notify Owner and the applicable Other Contractor(s) in writing if any condition exists that will prevent Contractor from completing its Work in accordance with the Contractor Schedule and the Contract. Should Contractor start or continue its Work without such notifications, such action shall be deemed Contractor s acceptance of all work of the Other Contractors and of conditions then existing. Contractor shall also promptly notify in writing Owner and Other Contractors that may be affected by Contractor s Work of any proposed changes in Contractor s Work or Contractor s Schedule and planning, and any such changes shall be coordinated with the affected Other Contractor(s). c) During the course of its Work, Contractor is responsible to manage, coordinate, plan, schedule and execute its Work in such a manner that will not interfere with the work of Other Contractors, and so that Other Contractors work will not interfere with the Work of Contractor. Owner will assist this coordination of the work of Contractor and Other Contractors by holding regular Coordination Meetings. (See 20.2(c)). Owner will provide information from Contractor and Other Contractors described in 3.4, with any modifications over time from coordination among Contractor and Other Contractors, as well as overall Project schedule milestones reflected in Owner s master schedule. It is the duty of Contractor at the Coordination Meetings and otherwise during the course of the Work to exchange scheduling and planning information with Other Contractors whose work may affect or be affected by the Work and to adjust the time and location of engaging work forces and resources in Work to avoid delays, disruptions or conflicts and to accommodate the orderly and timely overall progress of the Work and Other Contractors work. d) The Contractor shall promptly notify Owner if Contractor cannot coordinate any portion of the Work scheduling and planning with any Other Contractors. The Contractor shall fully describe such circumstances to Owner in writing. Owner will consider the written information from Contractor and the affected Other Contractor(s), and any other applicable information then available to Owner, and

8 Page 5 render a decision on how the Contractor and Other Contractors shall proceed. The Owner shall not be liable to Contractor for any such decision rendered in good faith nor shall any such decision rendered in good faith be considered intentional misconduct, active interference or arbitrary and capricious. Notification of Owner of the failure of Other Contractors to timely and properly complete their work does not relieve Contractor of its continuing obligation to coordinate its Work with Other Contractors. 3.4 Contractor s Scheduling of Work a) Contractor s scheduled hours of work, while on Owner s Site must be approved by Owner. b) Contractor shall submit within 15 days after the date of execution of this Contract for Owner s approval, a time schedule for the completion of the various portions of the Work. Upon Owner s approval of such schedule it shall be the Contractor Schedule. The Contractor Schedule shall comply with the completion date in the Contract and with milestones established in Owner s master schedule. It shall be itemized and detailed, shall show manning, resource availability and the start and finish times, as well as the duration, for each work item. The Contractor Schedule shall be broken down and itemized by separate areas when Contractor is working in more than one area. The Contractor Schedule shall be used for providing information for coordination and planning of Work by Contractor with Work of Other Contractors. Its scheduled events shall be modified as necessary for proper coordination of Work, provided that in no event shall such modifications change the completion date in the Contract unless the Contract is separately amended for this purpose under Section 24. Contractor shall comply with the Contractor Schedule, as properly modified, in all respects in the performance of the Work. The Contractor Schedule shall not be used as a basis for determining payments due, as described in Section 21. c) Contractor shall make available, for Owner s use during the progress of the Work, any portion of completed Work as Owner may direct. 3.5 Contractor shall employ competent employees a) Contractor shall employ, at the Site, a competent English-speaking superintendent who, on behalf of the Contractor, shall have complete charge of all Work, and who shall have full authority to represent Contractor in all matters concerning the performance of the Work under his supervision. Any communications given such person by Owner shall be considered as given to Contractor. The superintendent shall be the primary liaison of Contractor for the coordination activities described in 3.3. Contractor shall advise Owner in writing of the name, address and telephone (day and night) of the designated superintendent. Any employee of the Contractor, including

9 Page 6 the superintendent, determined by Owner as unskilled or unfit shall be promptly replaced by Contractor. b) Contractor shall provide demonstrated skill by its employees, subcontractors, agents and representatives in appropriate crafts, welding, etc., by presenting current certification (within the last 12 months) and/or testing results upon request by Owner or such other further documentation as Owner may reasonably request. Nevertheless, Owner s review, or lack of review of any such certification, testing or documentation shall not any in respect constitute acceptance by Owner of Contractor s employees craft skills and does not modify, amend or relieve Contractor of Contractor s responsibilities and liabilities contained in this Contract. 3.6 Drawings and Specifications a) Anything mentioned in the Specifications and not shown on the Drawings, or shown on the Drawings and not mentioned in the Specifications, shall be of like effect as if shown and mentioned in both. In case of direct conflict between the Specifications and the Drawings, or in case of discrepancies, omissions and/or errors, the matter shall be submitted immediately to Owner for determination. Such determination shall be at the sole discretion of Owner and shall be binding on both parties, subject to Section 24 for material changes in the Wok caused by the Owner, if any. b) Contractor agrees to furnish such drawings, specifications and data in addition to the Drawings and Specifications as Owner may specify or as are reasonably necessary to complete the Work. Owner will not issue approvals of drawings, specifications and data furnished by Contractor, but Owner reserves the right to review and comment on such drawings, specifications and data to the extent, if any, that Owner deems desirable. Contractor, however, shall begin and continue performance of its Work under this Contract without waiting for Owner s review or comments. Drawings will not be returned to Contractor unless Owner elects to make comments. Any such review and comment by Owner or any failure to review, unless expressly agreed in writing to the contrary, shall not alter any of the terms and conditions of this Contract or relieve Contractor of any responsibility or liability for the accuracy and completeness of such data and materials or be interpreted as Owner s approval of such drawings and data. 3.7 Contractor Submittals a) Contractor and its subcontractors shall furnish Owner, with such promptness as to cause no delay in its Work or in the work of any Other Contractors, all shop fabrication or setting drawings and schedules ( Submittals ), properly identified, required for the Work by the specifications or requested by Owner. Review of shop drawings by Owner shall not relieve Contractor from responsibility for deviations from the drawings or specifications, unless Contractor has, in writing, called the Owner s attention to such deviations at the time of submission and received Owner s

10 Page 7 written acceptance of such deviation, nor shall it relieve Contractor from responsibility for errors or omissions of any sort in the Submittals. The Contractor shall confirm upon transmitting to Owner in writing on each Submittal that it reviewed and coordinated the information in the Submittal with the Drawings and Specifications. Unless otherwise specified in writing, Contractor shall submit to Owner: 1) For preliminary review, at least three (3) sets of Submittals, two sets of which will be retained by Owner and the remainder returned to Contractor with notations by the Owner, if any. 2) For final review, one (1) set of the reproducible drawings. 3.8 Ownership and Use of Drawings a) All Drawings and Specifications and copies thereof furnished by Owner or prepared for Owner by Contractor are Owner s property and not to be used by Contractor for any other work; and, with the exception of the signed Contract set, are to be returned to Owner on request at the completion of the Work. 3.9 Utilities a) Owner will not furnish any utility services to Contractor including, without limitation, gas, water and electrical services unless set forth in the Scope of Work. Owner may, at Owner s sole discretion, allow Contractor to tie into Owner s existing service lines; however, Contractor shall, at its own expense, furnish, install and remove from Owner s Site, upon completion of the Work, all temporary lines and connections necessary to convey the services to Contractor Other Facilities Supplied by Contractor a) Contractor shall provide at its own cost such sanitary, warehouse and other nonpermanent facilities, which are not made available by Owner to Contractor at the Site. Such facilities shall comply with Owner s standards in regards to size, shape, appearance and type of construction. All facilities of Contractor on the Site shall be of non-combustible construction. Location of such facilities shall be as directed by Owner. All such facilities so furnished by Contractor shall be removed by Contractor promptly upon completion of the Work or at the request of Owner. b) The Contractor must provide all necessary sanitary facilities for its employees and subcontractors, including toilet, clean-up facilities, and water drinking facilities.

11 Page 8 4. Materials Supplied by Owner and by Contractor 4.1 General a) Owner will furnish only those materials and/or services specifically set forth in the Bid Package as materials and services to be furnished by Owner, if any. Any quantity of materials and/or services not specifically set forth in the Bid Package as materials and/or services to be furnished by Owner but are required to perform the Work shall be considered within the Contractor s Scope of Work and shall be supplied by Contractor at its own cost, unless otherwise explicitly stated to the contrary in this Contract. b) Where Contractor supplies material called for by the Work in the Contract that is specified by trade name or number, no substitution is permitted without written permission of Owner s representative. c) Where Owner is supplying material, particular material may be made available and conveyed to Contractor at Owner s yard or warehouse or may be delivered directly to Contractor by Owner s vendor. d) Owner shall furnish Contractor, upon request by the Contractor, information Owner has stating the identity of vendors of Owner-supplied material, locations, availability, delivery schedules and any other reasonably available information for those materials, supplies, equipment, labor, or services that Owner has agreed to provide to Contractor under the terms of this Contract. e) Contractor may obtain Owner-supplied material that is in Owner s yard or warehouse at the Site after providing Owner with reasonable written notice that it wishes to take possession of portions of that material on a particular day, which notice in no event will be less than seven days before the day Contractor proposes to accept delivery of the material requested at the Owner s yard or warehouse. 4.2 Contractor s Responsibility for Materials Furnished by Owner a) If the materials are to be delivered directly to Contractor by material vendors, these materials will be specified in a Receiving Ticket provided by Owner. b) Contractor shall then be responsible for the following actions: 1) Notify, on a timely basis (at least seven (7) business days), the aforesaid vendors of the items, quantity, shipping destination and delivery schedule. 2) Contractor shall fill out and sign the Receiving Ticket and forward same to Owner s Storeroom (on Owner s premises) within two (2) business days after receipt of material.

12 Page 9 3) Any additional freight charges resulting from Contractor s request to have materials furnished by Owner shipped to a location more than 100 miles from the actual Site of the installed Work shall be the responsibility of Contractor. 4) In case of any material discrepancy or discrepancies, quality defects and/or delivery delays, Contractor shall follow-up with supplying vendors directly in order to rectify the problem. Contractor shall notify Owner promptly in writing (within (5) business days) of any unresolved problems relating to material deliveries. 4.3 Handling and Storage of All Materials a) Contractor shall be responsible for the receipt, inspection, storage, security, and care of all materials, including but not limited to, materials from Owner s storeroom, Owner s carrier, or directly from the vendor. b) Contractor shall be responsible for receiving, loading, unloading, transporting, securing and storing all material received from Owner s warehouse or yard or from vendors in a safe and workmanlike manner to eliminate damage or loss. The Contractor shall be solely responsible for all damages to, or loss of, any equipment or materials while being handled, secured or stored by Contractor. c) All materials shall be stored at designated areas assigned by Owner, which may be unimproved. Contractor shall protect all materials from damage or loss by suitable means acceptable to Owner. Contractor is solely responsible for preparing and maintaining its designated area for (1) appropriate storage of equipment and materials, including but not limited to protection from weather and water, and (2) security in the designated area. d) Materials and equipment subject to weather discoloration, such as building components in storage, spun aluminum light poles, etc., shall be properly protected. Machined and polished surfaces and exposed parts of all materials subject to rust or corrosion shall be frequently greased and/or otherwise maintained as specified by the manufacturer to preserve their condition and kept covered at the expense of the Contractor. e) Contractor shall maintain valves, fittings, and other materials in a manner to prevent them from being damaged, and in the manner recommended by the manufacturer to preserve their condition, prevent loss, and permit easy access for checking of quantities. Contractor shall place valves, flanged fittings or other material with finished surfaces always on skids to prevent the surfaces from coming into contact with the earth. A planked-over area raised above the ground shall be an acceptable alternate to skids.

13 Page 10 f) Contractor shall segregate and store separately all fill, sand, gravel, rebar, and anchor bolts, upon delivery to the Site, to prevent the commingling of such materials and minimize loss through admixture with surface water, soil or refuse. Fill, sand, and gravel shall not be stored over existing underground pipelines or other underground facilities. Rebar and anchor bolts shall be stored above ground on pallets or logs. g) Contractor may store conduit and cable reels outside, but they shall be adequately blocked on dunnage and adequately protected from weather and dirt. h) Contractor must store inside an enclosed temporary warehouse area furnished by Contractor conduit fittings, hardware, instrumentation, push-button switches, switch boards, MCCs, starter panels. switchgear, HV termination kits, light fixtures, distribution panel boards, fixture wire, switch board control wire, control panels, control devices, cable ends (which shall be wrapped with proper tape) and any equipment which is specified for indoor storage. i) Contractor shall immediately notify Owner in writing, of damage to, or loss of, any Owner-furnished materials. j) Contractor shall maintain a current log of all materials furnished by Owner, easily accessible by Owner, indicating the quantity of materials received and used and the remaining balance. k) Unless otherwise stated in the Bid Package, any surplus materials of like kind to that provided by Owner delivered to the Site shall belong to Owner. Scrap means any materials not incorporated into the Work, whether of like kind to that supplied by Owner under the Contract or that result from demolition activities at the Site under the Contract, that in Owner s opinion have value. Owner may at its option (1) require Contractor to remove Scrap from the Site at Contractor s expense, or (2) deliver Scrap to Owner s location designated for the storage of such materials. Removal of any materials from the Site, including but not limited to Scrap, shall require Owner s written authorization. 5. Title a) The title to all Work completed, all Work in the course of construction, and all material furnished by Owner or by Contractor, irrespective of the location thereof, shall be in Owner, but the ownership thereof by Owner will not absolve Contractor for liability for loss of or damage to same as provided herein.

14 Page Introduction of Hazardous Materials to Site 6.1 General a) Contractor shall submit Material Safety Data Sheets complying with the Federal Hazard Communication Standard (OSHA ) and obtain the approval of Owner before introducing any Hazardous Materials onto Owner property or the Site. Such materials shall be properly labeled and strictly controlled by Contractor as to use and disposal. Storage and use of and personal protection for handling such materials must comply with the instruction on the Material Safety Data Sheets. b) Contractor is responsible for Hazardous Materials introduced to the Site by itself, Contractor s Subcontractors, and Contractor s Sub-Subcontractors. Contractor shall indemnify, defend and hold harmless Owner, including its officers, directors, employees and agents from and against all claims, losses, damages, liabilities, and expenses, including attorney s fees and expenses, arising out of or resulting from those Hazardous Materials introduced to the Site by Contractor, Contractor s Subcontractors and Contractor s Sub-Subcontractors. 6.2 Violations by Contractor a) Owner shall have the right to immediately stop the performance of all or any part of the Services impacted if at any time Owner in its reasonable judgment determines that Contractor has violated any of the provisions of this Section. Further, if Contractor fails to initiate correction any such violation within seven (7) days following the written notice of Owner to Contractor of the violation, and thereafter promptly and diligently prosecute such correction, Owner shall have the right to terminate the Contract, without penalty, immediately upon written notice thereof to Contractor. In all other respects, such termination shall be in accordance with the provisions of the Termination For Default Section hereof. 7. Work Site Maintenance, Trash Removal, and Site Cleaning a) The Contractor s Work site must be maintained in a neat and orderly manner on a daily basis. Contractor shall keep Owner s premises and the adjoining premises, driveways, and streets clean of rubbish caused by Contractors operations. If Owner, in Owner s sole opinion, deems that Contractor s Work site requires cleaning, Owner will notify Contractor in writing of such requirement. Owner may not allow Contractor to resume work until such cleaning has been completed to Owner s satisfaction. If Contractor does not comply with Owner s notice within 24 hours after receipt, Owner may cause such cleaning to be done and charge the cost of the same to Contractor and deduct such costs from any moneys due hereunder. If a dispute arises among the Contractor and other contractors as to the responsibility for maintaining the areas of their work, keeping access road clean and free of hazard, and keeping

15 Page 12 surrounding areas free from waste materials and trash, Owner may clean up and allocate the costs among the contractors as it determines to be just. b) Owner will not provide dumpsters for Contractor s trash disposal. c) Contractor shall haul waste and trash off Owner s premises and dispose of them at the proper location. Any materials which are generated from demolition activities on Owner s premises must be disposed of in accordance with the bid documents; however, other than plant trash, Contractor must not remove or dispose of any materials, including, but not limited to contaminated solid or hazardous waste (per RCRA) without Owner s written authorization. If in the performance of the Work, discharges of pollutants, oils, greases or toxic materials have occurred, the Contractor shall be responsible, at Contractor s sole cost and expense, for clean-up of all affected areas and/or removal of all affected materials to Owner s satisfaction in accordance with all Federal, State and Local laws, orders, rules and regulations. See Section 4.3 (b) concerning Contractor s duties with respect to Scrap. d) Upon termination or completion of the Work, Contractor shall remove all of its tools, equipment, and temporary facilities, and shall leave all portions of the Site in which Contractor has operated Broom Clean and ready for use. 8. Owner s Review of Contractor s Work; Inspections a) All Work and/or materials furnished by Contractor shall be at all times open to inspection by Owner. Contractor shall provide for Owner s representative sufficient, safe, and proper facilities for access and inspection. When any Work is being executed away from the premises, Owner shall be notified in a reasonable time where such Work is to be done and when it will be ready for inspection, so that Owner may, if it so desires, inspect the same from time to time before delivery to the Site. Any item of the Work being executed away from the Site shall be sufficiently labeled so as to make clear to third parties any ownership interest of the Owner therein. b) If the Scope of Work, specifications, Owner s instructions, laws, ordinances, or any public authority require any Work to be specially tested or approved, Contractor shall be responsible to keep Owner appraised of such requirements and shall give Owner reasonable notice of the Work s readiness for inspection. Furthermore, if the inspection is by another authority other than the Owner, reasonable notice of the date for such inspection shall be given to the Owner by the Contractor. c) Inspection or failure to inspect by Owner shall not relieve Contractor of any responsibility or liability hereunder or, in particular, with respect to materials and workmanship nor shall such, in any respect, constitute acceptance thereof by Owner.

16 Page 13 d) Contractor shall not proceed with any subsequent portion of Work if Drawings or Specifications require that inspection be done and accepted by Owner or Owner s representative prior to proceeding with any subsequent portion. e) If upon inspection, any portion of the Work does not meet acceptable standards, in the sole opinion of the Owner, Contractor shall replace and repair such unacceptable Work and/or materials, including replacement of subcontractors if such are not satisfactory to Owner, at Contractor s sole cost. In the event of Contractor s failure to replace any such unacceptable Work or materials within a reasonable time, Owner may replace the Work and/or materials itself, by whatever method it may deem expedient, and deduct the cost thereof from the monies due, or thereafter to become due, to the Contractor under this Contract f) Owner reserves the right to make an examination before final acceptance of the Work as a whole. If such Work is found by Owner to be defective or unacceptable in any material respect whether or not due to the negligence or fault in any respect of Contractor or its subcontractors, Contractor shall defray all the expenses of both such examination and such additional costs as may be necessary to render the Work satisfactory to Owner. lf, however, such Work is found to meet both the requirements of the Contract, Contractor shall be compensated for its costs as if such examination and replacement performed by the Contractor constituted a change within the meaning of and in accordance with Section 24 hereof. 9. Tests a) Contractor shall perform all tests as are specified in the Scope of Work, specifications or drawings. Contractor shall provide Owner a reasonable advance written notice of time and place all tests will be performed. Additional tests may be requested by Owner and Owner shall pay all costs of such tests or engineering services, except where the tests show the workmanship or materials to be defective or unacceptable, in the sole opinion of Owner, in which event all subsequent tests which are necessary, in Owner s opinion, to prove correction of defective or unacceptable workmanship or materials shall be at the sole cost of Contractor. 10. Drug and Alcohol Prohibition a) Owner prohibits the use, sale, purchase, transference, and/or possession of any illegal drugs, prohibited drugs, any drugs used in an illegal manner, or alcoholic beverages on Owner s premises. Contractor shall take all necessary precautions and actions, including but not limited to pre-employment/new-hire drug testing, random drug testing, post-accident drug testing, for cause drug testing, and any other legal drug testing, to ensure that none of Contractor s employees are allowed access to Owner s premises while under the influence of any of the substances identified above. Owner may, as a condition of access to Owner s premises, require Contractor provide Contractor s employees most recent drug test results or proof of such testing.

17 Page 14 Contractor will allow Owner to audit Contractor s records, for compliance with the drug and alcohol testing specified herein, however, Owner s audit, or failure to audit, shall not any in respect constitute acceptance by Owner of Contractor s drug and alcohol testing program and does not modify, amend or relieve Contractor of Contractor s responsibilities and liabilities contained in this Contract. Contractor assumes sole responsibility for any property damage and/or personal injuries resulting from Contractor s employees conduct while under the influence of drugs or alcohol. 11. Compliance with Laws and Regulations a) The Contractor shall comply with and be absolutely and solely responsible for all of Contractor s employees engaged in the Work, as well as Contractor s representatives, suppliers, subcontractors, and visitors and shall be subject to all Federal, State, and Local rules and regulations pertaining to conduct on the Site. or in the Contractor s Work site to the extent that Contractor s Work, in whole or in part, is performed off the Site, as the case may be, and any special rules as may be set by Owner for the safe, orderly and efficient conduct of all operations on the Site. b) Release or spilling of pollutants, oils, greases and toxic materials to the earth, premises, ditches, or systems is prohibited. Any such action will be cleaned by Contractor to Owner s standards. Notwithstanding anything contained herein to the contrary, Contractor shall observe and be subject to, at its sole cost and expense, all Federal, State and Local environmental laws, rules and regulations. c) Contractor shall comply strictly with all Federal, State, and Local laws, orders, rules, and regulations applicable to its operation in the performance of the Work hereunder. Contractor shall procure and pay for all permits and inspections required by any governmental authority for any part of the Work, except, and only to the extent otherwise specified in writing by Owner Contractor shall promptly notify Owner if the drawings and/or specifications are at variance with requirements of any such applicable law, ordinance, rule or regulation. Contractor is specifically responsible for compliance with all laws pertaining to the eligibility of its employees to work. d) Contractor warrants that the Work, and the performance thereof, under the Contract will conform in all respects to the requirements set forth in this Section and agrees to indemnify, defend and hold Owner harmless from any and all liabilities, claims, civil fines and penalties, including costs, settlements, and attorney s fees, which may arise out of the Work which does not meet these requirements. e) The Contractor shall include the provisions of this Section in every subcontract issued by Contractor so that such provisions will be binding upon each of Contractor s subcontractors and shall require the subcontractors to do so likewise.

18 Page Safety 12.1 General a) Contractor shall take all necessary precautions to protect all property and persons from damage or injury arising from the Work and at the Site and in its Work area(s) while under Contractor s control. Contractor shall, while upon or about the Site, observe and comply with all fire, safety, and other rules and regulations heretofore or hereafter prescribed by Owner, and shall be responsible for observance thereof by all of Contractor s employees, agents, licensees, permitees, subcontractors, and any other person allowed access to the Site by Contractor. b) Contractor shall be solely responsible for developing and implementing all safety programs with respect to its Work, the Site and Work area(s) and for providing its employees personal safety equipment as required by the Owner. All necessary permits required on the Site must be obtained by the Contractor from the appropriate Owner representative. c) Contractor acknowledges that safety rules may change from time to time, and it is Contractor s responsibility to keep current on all safety rules, including Owner s safety rules and regulations and to inform and appropriately train his employees, and his subcontractor s employees with regard to any such hues and/or changes Emergencies a) In an emergency affecting the safety of life or of the Work, or of adjoining property, the Contractor, without special instruction or authorization from Owner, is hereby permitted to act at its discretion, to prevent or mitigate such threatened loss or injury. Any compensation or adjustment in Contract Price claimed by the Contractor due to such emergency shall be determined by the Field Change Order procedures of Section Occupational Safety and Health Act (OSHA) a) Contractor warrants that the Work, and the performance thereof, under the Contract complies with and conforms in all respects to the mandates of the Occupational Safety and Health Act and all applicable Regulations, Rulings, Orders and Standards promulgated thereunder and agrees to indemnify, defend and hold Owner harmless from any and all liabilities, claims, civil fines and penalties, including costs, settlements, and attorneys fees, which may arise out of the Work which does not meet these requirements. b) All equipment to be used in the performance of the Work must meet the OSHA inspection and certification program. At Owner s request, documentation of such program must be provided to Owner. Nevertheless, Owner s review, or lack of review

19 Page 16 of any such documentation provided, shall not in any respect constitute acceptance by Owner of Contractor s program and does not modify, amend or relieve Contractor of Contractor s responsibilities and liabilities contained in this Contract. 13. Non-Discrimination a) Contractor, in performing the Work required hereunder, shall comply with all Federal, State and Local laws, rules, regulations and orders prohibiting and/or regulating discrimination in the Work place, including, without limitation, the provisions of title VII of the Civil Rights Act of 1964 and of Executive Order and shall not discriminate against any employee or applicant for employment because of religion, race, color, sex, age or national origin or physical handicap. 14. Royalties and Patents a) Contractor hereby warrants the use or sale of materials and equipment manufactured or delivered hereunder will not infringe claims of any patent (to the extent the design for such materials and equipment is not furnished by Owner); and Contractor agrees to be responsible for and to defend at its sole expense all suits and proceedings against Owner based on any such alleged patent infringement and pay all costs, expenses, judgments and damages, including all attorneys fees, which Owner may have to pay or incur by reason of any such suit or proceedings. 15. Liens and Claims a) Contractor does hereby indemnify and save harmless Owner from all claims, demands, causes of action or suits of whatsoever nature arising out of the services, labor, equipment and materials furnished to Contractor by its subcontractors and Subsubcontractors and suppliers of any tier. b) Contractor shall immediately pay and discharge, or shall provide security sufficient and satisfactory in itself to pay and discharge, any obligation or alleged obligation it or any of its subcontractors and suppliers may have, in aid of the enforcement of which a lien is established, or is attempted to be established upon or against Owner s property or that of Owner s affiliates, subsidiaries, or related companies wherever the same may be situated. c) As a condition precedent to any payment hereunder, Contractor shall submit waivers and releases of Contractor and Contractor s subcontractors and suppliers of any and all claims on the forms attached as Exhibit 1. Such releases shall be submitted covering all such claims as a condition precedent to final payment.

20 Page Passes and Badges a) Before access to Owner s premises will be allowed, Contractor shall acquire from Owner, for each of Contractor s employees, agents, representatives, subcontractors employees and any other persons that Contractor requires in the performance of the Work, an Identification Badge. Such Identification Badge must be carried and clearly displayed by each individual while on Owner s premises. Contractor shall comply with all of Owner s entry requirements to obtain Identification Badges and/or Vehicle Passes. Owner may, at Owner s sole discretion, deny access to any individual or vehicle that does not have an Identification Badge and/or Vehicle Pass. b) Contractor is responsible for collecting and returning to Owner any and all badges, passes, vehicle passes, and similar permissions of Contractor s employees upon the completion of Contractor s Work. In the event that any such permission is not so collected and returned, the Contractor agrees to accept a $50.00 charge for each permission not returned, and for any individual that is on the Owner s premises by reason of the possession of such permission, the Contractor agrees that the Indemnity contained in Section 17 of the Contract shall be extended to Owner in the event of any damages being incurred by Owner for any reason related to the entrance of such individual onto Owner s premises, including but not limited to damages resulting from the injury or death of such individual or others, regardless of the completion status of the Contractor s Work or the employment status of the individual involved. 17. Indemnity of Owner by Contractor 17.1 INDEMNITY FOR CONTRACTOR EMPLOYEE CLAIMS. a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, CHAPTER 151 OF THE TEXAS INSURANCE CODE, CONTRACTOR SHALL INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS OWNER AND ITS AFFILIATED COMPANIES (INCLUDING BUT NOT LIMITED TO THOSE ENTITIES DESCRIBED IN PARAGRAPH 2(A) OF EXHIBIT 2 INSURANCE REQUIREMENTS, AND EACH OF THEIR SHAREHOLDERS, PARTNERS, OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, EMPLOYEES, JOINT VENTURERS, INVITEES AND LICENSEES, AND ANY PERSON OR ENTITY ANY OF THEM HAS CONTRACTUALLY AGREED TO INDEMNIFY (COLLECTIVELY, THE OWNER INDEMNITEES ) FOR, FROM, AND AGAINST ALL CLAIMS, LOSSES, EXPENSES, COSTS, DEMANDS, SUITS, CAUSES OF ACTION, JUDGMENTS, AND DAMAGES, INCLUDING WITHOUT LIMITATION, ATTORNEYS FEES AND EXPENSES, FOR BODILY INJURY OR DEATH OF ANY EMPLOYEE OF CONTRACTOR, ITS AGENTS, REPRESENTATIVES OR SUBCONTRACTORS OF ANY TIER, WHICH ACTUALLY OR ALLEGEDLY ARISES OUT OF OR IS RELATED TO, IN ANY WAY, THIS CONTRACT OR THE WORK TO BE PERFORMED UNDER THIS

21 Page 18 CONTRACT, INCLUDING BUT NOT LIMITED TO CLAIMS OCCASIONED BY, CONTRIBUTED TO, OR ARISING OUT OF, IN WHOLE OR IN PART, THE NEGLIGENCE, BREACH, VIOLATION OF ANY STATUTE, RULE OR REGULATION, STRICT LIABILITY OR OTHER ACT OR OMISSION OF CONTRACTOR, ITS EMPLOYEES, AGENTS, REPRESENTATIVES OR SUBCONTRACTORS OF ANY TIER, EVEN IF THE BODILY INJURY OR DEATH IS CAUSED BY OR ALLEGED TO HAVE BEEN CAUSED BY, IN WHOLE OR IN PART, THE SOLE, COMPARATIVE OR CONCURRENT NEGLIGENCE, FAULT OR STRICT LIABILITY OF ANY OF THE OWNER INDEMNITEES GENERAL INDEMNITY a) FOR ALL CLAIMS NOT ADDRESSED IN THE ABOVE SECTION 17.1, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR DAMAGE TO OR LOSS OF USE OF PROPERTY AND CLAIMS FOR BODILY INJURY TO OR DEATH OF ANY PERSON OTHER THAN ANY EMPLOYEES OF CONTRACTOR, ITS AGENTS, REPRESENTATIVES OR SUBCONTRACTORS OF ANY TIER, AND CONTRACTOR SHALL INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS THE OWNER INDEMNITEES FOR, FROM, AND AGAINST ALL CLAIMS, LOSSES, EXPENSES, COSTS, DEMANDS, SUITS, CAUSES OF ACTION, JUDGMENTS AND DAMAGES, INCLUDING WITHOUT LIMITATION, ATTORNEYS FEES AND EXPENSES, OF ANY NATURE WHATSOEVER ARISING OUT OF OR RELATED TO THIS CONTRACT OR THE WORK TO BE PERFORMED UNDER THIS CONTRACT, INCLUDING, BUT NOT LIMITED TO, CLAIMS OCCASIONED BY, CONTRIBUTED TO, OR ARISING OUT OF, IN WHOLE OR IN PART, THE NEGLIGENCE, BREACH, VIOLATION OF ANY STATUTE, RULE OR REGULATION, STRICT LIABILITY OR OTHER ACT OR OMISSION OF CONTRACTOR, ITS EMPLOYEES, AGENTS, REPRESENTATIVES OR SUBCONTRACTORS OF ANY TIER, EXCEPT CONTRACTOR S OBLIGATIONS UNDER THIS PARAGRAPH SHALL NOT APPLY TO CLAIMS CAUSED BY THE NEGLIGENCE, FAULT, VIOLATION OF A STATUTE, ORDINANCE, GOVERNMENTAL REGULATION, STANDARD OR RULE, OR THE BREACH OF CONTRACT BY THE OWNER INDEMNITEES, THEIR AGENTS, EMPLOYEES, OR ANY THIRD PARTY UNDER THE CONTROL OR SUPERVISION OF THE OWNER INDEMNITEES (OTHER THAN CONTRACTOR AND ITS AGENTS, EMPLOYEES OR SUBCONTRACTORS OF ANY TIER).

22 Page No Limitation 18. Insurance a) The indemnification obligations in this Section shall not be limited to damages, compensation, or benefits payable under insurance policies, workers compensation acts, disability benefits acts, or other employees benefit acts. b) The defense, hold harmless and indemnification obligations in this Section 17 shall survive the termination or expiration of this Contract Insurance Policies Required 19. Guarantees Contractor shall procure at Contractor s expense and maintain the insurance required by Owner s Insurance Requirements. a) Contractor warrants that all materials furnished and all Work performed by Contractor pursuant to this Contract shall be of the best quality of their respective kinds (unless otherwise authorized by Owner), be free from faulty design (to the extent said design is not specified by Owner), workmanship, or materials and to be of sufficient size and capacity and of proper material so as to fulfill in all respects the operating conditions specified. b) Contractor agrees that it will within a period of 12 months after final acceptance of the Work as a whole, at its own expense and without cost to Owner, repair or replace all materials, equipment or Work furnished or performed by Contractor that does not conform to the warranty stated above, and repair or replace any damage to other work caused by any such non-conforming materials, equipment or Work or by the above repairing or replacement of such defective Work. Owner may, at its option, make any necessary repairs and charge the cost thereof to Contractor. Contractor hereby separately agrees to inform Owner of the existence of any defects, whether latent or patent, immediately upon becoming aware thereof, and failure to do so shall constitute a material breach hereunder. 20. Progress Reports of Contractor 20.1 Performance Time a) Time is of the essence in Contractor s performance of this Contract. All actions taken by Contractor shall be taken to ensure that the performance of this Contract is fully expedited. Contractor shall indemnify and hold harmless Owner from and against any cost, penalty or liability incurred by Owner because of Contractor s failure to