Date:XX/XX/XXXX

SubcontraactorFederalIDNo.SubTTaxID
Subcontraact#:SL

CostCode
e:XXXX

SUBCONTRACTAGREE MENT

ThisAgree
ementisente
eredintoontthisday_____
___of20_____,betweenD
DirectContracctor,

GSEConsttructionCo.,Inc.
6950PresstonAve.
Livermore
e,CA94551
Tel:9254
4470292
Fax:9254
4470962

hereinafte
ercalledtheContractor,and

FirmNam
me
FirmAdd
dress
FirmCityy,FirmStatteFirmZip

Tel:Firm
mPhone
Fax:Firm
mFax

ercalledSub
bcontractor.ThisAgreem
mentisfortheefollowingprroject:
hereinafte

udProjecctName
JobShipA
Address
JobShipC
City,JobSh
hipStateJo
obShipZip

hereinafte
ercalledtheProject.

WhereastheDirectCo
ontractorhasenteredintoaDirectConttractdated__StartMonth_,with:

Custome
erName
Custome
erAddress
Custome
erAddress2
Custome
erCity,CusstomerState
CustomerZZip
1

hereinaftercalledOwner.

WHEREAScopiesoftheDirectContractOwneragreementareonfileintheofficeoftheContractorand
havebeenexaminedbytheSubcontractor.

Thelender,ifany,forthisProjectis(specifybranchaddress):

FirmName
FirmAddress
FirmCity,FirmStateFirmZip
Tel:FirmPhone
Fax:FirmFax

Iftheinformationaboveisnotcompleted,thereisnoknownlender.

NOWTHEREFOREitisagreed:

SECTION1.ENTIREAGREEMENT;SCOPEOFWORK

Subcontractoragreestofurnishalllabor,services,materials,supervision,installation,cartage,hoisting,
supplies,insurance,equipment,scaffolding,tools,andotherfacilitiesofeverykindanddescriptionfor
promptandefficientexecutionofthefollowingdescribedwork(theWork):

udScopeOfWork

ProvideudNumofSubmittalsReqsetsofsubmittalsforSubcontractorWork.Allsubmittalsare
requiredbyudSubmittalsReqBy.

The phrase Contract Documents as used herein is defined to mean this Agreement and Exhibits A
(Insurance Requirements), [LIST OTHER EXHIBITS] thereto, and any other attachments referenced
therein;andtheagreementbetweenDirectContractorandOwner,includingtheplans,specifications,
general conditions, special provisions drawings, specifications, addenda, amendments, modifications,
exhibits,andallotherdocumentsformingorbyreferencemadeapartthereof(DirectContract).This
Agreement, and all of the foregoing documents, shall be considered a part of this Agreement by
reference thereto, and Subcontractor agrees to be bound to the Direct Contract by the terms and
provisionsthereof,inthesamemannerthatDirectContractorisboundtoOwner.

Subcontractor certifies and agrees that it is fully familiar with all of the terms of this Agreement,
includingtheContractDocuments,allofwhichSubcontractoracknowledgeshavebeenmadeavailable
toit,thelocationofthejobsite,andtheconditionsunderwhichtheWorkistobeperformedandthatit
entersintothisAgreementbaseduponitsowninvestigationofallsuchmattersandisnotrelyingonany
opinions or representations of Direct Contractor. This Agreement is a fully integrated agreement and
represents the entire agreement between Direct Contractor and Subcontractor, and supersedes any
priororalorwrittenagreementsorrepresentations.TheContractDocumentsareincorporatedin this
Agreement by reference, and Subcontractor agrees to bind its subcontractors and suppliers to the
2

ContractDocumentsinsofarastheyrelateinanyway,directlyorindirectly,totheWorkcoveredbythis
Agreement. Where, in the Contract Documents, reference is made to Contractor, and the Work or
specificationsthereinpertaintoSubcontractorstrade,craftortypeofwork,suchworkorspecifications
shallbeinterpretedtoapplytoSubcontractorinsteadoftoDirectContractor.Thepartiesintendthatall
termsofthisAgreementbeconsideredascomplementary.However,intheeventofaconflictbetweenoramong
the terms of this Agreement or the Contract Documents, the higher standard or greater responsibility for
Subcontractorshallprevail.IntheeventofaconflictbetweenthisAgreementortheContractDocumentsontheone
hand,andthelawsapplicabletothisAgreement,theAgreementandtheContractDocumentsshallbeenforceableto
themaximumextentpermittedbyapplicablelaw.

ThisAgreementincludes,withoutlimitation,thefollowingaddenda:

udAddenda.

ThefollowingalternatesareincludedinthisAgreement:

udAltNotes

ThefollowingadditionalprovisionsareincludedinthisAgreement:

udInclusionsNotes

ThefollowingareexcludedfromthisAgreement.

udExclusionsNotes

SECTION2.PAYMENT
(a) DirectContractoragreestopaySubcontractorfortheperformanceofthisAgreement,asspecified,
herein,thesumof:TotalOrigSLProject
subject to additions and deductions for changes agreed upon or determined, as hereinafter
provided.

Bythe22thofeachmonth,SubcontractormustdelivertoDirectContractorsofficeattheProjectan
applicationforpayment,onDirectContractorsapplicationform,Exhibit__hereto.Subcontractors
application should be based upon the Subcontractors Work performed and materials and
equipmentinplaceupthedayjustpriortosubmittaloftheapplicationforpayment,andshouldin
no event forecast billing beyond the 25th of the month. Subcontractor acknowledges that timely
submission of applications for payment is a critical aspect of payment hereunder and is material
consideration on Direct Contractors part in entering into this Agreement. Applications received
afterthe12thofthemonthwillnotbecomedueandpayableuntilthefollowingpayperiod,subject
to all other conditions precedent to payment being satisfied, including those stated in this
AgreementandtheContractDocuments.DirectContractoragreestopaytoSubcontractormonthly
3

progress payments on account of Work actually and satisfactorily completed by Subcontractor, in

sums equal to ___________ percent (___%) of the labor, equipment, services and materials that
have been placed in position, as reflected in Direct Contractor's application for payment and as
approved by Owner. The foregoing percentage shall be ninety percent (90%) unless otherwise
stated under this Agreement or required by applicable law. Payment shall be made from funds
received from Owner within seven (7) days of receipt of such funds paid on account of
Subcontractors Work, provided all other conditions hereof have been satisfied and there are no
groundsforwithholding.

Asaconditiontopayment,Subcontractoragreestoprovidewaiversandreleasesforitselfandits
subcontractors and suppliers regardless of tier, as well as other evidence of payment to such
persons,inaformsatisfactorytoDirectContractor,includingwithoutlimitation,payrollaffidavits,
receipts,vouchersorotherdocumentation,demonstratingthatSubcontractorhaspaidforalllabor,
equipment,materials,services,taxesorotherchargesinanywayrelatingtoSubcontractor'sWork
andobligationsinconnectionwiththeProject.UponcompleteperformanceofthisAgreementby
Subcontractor,andaftertheentireworkrequiredbytheDirectContracthasbeenfullycompletedin
conformity with the Contract Documents and has been delivered to and accepted by the Owner,
Architect,andDirectContractor,DirectContractorwillmakefinalpaymenttoSubcontractorofthe
balanceduehimunderthisAgreementfromfundspaidinfinalpaymentforworkundertheDirect
Contract,byOwner,orotherresponsibleparty,withinseven(7)daysinthecaseofapublicworkof
improvement,andten(10)daysinthecaseofaprivateworkofimprovement,withfundsreceived
by Direct Contractor from Owner in final payment for work under the Direct Contract.
Subcontractor agrees to furnish, if and when required by Direct Contractor, payroll affidavits,
receipts, vouchers, releases of claims for labor, and material, and agrees to furnish same from its
subcontractorsandsuppliersperformingworkorfurnishing materialsunder thisAgreement,allin
formsatisfactorytoDirectContractor,anditisagreedthatnopaymenthereundershallbemade,
exceptatDirectContractorsoption,untilandunlesssuchdocumentshavebeenfurnished.Direct
Contractor,atitsoption,maymakeanypaymentduehereunderbycheckmadepayablejointlyto
Subcontractor and any of its subcontractors and/or suppliers who have performed work or
furnishedmaterialsunderthisAgreement.Anypaymentmadehereunderpriortocompletionand
acceptanceofthework,asreferredtoabove,shallnotbeconstruedasevidenceofacceptanceor
acknowledgementofcompletionofanypartofSubcontractorsWork.

IfOwnerorotherresponsiblepartydelaysinmakinganypaymenttoDirectContractorfromwhich
paymenttoSubcontractoristobemade,DirectContractoranditssuretiesshallhaveareasonable
time to make payment to Subcontractor. Reasonable time shall be determined according to
relevant circumstances, but in no event shall be less than the time Direct Contractor, Direct
Contractorssureties,andSubcontractorrequiretopursuetoconclusiontheirlegalremediesagainst
Ownerorotherresponsiblepartytoobtainpayment,including(butnotlimitedto)mechanicslien
remedies.

To the greatest extent permitted by law, Subcontractor assumes the risk of Owners or Direct
Contractors insolvency or other inability to pay, and understands and agrees that Subcontractor
shallbepaidonlywhenDirectContractorispaidforSubcontractorswork.

(b)PaymentsmadetoSubcontractorshallbedeemedtobeheldintrustforbenefitofDirectContractor
andofallpersonswhofurnishedlabor,equipment,andmaterialsfororonbehalfofSubcontractor,
as well as for the benefit of trust funds and apprenticeship programs owed money in connection
4

with theProject bySubcontractororitslowertiersubcontractors.Inadditiontoanyotherrights

andremediesthatitmayhave,DirectContractorshallbeentitledtopursueaclaimforbreachof
fiduciary duty against Subcontractor in the event that Subcontractor violates its obligations with
respecttofundspaidtoit.Withoutderogationtoanyotherrightsandremedies,DirectContractor
shallbeentitledtosetoffagainstanyamountsowedtoSubcontractoranydebts,claims,demands,
liabilitiesorothersumsowedtoDirectContractorbySubcontractor,includingthosethatarisefrom
otherprojectsorcontractsorthatarecontingentornotyetaccrued.
SECTION3.BONDING
IfrequestedbyDirectContractor,SubcontractorshallfurnishaPerformanceandPaymentBondsinan
amount equal to the full subcontract price. Direct Contractor agrees to pay for the cost of the bond,
provided, however, that Subcontractor shall be responsible for payment of any costs in excess of two
percent of such bond. Such bonds shall be furnished by a Surety satisfactory to Direct Contractor.
Reasonable premiums for such bonds, not to exceed two percent (2%), shall be paid by Direct
ContractoruponreceiptofaninvoicefromtheSurety.

SECTION4.CHANGES

Subcontractor shall make no changes in the Work described in the Contract Documents and this
AgreementexceptasdirectedbyDirectContractorinwriting.Suchchangeorwrittendirectionshallnot
invalidate this Agreement. Direct Contractor is authorized to make changes in the Work, including
deletion,additions,andothermodifications.

Allowanceforextraworkanddeductionsforomissionsshallbebymutualwrittenagreementbetween
Direct Contractor and Subcontractor or determined in accordance with procedures specified in the
DirectContract.TherequestedchangeinSubcontractorspricemustbesubmittedtoDirectContractor
forreviewwithintheearlierofthree(3)workingdaysofthewrittenorder,orwithinsuchtimeasmay
be required for Direct Contractor to provide timely information to the Owner in accordance with the
requirementsoftheDirectContract.Failuretoprovidesuchpricingwithinthetimespecifiedshallresult
inawaiverofclaimsandinnonpayment.DirectContractorshallnotbeheldliabletoSubcontractorfor
anyextralabor,materials,orequipmentfurnishedwithoutsuchwrittenorder.

If necessary, the Contract Price and the time for Subcontractors performance shall be adjusted by
appropriate additions or deductions mutually agreed upon before the Subcontractor performs the
changed work. Subcontractor shall supply Direct Contractor with all documentation necessary to
substantiatetheamountoftheadditiontoordeductionfromthepriceortime.IfDirectContractorand
Subcontractorcannotagreeontheamountoftheadditionordeletion,Subcontractorshallnonetheless
timely perform the Work as changed by Direct Contractors written direction. Once Subcontractor
receives Direct Contractors written direction, Subcontractor is solely responsible for timely
performanceoftheWorkaschangedbythewrittendirection.

PaymentforchangedWorkshallbemadeinaccordancewithSection2.

IfSubcontractormakesanychangesintheWorkdescribedinSection1withoutwrittendirectionfrom
Direct Contractor, such change constitutes an agreement by Subcontractor that it will not be paid for
thatchangedWork,evenifitreceivedverbaldirectionfromDirectContractororanyformofdirection,
written or otherwise, from Owner or any other person or entity. In addition, Subcontractor shall be
5

liableforanyandalllosses,costs,expenses,andliabilityofanynaturewhatsoeverassociatedwithorin
anywayarisingoutofanysuchchangeitmakeswithoutwrittendirectionfromDirectContractor.Ifa
disputearisesbetweenDirectContractorandSubcontractoraboutwhetherparticularWorkisachange
in the Work described in Section 1, Subcontractor shall timely perform the disputed Work. If
Subcontractor intends to submit a claim for the disputed Work, it shall give prompt written notice to
DirectContractorbeforeproceedingwiththeWork.Inaddition,Subcontractorshallsubmititswritten
claim for additional compensation for that work within ten (10) days after such work is performed in
sufficientdetailforDirectContractortomakeanevaluationofthemeritsoftheclaim.Subcontractors
failuretoeithergivethewrittennoticebeforeproceedingwiththeWorkortosubmitthewrittenclaim
withintheten(10)daysconstitutesanagreementbyitthatitwillnotbepaidforthedisputedWork.

No change, alteration, or modification to or deviation from this Agreement, the Contract Documents,
including the Direct contract, plans, or specifications, whether made in the manner provided in this
sectionornot,shallreleaseorexonerate,inwholeorinpart,anybondoranysuretyonanybondgiven
in connection with this Agreement, and no notice is required to be given to such surety of any such
change,alteration,modification,ordeviation.

DailytagsmustbesubmittedtoandsignedbyDirectContractorforallextraworkonthedaytheextra
workisperformed.Subcontractoragreesthatitsfailuretodososhallresultinandconstitutesawaiver
ofclaims,andthatnopaymentshallbedueforsuchwork.\

If,inordertoexpeditethecompletionoftheProject,DirectContractordirectsSubcontractortowork
overtime,asecondshift,and/ortoworkSaturdays,Sundaysoronlegalholidays(hereinaftercollectively
referredtoas"overtime"),forreasonsotherthanSubcontractor'sfailuretofulfillitsobligationsunder
the Contract Documents, Subcontractor shall work such overtime and it is understood that Direct
Contractor shall pay to Subcontractor only the premium portion (the differential between the actual
rateandregularrate)oftheovertime.Timeslipscoveringovertimemustbereviewedinwritingand
signed daily by Direct Contractor as a condition precedent to payment by Direct Contractor to
Subcontractor for such work. Direct Contractor's review and signature on such time slips shall be an
acknowledgement of hours worked, but shall not be an acknowledgement that the Subcontractor is
entitled to be paid for overtime premium. No overhead or profit is to be charged by, or allowed to,
Subcontractorforovertime.If,inDirectContractor'ssolediscretion,Subcontractorisbehindschedule
in the Work and/or delays or interferes with the progress of other Work necessary to complete the
Project on schedule, or otherwise fails to fulfill its obligations under the Contract Documents, then, if
directed by Direct Contractor, Subcontractor shall use overtime and/or increase its manpower, as
deemed necessary by Direct Contractor, to expedite the progress of the Work, and the total cost and
expensethereofshallbeborneentirelybySubcontractor.

SECTION5.PROSECUTIONOFTHEWORK

(a)Timeisoftheessence.SubcontractorshallprosecutetheWorkundertakeninapromptanddiligent
manner, in strict accordance with the Direct Contractors directives and Direct Contractors
schedule,revisedifnecessary,astheworkprogresses,including,withoutlimitation,wheneversuch
Work,orpartofit,becomesavailable,oratsuchothertime(s)asDirectContractormaydirect,and
soastopromotethegeneralprogressoftheentireconstruction,andshallnotbydelayorotherwise
interfere with or hinder the work of Direct Contractor or any other subcontractor. Subcontractor
shallcomplywithDirectContractorsschedule,andshouldSubcontractorfailtocompletetheWork
within the time specified in the contract schedule, Subcontractor agrees to reimburse Direct
6

Contractorforanyandallliquidatedoractualdamagesthatmaybeassessedagainstandcollected
fromDirectContractorwhichareattributabletoorcausedbySubcontractor'sfailuretoperformthe
WorkrequiredbythisAgreementwithinthetimefixedorinthemannerprovidedforherein,andin
addition,agreestopaytoDirectContractorsuchotheradditionaldamagesasDirectContractormay
sustainbyreasonofsuchdelaybySubcontractor.Thepaymentofsuchdamagesshallnotrelease
Subcontractor from its obligation to otherwise fully perform this Agreement. Subcontractor shall
coordinatetheWorkcoveredbythisAgreementwiththatofallothercontractors,subcontractors,
and/orsuppliersandofDirectContractor,inamannerthatwillfacilitatetheefficientcompletionof
theentirework.DirectContractorshallhavetherighttodecidethetimeandorderinwhichvarious
portions of the work shall be installed and the relative priority of the Work of Subcontractor and
othersubcontractors,and,ingeneral,allothermatterspertainingtothetimelyandorderlyconduct
of the Work of Subcontractor on the premises. Subcontractor acknowledges that it will have to
perform Work in areas occupied by other forces, and that it will have to perform its Work in a
sequenceormannertoaccommodateandfacilitatetheprogressoftheworkasawhole,ratherthan
in the manner most efficient or desirable for Subcontractor. Subcontractor's price is based upon
Direct Contractor exercising the rights indicated in this Section 5 and upon Subcontractor having
planned to perform its Work under such circumstances. Subcontractor shall meet all milestone
datesassetforthintheContractDocuments,andanyrevisionsthereto.Subcontractorsfailureto
meetmilestonecompletiondatesshallbeamaterialbreachofthisAgreement.

(b) In the event that Subcontractor fails to comply or becomes disabled from complying with the
provisionshereinastocharacterortimeofperformance,andthefailureisnotcorrectedwithintwo
working days after written request by Direct Contractor to Subcontractor, Direct Contractor, by
subcontract or otherwise, may without prejudice to any other right or remedy, take over and
complete the performance of this Agreement at the expense of Subcontractor, or without taking
over the Work, may furnish the necessary materials and/or employ the workmen necessary to
remedy the situation at the expense of Subcontractor. If Direct Contractor takes over the Work
pursuanttothisparagraphitisspecificallyagreedthatDirectContractormaytakepossessionofthe
premisesandofallmaterials,toolsandequipmentofSubcontractoratthesiteforthepurposeof
completingtheWorkcoveredbythisSubcontract.

(c)ItisagreedthattheSubcontractorshallbeconsideredasdisabledfromsocomplyingwhenevera
petition in Bankruptcy or for the appointment of a receiver is filed against him. Upon the
appointmentofareceiverforSubcontractororuponSubcontractormakinganassignmentforthe
benefitofcreditors,orifSubcontractorseeksprotectionundertheBankruptcyCodeorcommitsany
otheractofinsolvency,DirectContractormay,absentanyapplicablelegallimitation,terminatethis
Agreementupongivingtwo(2)workingdayswrittennotice,bycertifiedmailorovernightdelivery
express mail, to Subcontractor and its surety, if any. If an order for relief is entered under the
Bankruptcy Code with respect to Subcontractor, Direct Contractor may terminate this Agreement
upongivingfortyeight(48)hourswrittennotice,bycertifiedorovernightdeliveryexpressmail,to
Subcontractor,itstrustee,anditssurety,ifany,unlessSubcontractor,thesurety,orthetrustee:

i)promptlycuresalldefaultsandprovidesadequateassuranceoffutureperformance;
ii)compensatesDirectContractorforactualpecuniarylossresultingfromsuchdefaults;and
iii)assumestheobligationsofSubcontractorwithinstatutorytimelimits.

IfSubcontractorisnotperforminginaccordancewiththescheduleofworkatthetimeofentering
an order for relief or at any subsequent time, Direct Contractor, while awaiting the decision of
SubcontractororitstrusteetorejectortoacceptthisAgreementandprovideadequateassurance
of its ability to perform hereunder, may avail itself of such remedies under this section as are
reasonably necessary to maintain the schedule or work. Direct Contractor may offset against any
sums due or to become due Subcontractor all costs incurred in pursuing any of the remedies
providedhereunder,including,butnotlimitedto,reasonableoverhead,profitandactualattorneys
feesincurredasaresultofSubcontractorsnonperformance.Subcontractorshallbeliableforthe
payment of any amount by which such expense may exceed the unpaid balance of the Contract
Price.

(d)Subcontractorshallkeep,onthesiteduringtheprogressoftheWork,acompetentsuperintendent
whoshallbetheauthorizedrepresentativeofSubcontractor.Directionsandcommunicationstohim
from Direct Contractor in connection with the Work shall be treated as directions and
communicationstoSubcontractor.

(e) Subcontractor shall keep the premises and surrounding area free from accumulation of waste
materials or rubbish caused by or in any way related to operations performed under this
Agreement. Subcontractor shall provide its own dumpster for the removal of debris. If
Subcontractordoesnotcomplywiththisrequirement,DirectContractor,on24hoursnotice,may
completethecleanupworkandbackchargeSubcontractor.

SECTION6.DELAYS

(a) If Subcontractor is delayed in the prosecution or completion of the Work by the act, neglect or
defaultofOwner,ArchitectorDirectContractor,orifSubcontractorisdelayedwaitingformaterials
requiredbythisContracttobefurnishedbyOwnerorDirectContractor,orbydamagecausedby
fireorothercasualtyforwhichSubcontractorisnotresponsible,orbythecombinedactionofthe
workmen,innowaycausedbyorresultingfromfaultorcollusiononthepartofSubcontractor,orin
theeventof alockoutbyDirectContractor,thenthetimehereinfixedforthecompletionofthe
Work shall be extended the number of days that Subcontractor has thus been delayed, but no
allowance or extension shall be made unless a claim therefore is presented in writing to Direct
Contractor within three business days of the commencement of such delay or two business days
priortothetimethatDirectContractormustgivenoticetoOwner,whicheverissooner,andunder
no circumstances shall the time of completion be extended to a date which will prevent Direct
ContractorfromcompletingtheentireprojectwithinthetimeallowedDirectContractorbyOwner
for such completion. If and only to the extent that Section 7102 of the Public Contract Code
requires as a matter of public policy that subcontractor be compensated for delays: (1) recovery
shall be permitted only for those circumstances recognized under the Contract Documents as
compensable delays; (2) recovery shall only be allowed for those delays that are unreasonable
under the circumstances involved and not within the contemplation of the parties, in light of the
nature of the project, industry custom and practice, and other relevant factors; (3) recovery may
onlybehadforthoseitemsofcostspermittedundertheDirectContract,plusthoseadditionalitems
of costs, if any, that under Section 7102 of the Public Contract Code, requires be paid; (4)
Subcontractor is bound by and must comply with all provisions of the Direct Contract and
Subcontract (and any portions thereof) that are not in conflict with Section 7102, including
provisions concerning notice and certification of claims with respect to compliance with the False
8

ClaimsAct.ForpurposesofSection6,aclaimthatSection7102ofthePublicContractrequiresbe
permitted, where the foregoing conditions have been satisfied, shall be referred to as an
Authorized7102Claim.

(b)Except for an Authorized 7102 Claim, Subcontractors sole remedy for delay, disruption or
suspension shall be an extension of time, and Subcontractor shall not be entitled to recover
additional compensation or damages for delays, disruption or suspension, including without
limitation, claims for any productivity losses, efficiency losses, increased supervisory costs, home
officeoverhead,extendedjobsiteoverhead,disruptioncosts,"rippleeffect"costs,tradestacking,
compression, acceleration, consequential damages, damages of any other type, lost profits, lost
opportunity costs, or similar damages or costs, however denominated, as well as any other
monetaryrelief,foranydelay,disruptionorsuspensionoftheWork(collectively,"ImpactCostsAnd
ConsequentialDamages").ExceptforAuthorized7102Claims,SubcontractorwaivesanyClaimfor
Impact Costs and Consequential Damages. However, in the event Direct Contractor obtains
additional compensation from Owner on account of delays that otherwise would be
noncompensable under this Section 6, Subcontractor shall be entitled to such portion of the
additional compensation so received by Direct Contractor from Owner as is equitable under all of
the circumstances. In the event that Direct Contractor prosecutes a claim against Owner for
additionalcompensationforanydelay,SubcontractorshallcooperatefullywithDirectContractorin
the prosecution thereof and shall pay costs and expenses incurred in connection therewith,
including actual attorneys fees, to the extent that said claim is made by Direct Contractor at the
request of Subcontractor. Nothing in this Section 6 shall be deemed to authorize recovery for
Impact Costs And Consequential Damages or to waive Direct Contractor's right to recovery from
Ownerforsuchdamages.

(c)Noallowanceforanextensionoftime,foranycausewhatever,shallbeclaimedbySubcontractor
unless Subcontractor shall have made written request upon Direct Contractor, for such extension
within two working days after the cause of such extension occurred, or if the Direct Contract
providesforashorterperiod,withinsufficienttimetopermitDirectContractortogivenoticetothe
OwnerwithinthetimeallowedbytheDirectContractforsuchnotice.

(d) No allowance of an extension of time shall, in any event, be made to Subcontractor for delay by
Subcontractor in preparing drawings or in securing approval of the Architect or Engineer thereto
whensuchdrawingsarenotproperlypreparedorwhenSubcontractorbytheexerciseofreasonable
diligenceandjudgmentcouldhaveanticipatedandavoidedthedelay.

SECTION7.COMMUNICATIONS
All communications between Subcontractor and the Architect, Engineer or Owner with respect to the
WorkshallbetransmittedthroughDirectContractor.

SECTION8.INSURANCE

Subcontractor and its lower tier subcontractors and suppliers shall comply with the insurance
requirementsandprovisionsstatedinthisSection8.DirectContractorsdelayorfailuretoenforceina
timelymanneranyoftheprovisionsofthisAgreement,includingwithrespecttoinsurance,shallnotact
asawaiverofanyoftheseprovisionsatalaterdateintheperformanceofthisAgreement.
9


Subcontractor shall, at its expense, procure and maintain insurance on all of its operations, with
companiesacceptabletoDirectContractor,asfollows:

Workers'CompensationandEmployersLiabilityInsurance.WorkersCompensationinsuranceshallbe
provided as required by any applicable law or regulation. Employers Liability insurance shall be
providedinamountsnotlessthan:

$1,000,000eachaccidentforbodilyinjurybyaccident
$1,000,000policylimitforbodilyinjurybydisease
$1,000,000eachemployeeforbodilyinjurybydisease

IfthereisanexposureofinjurytoSubcontractorsemployeesundertheU.S.LongshoremanandHarbor
WorkersCompensationAct,theJonesActorunderlaws,regulations,orstatutesapplicabletomaritime
employees,coverageshallbeincludedforsuchinjuriesorclaims.

A waiver of subrogation endorsement must be obtained and provided, and the following coverages
must be noted on any evidence of insurance: workers' compensation statutory; employers liability;
excessliability(totheextentrequiredbyOwnerortheContractDocuments).Renewalcertificatesshall
beprovidedattheendofthepolicyperiod.

General Liability Insurance. Subcontractor shall carry primary Commercial General Liability insurance
covering all operations by or on behalf of Subcontractor providing insurance for bodily injury and
property damage liability for the limits of liability indicated below and including, but not limited to,
coveragefor:

(1) premisesandoperations;
(2) products and completed operations will be maintained for three years following project
completion;
(3) contractualliabilityinsuringtortobligationsassumedbySubcontractorinthisContract;
(4) broadformpropertydamage(includingcompletedoperations);
(5) explosion, collapse and underground hazards (including subsidence and any other earth
movement);and
(6) personalinjuryliability.

ThelimitsofliabilityshallbenotlessthantheamountsrequiredofSubcontractorundertheContract
Documents,butinnoeventlessthan:

$1,000,000eachoccurrence(combinedsinglelimitforbodilyinjuryandpropertydamage);

$1,000,000forpersonalinjuryliability;

$2,000,000aggregateforproductscompletedoperations;

$2,000,000generalaggregate.

10

ThegeneralaggregatelimitshallapplyseparatelytoSubcontractorsworkunderthisContract.Ifeither
defense costs are included in the General Aggregate limit or if the General Aggregate limit does not
applyseparatelytothisproject,thentherequiredGeneralAggregatelimitistobe$5,000,000.

Direct Contractor, its officers, directors and employees, and Owner shall be named as additional
insureds under the Commercial General Liability policy and Excess Liability policy and such insurance
afforded the additional insureds shall apply as primary insurance. Any other insurance maintained by
DirectContractororOwnershallnotbecalledupontocontributewiththisinsurance.

Coverage for the Direct Contractor, its officers, directors and employees and the Owner as additional
insuredsshallbeprovidedbyanendorsementprovidingcoverageatleastasbroadasAdditionalInsured
(Form B) endorsement form CG 2010 1185 as published by the Insurance Services Office (ISO) (or
equivalent).Coverageforadditionalinsuredsmustincludeallofthecoveragesrequiredunderitems16
above, including products/completed operations coverage for the additional insureds. Additional
insuredendorsementwillbeprovidedforthreeyearsfollowingprojectcompletion.

Subcontractor on behalf of itself and its insurers waives all rights against Direct Contractor and any
construction manager, including subrogation rights, for loss, liability, costs, expense or damage to the
extentsuchlossordamageiscoveredbyinsurance.

Claims Made/Self Insurance Provisions. Subcontractor shall not provide general liability insurance
under any Claims Made General Liability form without the express prior written consent of Direct
Contractor.Anyselfinsuranceprogramprovidingcoverageinexcessof$25,000peroccurrencerequires
thepriorwrittenconsentofDirectContractor.

Automobile Liability Insurance. Subcontractor shall carry automobile liability insurance, including
coverageforallowned,hired,andnonownedautomobiles.Thelimitsofliabilityshallbenotlessthan
$1,000,000combinedsinglelimiteachaccidentforbodilyinjuryandpropertydamage.Coverageshall
notbeprovidedona"modifiedoccurrence"ora"claimsmade"basis.Coverageshallbeprovidedon
Accord (01/95 or later). Direct Contractor, its officers, directors and employees, and Owner shall be
namedasadditionalinsuredsunderthepoliciesrequiredbythisparagraph.

Additional Requirements. All insurance under this provision (including, but not limited to, general
liability, automobile liability, and workers compensation and employers liability insurance, shall be
providedbyaCaliforniaadmittedcarrierwithanA.M.Best'sRatingofAorbetter,financialcapacityVII
or greater (except for State Fund of California for workers compensation coverage). General liability
insurance shall be written on a form at least as broad as ISO occurrence form CG 0001; Automobile
LiabilityInsuranceshallbeprovidedpursuanttoacoverageformatleastasbroadasISOformCA0001.
DirectContractorreservestheright,initssoleandsubjectivediscretion,torejectaninsurerandrequire
Subcontractortoobtainpoliciesfromanotherinsurer.
Certificates of insurance, as evidence of the insurance required by this Contract and including the
requiredadditionalinsuredendorsement(s)shallbefurnishedbySubcontractortoDirectContractor
nolaterthanthirty(30)dayspriortothetimethatSubcontractorfirstperformsanyworkinconnection
with the Project or enters into this Agreement, whichever is earlier. Certificates shall set forth
deductible amounts applicable to each policy and all exclusions or limitations not set forth in ISO
Commercial GeneralLiabilityFormCG 0001.TheDirectContractormayallowdeductibleprovisionsif
Subcontractoriswillingtoincreaseretentionsaccordingly.StandardISOFormCG0001exclusionswill
11

also be allowed. Allowance of any additional exclusions or coverage limiting endorsements is at the
discretion of the Direct Contractor and Subcontractors bid shall be subject to upward adjustment to
compensatefortheexistenceofsuchexclusions.

Subcontractorsinsuranceandadditionalinsuredcoverageshallnotincludethefollowingexclusionsor
provisions: crosssuits and/or crossinsureds exclusion of coverage, mold/water damage/earth
movementexclusions,requirementsbytheinsurerthatsubcontractorsorsuppliersmaintaininsurance
oragreetodefendorindemnifyDirectContractororowner.Subcontractorshallcauseitspoliciestobe
amendedorendorsedtoremoveanysuchexclusions,provisions,orlimitations.

NotationonanAcordformisNOTacceptableasevidenceofcompliancewithrequirements,including
withoutlimitation,requirementswithrespecttoadditionalinsureds,noticeofcancellation,completed
operations,etc.

Regardless of the allowance of exclusions, coverage limitations or deductibles by the Subcontractor,

Subcontractorshallberesponsibleforanydeductibleamountoranylossarisingoutofcoveragedenials
by its insurance carrier(s). Certificates of insurance shall provide that there will be no cancellation or
reductionofcoveragewithoutfirstgivingthirty(30)dayspriorwrittennoticetoDirectContractor.Any
acceptanceofinsurancecertificatesbyDirectContractorshallinnowaylimitorrelieveSubcontractorof
itsdutiesandresponsibilitiesunderthisAgreement,includingthedutytodefend,indemnify,andhold
harmlessOwner.

Subcontractor shall take such steps as are necessary to assure Subcontractors compliance with its
obligations.Shouldanyinsurancepolicylapseorbecancelledduringthecontractperiod,Subcontractor
shall,priortotheeffectiveexpirationorcancellationdate,furnishtheDirectContractorwithevidence
ofrenewalorreplacementofthepolicy.Failuretocontinuouslysatisfyinsurancerequirementsasherein
provided is a material breach of contract. In the event Subcontractor fails to maintain any insurance
coveragerequired,DirectContractormay,butisnotrequiredto,maintainsuchcoverageandchargethe
expensetoSubcontractororterminatethiscontract.

Any acceptance of insurance certificates by Direct Contractor shall in no way limit or relieve
Subcontractor of its duties and responsibilities under this Contract including the duty to indemnify,
defendandholdharmlessDirectContractorandotherpersonsassetforthintheContractDocuments.

No work shall be performed by Subcontractor at the project site until certificates and endorsements
havebeenfurnishedandapproved.Paymentmaybewithheld,attheoptionoftheDirectContractor,
untilrequiredcoveragehasbeenobtained,andcertificatesandendorsementshavebeenfurnished,orif
uponreceiptofacancellationnoticeonapolicy,untilwithdrawalofthenoticeorthereinstatementof
thecancelledpolicy.

Insurance coverage in the minimum amounts set forth herein shall not be construed to relieve the
Subcontractor for liability in excess of such coverage nor shall it preclude the Direct Contractor from
takingsuchotheractionsasisavailabletoitunderanyotherprovisionofthecontractorlaw.Ifhigher
limits or other forms of insurance are required in the Contract Documents, Subcontractor will comply
withsuchrequirements.

Additional insured endorsements shall be obtained and furnished to Direct Contractor up to and
through the end of the limitations periods under Code of Civil Procedure Section 337.15, and shall
12

include all coverage required hereunder, including completed operations coverage. Failure by Direct
Contractortorequestsuchendorsementsortogivenoticeoftheirnothavingbeenfiledshallnotwaive
thisrequirement.

Subcontractorshallnotprovideanyliabilitycoverageunderawastingpolicyorotherformofpolicy
thatreducestheamountofcoverage,inwholeorinpart,byamountsexpendedondefenseofclaims.

Thefollowingadditionalrequirementsshallalsobesatisfied:

(a) Hazardous Materials. If Subcontractor and/or its subcontractors or suppliers, regardless of tier,
performremediationofhazardousmaterialsoriftheiroperationscreateanexposuretohazardous
materials as those terms are defined in federal, state or local law, Subcontractor and its
subcontractors and suppliers must obtain a Contractors Pollution Liability policy with limits not
less than $1,000,000 per occurrence and not less than $2,000,000 aggregate for Bodily Injury,
Personal Injury and Property Damage, naming Direct Contractor as an additional insured. If
Subcontractor or its subcontractors or suppliers haul hazardous material (including, without
limitation, waste), the policy must extend pollution coverage to the transportation of hazardous
materialsorpollutantsbywastehaulingvehicles.IfSubcontractorissubjecttotheMotorCarrier
Act of 1980, the Motor Carrier Act endorsement MCS90 must be obtained and attached to the
policy.

(b)Professional Liability. If Subcontractor (or its subcontractors or suppliers, regardless of tier)

performsanydesign/buildworkorservices,oranyotherservicesofaprofessionalnature,suchas
those requiring an engineering or architectural license, it shall obtain a Professional Liability
InsurancePolicy.Design/buildworkincludes,withoutlimitation,design/buildworkwithrespectto
mechanical, electrical, structural, plumbing and fire sprinkler systems. Professional liability
insurance shall be for a minimum of $1 million, or such greater amount as Direct Contractor may
require.EvidenceofcoverageintheformofaCertificateofInsuranceshallbeprovidedpriortothe
start of the project. Subcontractor shall obtain coverage for a minimum of three years following
completionoftheproject,eitherthroughcontinuedpurchaseofpoliciesforsuchyearsorthrough
purchase of an extended reporting period. If Owner or Direct Contractor elects to purchase a
project design policy, Subcontractors policy shall be endorsed to indicate that Subcontractors
policyshallprovidecoverageoncetheprojectdesignpolicyhasbeenexhausted.

(c) Riggers Liability. Should Subcontractors work involve the moving, lifting, lowering, rigging, or
hoisting of property or equipment, Subcontractor shall carry Riggers Liability Insurance to insure
againstphysicallossordamagetothepropertyorequipment.

(d) Cargo Insurance (Required for Truckers). If Subcontractor provides trucking or similar
transportation services, it shall obtain and maintain all risk coverage including shift of load and
unidentifiedtrailers.Limitshouldbenolessthan$250,000witha$2,500deductible.

(e) Aircraft Liability. If Subcontractor (or its subcontractors or suppliers, regardless of tier) use any
owned,leased,charteredorhiredaircraftofanytypeintheperformanceofthiscontract,theyshall
maintain aircraft liability insurance in an amount of not less than $10,000,000 per occurrence,
includingPassengerLiability.

13

(f) WorkNearRailroads.IfSubcontractor(includinganylowertiersubcontractororsupplier)performs
anyworkorconductsanyoperationswithinfiftyfeetofanyrailroad(includinganylightrail,fixed
rail or other rail system), Subcontractor shall obtain an endorsement of its Commercial General
Liability Policy to delete any exclusion, including the Contractual Liability exclusion, for work
performedwithinfiftyfeetofarailroad.A copyofsuchendorsementshall beprovided toDirect
Contractor prior to any work or operations by Subcontractor within fifty feet of any railroad. In
addition, if required by any railroad, the Owner, or the Contract Documents, or any permit or
license, Subcontractor shall obtain an endorsement adding the railroad owner or other parties as
additionalinsureds.

(g) EquipmentandPropertyCoverage.Subcontractorshallprocureandmaintainatitsownexpense
property and equipment insurance for Subcontractors tools, equipment, temporary structures,
work in progress, work in transit and/or in temporary storage, as well as those of its lower tier
subcontractors and suppliers. If builders risk insurance is not provided by Owner or Direct
Contractor,Subcontractorshallpurchaseandmaintaininstallationfloatercoveragewrittentocover
all risks of physical loss except those specifically excluded in the policy, and shall insure at least
againsttheperilsoffireandextendedcoverage,theft,vandalism,maliciousmischief,andcollapse.
ThisinsuranceshallbewritteninanamounttoprovidefullprotectionforSubcontractorsworkand
equipment.Thisinsuranceshallapplyonareplacementcostbasis.Anydeductibleshallbethefull
responsibility of Subcontractor. If builder's risk insurance purchased by Owner(s) or Direct
Contractor provides coverage for Subcontractor for loss or damage to Subcontractors work,
Subcontractorshallberesponsiblefortheinsurancepolicydeductibleamountapplicabletodamage
toSubcontractor'sworkand/ordamagetootherworkcausedbySubcontractor.

(h) Waiver of Subrogation. Subcontractor waives all rights against Direct Contractor and any
constructionmanagerforloss,liability,costs,expenseordamagetotheextentreimbursedbyany
insurance applicable to the work, except such rights as they may have to the proceeds of such
insurance.IfanyapplicablepoliciesofinsurancereferredtointhisSectionrequireanendorsement
orconsentoftheinsurancecompanytoprovideforcontinuedcoveragewherethereisawaiverof
subrogation,theownersofsuchpolicieswillcausethemtobesoendorsedorobtainsuchconsent.

(i) RequirementsforSubsubcontractors,Vendors,andSuppliers.Subcontractorshallensurethatall
tiersofitssubcontractors,vendorsandsuppliersshallmaintaininsuranceinlikeformandamounts,
shallcomplywiththeadditionalinsuredrequirementsassetforthabove,shallwaivesubrogationas
set forth above, shall otherwise comply with all requirements of this Section 8, and shall provide
DirectContractorwithevidenceofinsurancepriortocommencingwork.
SECTION9.INDEMNIFICATIONANDDEFENSEOBLIGATIONS

To the greatest extent permitted by law, Subcontractor shall defend, indemnify and hold harmless
Direct Contractor, Owner, and Owners architect and engineer, and any of their respective directors,
officers,agents,employees,parents,affiliates,subsidiaries,partners,andrepresentatives,andanyother
persons or entities designated by any of them (collectively, the "Indemnitees") from and against all
causesofaction,penalties,assessments,fines,actionsbygovernmentalauthorities,demands,liabilities,
claims, damages, costs, losses and expenses, including but not limited to attorney's fees, consultant
fees,andotherlegalcosts("Claims"),whichariseoutoforareinanywayrelated(i)tothisAgreement;
(ii) to actual or alleged actions or omissions by Subcontractor or any of its subcontractors, suppliers,
vendors, employees, or persons for whom it is responsible, or (iii) Subcontractors presence at the
14

Projectsiteand/oritsWork.Notwithstandingtheforegoing,ifanyoftheContractDocumentsimpose
morestringentdefense,indemnity,contributionorholdharmlessobligationsthanaresetforthherein,
then the more stringent provisions shall apply, and Subcontractor shall owe the same defense,
indemnity,contribution,andholdharmlessobligationstoDirectContractorasDirectContractorowesto
Owner.SubcontractorsdutytodefendIndemniteesshallapply,andSubcontractorshallberequiredto
furnishadefense,notwithstandingthattherehasnotyetbeenadetermination,adjudicationorfinding
ofliabilityorfaultonthepartofSubcontractororanypartyorpersontobeindemnified.

To the greatest extent permitted by law, the obligations of this Section 9 shall apply regardless of
whether the Claims were caused in part or contributed to by Indemnitees; however, obligations
specified above shall not extend to: (a) Claims that arise out of, pertain to, relate to the active
negligence or willful misconduct of Direct Contractor, of a subcontractor to Direct Contractor, a
construction manager who is an Indemnitee, or any of their other agents, other servants, or other
independent contractors who are responsible to them (b) to defects in design furnished by the
Indemnitee,or(c)totheextentClaimsdonotariseoutofthescopeofworkofSubcontractor.Items(a)
through(c)intheprecedingsentenceshallbereferredtointhisprovisionas"IndemnityLimitations."
UponwrittentenderbyanyIndemnitee,includingDirectContractor,ofaClaim,Subcontractorshall:

Defendtheclaimwithcounselofitschoice,whoisreasonablyqualifiedandexperiencedinsuchmatters
and does not have a conflict of interest in representing the tendering party, and Subcontractor shall
maintain control of the defense for any claim or portion of claim to which the defense obligation
applies. If Subcontractor elects to defend under this subparagraph (a), Subcontractor shall provide
writtennoticeoftheelectiontothetenderingpartyareasonabletimeperiodfollowingreceiptofthe
writtentender,andinnoeventlaterthan30daysfollowingthatreceipt.Subjectonlytothelimitations
setforthabove,thedefenseprovidedbySubcontractorshallbeacompletedefenseoftenderingparty
of all Claims or portions thereof to the extent alleged to be caused by Subcontractor, including any
vicarious liability claims the tendering party resulting from Subcontractor's scope of work, but not
includingclaimsresultingfromthescopeofwork,actions,oromissionsofthetenderingparty,orany
otherparty.AnyvicariousliabilityimposeduponthetenderingpartyforClaimscausedbySubcontractor
electing to defend under this paragraph shall be directly enforceable against Subcontractor.
Subcontractor shall promptly provide the tendering party with all information, documentation, or
evidence, if any, relating to any assertion by Subcontractor that another party is responsible for the
tenderedClaim.

Pay, within 30 days of receipt of an invoice from the tendering party, no more than a reasonable
allocated share of the tendering party's defense fees and costs, on an ongoing basis during the
pendency of the claim, subject to reallocation consistent with the limitations set forth above, and
includinganyamountsreallocateduponfinalresolutionofClaim,eitherbysettlementorjudgment.The
tenderingpartyshallallocateasharetoitselftotheextentaClaimisallegedtobecausedbyitswork,
actions, or omissions, and a share to each subcontractor to the extent that the Claim is alleged to be
caused by Subcontractor's work, actions, or omissions, regardless of whether the party seeking a
defensefromSubcontractoractuallytenderstheclaimtoanyparticularsubcontractor,andregardlessof
whether that Subcontractor is participating in the defense. Any amounts not collected from any
particularsubcontractormaynotbecollectedfromanyothersubcontractor.

Notwithstandinganyotherprovisionoflaw,ifSubcontractorfailstimelyandadequatelytoperformits
obligationsundersubparagraph(a),thepartytenderingtheClaimshallhavetherighttorecoverfrom
Subcontractorforanyresultingcompensatorydamages,consequentialdamages,reasonableattorney's
15

fees,consultantfees,andotherlegalcosts.IfSubcontractorfailstotimelyperformitsobligationsunder
subparagraph(b),thepartytenderingtheClaimshallhavetherighttorecoverfromSubcontractorfor
anyresultingcompensatorydamages,interestondefenseandindemnitycosts,fromthedateincurred,
at the rate set forth in subdivision (g) of former Civil Code Section 3260 (now recodified at Civil Code
Section 8818), consequential damages, and reasonable attorney's fees incurred to recover these
amounts.ThepartytenderingtheClaimshallbeartheburdenofprooftoestablishbothSubcontractors
failuretoperformundereithersubparagraph(a)or(b),andanyresultingdamages.Inadditiontothe
foregoing remedies, and without limitation or derogation of them, Subcontractor agrees to pay
liquidateddamagesof$100pereachdaythatSubcontractorfailstoperformitsobligationsundereither
subparagraph(a)or(b),whichareintendedtocompensatethetenderingpartyforlossofreputation,
administrative costs, and other losses that are difficult to quantify and that are not adequately
compensatedunderthisprovisionandSection2782.05oftheCivilCode.Subcontractoragreesthatthe
sumof$100perdayconstitutesareasonableestimateofsuchdamagesorlosses.

TheobligationsunderthisSection9areinnowaylimitedorrelievedbySubcontractorhavingobtained
insurance, by the Insurance or other provisions of this Agreement, and/or to the extent permitted by
law,bytheprovisionsofanyworkerscompensationlaw,regulationorarrangement.Theobligationsof
Section 9 shall survive the expiration or termination of this Agreement, as well as Subcontractor's
completionofitsotherobligations.

If and only if a claim for defense or indemnity relates to a project that is governed by California Civil
Code Sections 895 et seq. and Direct Contractor is determined to be a Builder for purposes of
California Civil Code Section 2782(d), then as to claims of construction defects (Defect Claims) only,
theforegoingindemnityismodifiedsuchthatSubcontractorisnotobligatedtoindemnifyOwnertothe
extentthatsuchDefectClaimsariseoutof,pertainto,orrelatetothenegligenceoftheOwner,orthe
Ownersotheragents,otherservants,orotherindependentcontractorswhoaredirectlyresponsibleto
Owner,orfordefectsindesignfurnishedbythosepersons,ortotheextenttheDefectClaimsdonot
arise out of, pertain to, or relate to the scope of work covered by this Agreement; however,
Subcontractor shall nevertheless be obligated to defend Owner and Direct Contractor from any such
Defect Claims, within five (5) days of obtaining knowledge of any such Defect Claims, subject to
reallocation after final resolution of the claims pursuant to Civil Code Section 2782(d). Indemnity and
defenseobligationsnotaffectedorrestrictedbyCivilCodeSection2782(d)or(e),suchasforproperty
damagenot causedby constructiondefectsorothermattersnotinvolvingDefectClaims,shallnotbe
limited, impaired or modified by the foregoing sentence, and such indemnity and defense obligations
shallremaininfullforceandeffect.
SECTION10.LIENSANDCLAIMS
Subcontractorshall,asandwhenrequested,furnishevidencesatisfactorytoDirectContractorandthe
OwnerthatclaimsforlaborandmaterialsfurnishedbySubcontractorinconnectionwithperformance
ofthisSubcontracthavebeenpaid,includingpayrolltaxesandemployeebenefits.Subcontractorshall
furnishDirectContractor releasesofbondrightsandlienrights bypersonswhohavefurnishedlabor,
materialsorotherthingsintheperformanceofthisSubcontract,itbeingagreedthatpaymentofmoney
otherwisedueSubcontractorneednotbemadebyDirectContractoruntilsuchreleasesarefurnished.
Subcontractor shall take all necessary steps to ensure that no claims, liens, lawsuits, stop payment
notices, or other liens are asserted in connection with the Project by any of its subcontractors or
suppliers (regardless of tier), its or their employees, trust funds, taxing authorities or other creditors,
andpursuanttothedutiessetforthhereinshallfullydefend,holdharmlessandindemnifyOwnerand
16

Direct Contractor against all such claims at Subcontractors sole expense. At Subcontractors sole
expense,uponDirectContractorsrequest,Subcontractorshallwithinareasonableperiodnottoexceed
five(5)calendardays,bondaroundanystoppaymentnoticesorliens,sothatthejobandanyfunding
therefor shall remain free from encumbrances and liens, and Subcontractor shall take such other and
further steps as may be necessary to remove the effect of any liens, stop payment notices or claims
fromtheProjectoranyfundsfortheProject.

SECTION11.DEFAULT

(a) IfSubcontractorfailstosupplysufficient qualified workersand/orpropermaterials,orfailsto

prosecuteitsworkdiligentlyandproperly,orfailstomakepromptpaymenttoitsworkers,sub
subcontractorsorsuppliers,orbecomesdelinquentwithrespecttocontributionsorpayments
toanybenefit,apprenticeshiporotheremployeeprogramortrust,orfailstoprovideadequate
assurances,orisotherwiseguiltyofamaterialbreachofaprovisionofthisAgreementorthe
law, and fails within fortyeight (48) hours after receipt of written notice to commence and
continuesatisfactorycorrectionofsuchdefaultwithdiligenceandpromptness,andtocomplete
thecureofsuchdefaultwithinthetimeperiodstatedinDirectContractor'sdefaultnotice,then
DirectContractor,withoutprejudicetoanyrightsorremedies,shallhavetherighttoanyorall
ofthefollowingremedies:

i.

supplysuchworkersandquantityofmaterials,equipmentandotherfacilitiesasDirect
ContractordeemsnecessarytocompleteSubcontractorswork;

ii.

contractwithothercontractorstoperformsuchpartofSubcontractorsworkasDirect
Contractorshalldeemappropriate;

iii.

terminateSubcontractorsrighttoperformanduseanymaterials,equipment,ortools
furnishedbyorbelongingtoSubcontractorworkwithoutanyfurthercompensationto
Subcontractorforsuchuse;and

iv.

withhold payment of any monies due Subcontractor pending corrective action;

provided, however, that Direct Contractor may withhold payment without giving such
noticetothegreatestextentpermittedbylaw.

Insuchanevent,DirectContractorshallbeentitledtorecoverfromSubcontractor,backcharge
againstSubcontractor,and/orsetoffagainstamountsowedtoSubcontractor,theactualdirect
and indirect costs that Direct Contractor has incurred (including attorneys fees and litigation
costs)plusmarkupoffifteenpercent(15%)foroverheadandtenpercent(10%)forprofit.Inan
emergency, Direct Contractor may proceed as above without notice. In addition to any other
remediesavailable,uponwrittennoticeDirectContractorshallbeentitledtoperformusingits
ownorotherforcesthosecleanupdutiesthatSubcontractorhasfailedtoperform,toremedy
safety deficiencies, or otherwise to remedy Subcontractors failure to have complied with
requirementsofthisAgreementordirectivesbyDirectContractor.Tosecureperformanceby
Subcontractor and the prompt payment of any funds expended by Direct Contractor, Direct
Contractor shall have a lien upon all materials, tools, appliances, and equipment of
SubcontractorattheProjectorusedinconnectionwithSubcontractor'swork.

17

(b) RecourseAgainstDirect Contractor. IfDirectContractorwrongfullyterminatesSubcontractor,

Direct Contractor shall be liable to Subcontractor for the costs Direct Contractor would have
paid if Direct Contractor would have terminated Subcontractor for convenience pursuant to
Section12hereof.Subcontractorexpresslyunderstandsandagreesthatitsremedyhereunder
shallbeexclusive,andexpresslywaivesanyandallotherrightsandremedieswhichitmayhave
whetheratlaworinequity.NothinghereundershallbeconstruedtopreventDirectContractor
fromwithholdingmoniesfromSubcontractorunderotherprovisionsofthisAgreement.
SECTION12.TERMINATIONFORCONVENIENCE.

On written notice, Direct Contractor may terminate all or part of this Agreement or Subcontractors
workforDirectContractorsconvenience.Uponsuchtermination,Subcontractorshallbeentitledto:(1)
the reasonable cost of the work completed in conformity with this Agreement; plus, (2) such other
reasonable costs actually incurred by Subcontractor as are permitted by the Direct Contract and
approved by Owner; plus (3) fifteen percent (15%) of the cost of the work referred to in item (1) for
overheadandprofit.Theforegoingamountsshallbereducedbyareasonableandappropriateamount
ifSubcontractorwouldhavesufferedalossontheProject.Thereshallbedeductedfromtheforegoing
sumstheamountofany payments madetoSubcontractor. Subcontractorshallnotbeentitledtolost
profitsonworknotperformedoranyclaimorclaimoflienagainstDirectContractororOwnerforany
additionalcompensationordamagesintheeventofsuchtermination.Theamountrecoverableundera
convenienceterminationshallnotexceedtheContractPrice.Intheeventthatanyterminationother
than for convenience is later determined to have been without cause or improper, Subcontractor's
remedy shall be to have the termination converted to a termination for convenience, and
Subcontractor's recovery shall be limited in accordance with the terms of this Section 12. Upon any
termination,whetherforcauseorconvenience,DirectContractorshallhavetherighttotakeimmediate
possession of, utilize for any purpose, inspect, and copy any and all of Subcontractor's documents or
information related to the project, and the obligations of Subcontractor and rights and remedies of
Direct Contractor that would continue after substantial completion in the absence of a termination,
including without limitation, Subcontractor's duties with regard to indemnity, payment of creditors,
compliancewithlaws,insurance,warranty,anddefectivework,shallremaininfullforceandeffect.
SECTION13.POSSESSIONPRIORTOCOMPLETION
Whenever it may be useful or necessary for Direct Contractor to do so, Direct Contractor shall be
permittedtooccupyand/oruseanyportionoftheWorkwhichhasbeenpartiallyorfullycompletedby
Subcontractor before final inspection and acceptance thereof by the Owner, but such use and/or
occupation shall not relieve Subcontractor of its guarantee of said Work nor of its obligation to make
goodatitsownexpenseanydefectsinmaterialand/orworkmanshipwhichmayoccurordevelopprior
toContractorsreleasefromresponsibilitytotheOwner.
SECTION14.OTHERCONTRACTS
ItisunderstoodandagreedthattheWorkprovidedforinthisAgreementconstitutesonlyapartofthe
work being performed for the Owner by Direct Contractor and other subcontractors. Subcontractor,
therefore,agreestoperformtheWorkcalledforinthisAgreementinsuchamannerthatSubcontractor
will not injure, damage or delay any work performed by Direct Contractor or other subcontractors or
suppliers, and Subcontractor further agrees to pay or reimburse Direct Contractor for any additional
costs,damageordelaythatmaybecausedtosuchotherworkofDirectContractor,subcontractorsor
suppliers, by Subcontractor or its agents or employees. Subcontractor shall participate in the
18

preparationofcoordinateddrawings,thereviewofexistingdrawings,contractorotherwise,and/orthe
review and/or preparation of other information as may be necessary to specifically note and advise
Direct Contractor of potential conflicts between the work of Subcontractor and that of Direct
Contractor,othersubcontractorsortheOwnersownforces.
SECTION15.LABORCOMPLIANCE
Subcontractorandalllowertiersubcontractorsshallcomplywithandperformallworkcoveredbyany
collective bargaining agreement(s) to which Direct Contractor is a party or which otherwise may be
applicable to the Project, under the terms of said agreement(s) and shall become signatory to the
applicable agreement(s) as a condition of performing work. In addition, Subcontractor and its
subcontractors, suppliers, vendors, and employees shall comply with the terms of any Project Labor
Agreement that may apply to the Project. Should Direct Contractor at its sole discretion establish a
reserved gate system on the Project, Subcontractor agrees that its employees, subcontractors, and
supplierswillusethereservegate(s)designatedforthembyDirectContractor.

Subcontractorherebyexpresslyagreesthatalloftheprovisionsoftheapplicablelaboragreementsare
incorporated into this Agreement as if they were set forth in their entirety. Subcontractor agrees to
comply with all of the terms and conditions of those labor agreements as if it were a party to said
agreementsincludingsignatorystatusifrequired.Subcontractorfurtheragreestopaythewagerates,
maketherequiredtrustfundpaymentsintotherespectivelabortrustfunds,andobservethehoursand
all other terms and conditions set forth in the respective labor agreements. Subcontractor agrees to
comply with the terms and provisions of said agreements setting forth the grievance and arbitration
provisions. Furthermore, Subcontractor agrees to comply with the terms and provisions of said
agreements setting forth the jurisdiction and scope of work therein for resolution of jurisdictional
disputes. In the absence of any such procedure or if such procedure fails to promptly resolve the
jurisdictional dispute, Subcontractor agrees, at its own cost and expense and upon request by Direct
Contractor, to take any and all lawful steps to secure a binding and final determination of said
jurisdictionaldisputebytheNationalLaborRelationsBoard.

Subcontractoracknowledgesthattermsandconditionsofthelaboragreementswiththeunionslisted
belowmayrequirethatSubcontractorcomplywithadditionallaboragreements.Subcontractoragrees
tobindandrequireallofitssubcontractors,regardlessoftier,toagreetoalloftherequirementsunder
thisSection15.

[INSERTUNIONSWITHWHICHGSEHASLABORAGREEMENTS]
SECTION16.COMPLIANCEWITHLAWSANDSAFETYREQUIREMENTS

(a) Subcontractor agrees to fully comply with all Federal, State and local laws, ordinances and
regulations.

(b) Atitssoleexpense,Subcontractorshallinvestigateandcomplywith,andagreestobeboundby,all
applicable laws and regulations, including without limitation, laws regarding licensing of
contractors,theFairLaborStandardsAct,theAmericanswithDisabilityAct,thefederalFamilyand
MedicalLeaveAct,federal,stateandlocalfamilyrightsandmedicalleavelaws,civilrightsandfair
employmentlaws,theCaliforniaLaborCode,Proposition65,lawsconcerningwagesandbenefits
to be paid, and all other construction, environmental, workplace and safety laws. Subcontractor
19

(c)

(d)

(e)

(f)

(g)
(h)

acceptsexclusiveliabilityforcompliancewithsuchlaws,includingtheFederalSocialSecurityAct
withrespecttoitsemployees,salesandusetaxlaws,andanyotherlawsandregulations.

Subcontractorshallalsocomply,atitssoleexpense,withallDBE,MBE,UDBE,WBE,DVBE,LBE,local
hiringandsimilarrequirementspertainingtotheProject.Intheeventofaterminationasaresultof
anymisrepresentationoffactsrelatingtoSubcontractor'sstatusasaDBE,MBE,UDBE,WBE,DVBE,
and/orLBE,Subcontractorshallnotbeentitledtoanycompensationnotalreadypaid.

Subcontractor acknowledges that it has conducted its own independent investigation of the wage
rates to be paid and whether its Work will be subject to prevailing wage requirements or the
requirements of the DavisBacon Act and that it has not relied upon any statements or
representationsbyDirectContractorwithrespecttosuchmatters.Subcontractoragreesthatthe
Subcontract Price shall be deemed to be full compensation for compliance with such laws,
regulations,orrequirements,includingpaymentofallapplicablewagerates,andthatnoadditional
compensationwillbeowedtoSubcontractorintheeventthatSubcontractorisrequiredthereunder
topayhigherwagesorincuradditionalcoststhatSubcontractorcontendsthatitdidnotanticipate.

Uponrequest,SubcontractorshallsubmitcertifiedpayrollrecordstoDirectContractornolaterthan
three(3)workingdaysafterDirectContractor'srequestandfurtheragreestocooperatefullyinany
effort by Direct Contractor to verify compliance with labor laws and regulations, including
requirements under the DavisBacon Act or the California Labor Code. Such cooperation shall
include, without limitation, furnishing copies and originals of records and providing access to
employees or witnesses for interviews and statements. In addition to and without derogation of
anyotherrightsthatDirectContractormayenjoy,DirectContractormaywithholdsufficientfunds
to protect Direct Contractor against any claims related to labor requirements, including without
limitation,requirementsundertheDavisBaconActortheCaliforniaLaborCode.

On all projects subject to state or local prevailing wage requirements, Subcontractor shall comply
withanyapplicableCaliforniaprevailingwagelaws.Withrespecttosuchprojects,theprovisionsof
CaliforniaLaborCodeSections1771,1775,1776,1777.5,1813and1815areattachedasExhibitA
and incorporated herein. On such projects, as a condition precedent to final payment,
Subcontractoragrees,ifrequestedinwritingbyDirectContractor,toprovideanaffidavitsignedby
Subcontractor under penalty of perjury, stating that Subcontractor has paid the specified general
prevailingrateofperdiemwagestoitsemployeesontheprojectandanyamountsdue.

thatcomplieswiththetermsofLaborCodeSection1775(b)(4).

At its sole expense, Subcontractor shall institute and maintain a reasonable and adequate safety
program that fully complies with the law, and shall fully cooperate with and adhere to any safety
program or requirements of Direct Contractor and/or Owner. All personnel of Subcontractor, its
subcontractors, and suppliers shall wear hard hats, safety vests, and any other necessary safety
equipment, while visiting or working at a construction site. Subcontractor shall provide material
datasheetsandothersubmittalsoritemsnecessarytocomplywithapplicablelaws.Subcontractor
agrees to obtain and pay for all permits, licenses and official inspections necessary for proper
completionofitsWork.

(i) If hazardous or toxic substances, of a type of which an employer is required by law to notify its
employees, are being used on the site by Subcontractor, its subcontractors or anyone directly or
20

indirectlyemployedbythem,Subcontractorshall,priortoexposureofanyemployeesonthesiteto
such substance, give written notice of the chemical composition thereof to Direct Contractor in
sufficient detail and time to permit compliance with such laws by Direct Contractor, other
subcontractorsandemployersonthesite.

(j) Subcontractor acknowledges that the EPA and California regulatory authorities have mandated
certain requirements for permits under the National Pollutant Discharge Elimination System
(NPDES), including Storm Water Pollution Prevention Plan (SWPPP) requirements. Subcontractor
has undertaken its own independent and thorough investigation of all such matters, including
without limitation, a thorough review of all requirements under the Contract Documents and/or
thatareimposedbyanypermitsthatapplytotheProject,andSubcontractorwarrantsthatitisnot
relyinguponanystatementsorrepresentationsbyDirectContractororOwnerwithrespecttosuch
matters. Subcontractor agrees, at its sole cost, to conform to any and all requirements of any
environmental, air and water pollution statutes, regulations and measures, and/or permits,
includingNPDESpermits,andSubcontractoralsoshallconformtoanyandallSWPPPrequirements
applicable to the Project, as further set forth in this Agreement and the Contract Documents. For
example, on projects subject to the California Standard Specifications, such as Caltrans projects,
Subcontractor'sattentionisdirectedtoCaliforniaStandardSpecificationsSections13.1.01through
1310.03,"WaterPollution",andSections141.01through14.204,"EnvironmentalStewardship",
and on all projects, to any special provisions or other contract provisions concerning NPDES,
Department ofFish& Game,andotherpermits,airandwater pollutionstatutes,regulations,and
measures, and SWPPP requirements, and Subcontractor at its own cost agrees to comply fully
therewith.

(k) Subcontractorshallcomplywithallprovisionsof"Proposition65"(CaliforniaStateDrinkingWater
Act of 1986, California statutes) which shall include, but not be limited to, posting in a timely
manner of any required notices. Subcontractor shall not use or bring on to the Project any of the
chemicalsorcompoundslistedbytheCaliforniaStateAttorneyGeneralfromtimetotime,including
anychemicalsorcompoundsaddedaftertheeffectivedateofthisAgreementundertheprovisions
of Proposition 65 (the List) without delivering a clear written notice, at the time submittals are
written, to Direct Contractor and Owner informing them of the dates and locations where such
items shall be delivered, used, or stored. Notwithstanding anything to the contrary contained or
indicated herein or in any of the Contract Documents or anywhere else, Subcontractor shall not
incorporateintothework,orallowtobeincorporatedintothework,anyofthelisteditemsonsuch
listwithoutspecificadvancedwrittennoticehavingfirstbeendeliveredtoDirectContractorpriorto
Subcontractorbecomingactuallycontractuallyobligatedtopurchaseortakedeliverythereoffrom
itssuppliers,andthenonlytotheextentDirectContractorgivesclearwrittenapprovaloftheuses
proposed in the notice. The notice shall contain clear descriptions of the type, amount, uses,
locations,andcontentofsuchitemsincorporatedintoorusedinsaidwork.

(l) Subcontractorshallberesponsibleforholdingweeklysafetytoolboxmeetingsasrequiredbylawon
itsowntimeatitsownexpense.Ifrequested,recordsofsuchmeetingsshallbesubmittedtoDirect
Contractor.Failuretoprovidesuchminutesmaybereasonforwithholdingpaymentforthework
performed.

(m) HardhatsandappropriatesafetyclothingandequipmentarerequiredontheProjectsite.

SECTION17.CALTRANSA&BPROJECTS
21


NOTUSED.

SECTION18.PROTECTIONOFTHEWORK

Subcontractor shall effectually secure and protect the Work done hereunder and assumes full
responsibilityandriskofalllossordamagetoitsWork,material,orequipmentuntilfinalacceptanceby
Architect, Owner and Direct Contractor. Subcontractor further agrees to provide such protection as
necessarytoprotecttheWorkandtheworkmenofDirectContractor,Ownerandothersubcontractors
fromitsoperations.

Subcontractorshallbeliableforanylossordamagetoworkinplaceortoanyequipmentandmaterials
onthejobsitecausedbyitoritsagents,employeesorguests.

If Subcontractor installs items provided by others or performs Work in areas to be constructed or

preparedbyothers,Subcontractorshallcarefullyinspectandshallaccept,atthetimeofdeliveryorfirst
access,theitemssoprovidedandtheworkbyothers.Failuretoconductaninspectionortogivenotice
of any discrepancies or problems shall be deemed to constitute acceptance by Subcontractor of the
itemsorworkofothers.LossordamageduetoactsofSubcontractorshallbechargedtoSubcontractor.
Subcontractor is responsible for all damages or losses it causes to others or to work, equipment, or
propertyofothers.

SECTION19.ALTERNATIVEDISPUTERESOLUTION

Any dispute resolution procedure in the Contract Documents shall be deemed incorporated in this
Agreement, and shall apply to any disputes arising hereunder that involve the Direct Contractor or
Owner, including, without limitation, such as pass through claims. Subcontractor shall cooperate in
such procedures and shall participate in them when requested. Any claims not involving the Direct
Contractor or Owner may be resolved, at Direct Contractors sole option, through binding arbitration
administered by a provider to be determined by Direct Contractor, under Judicial Arbitration and
Mediation Service or American Arbitration Association Construction Industry Rules in effect as of the
dateofanyarbitrationdemandmadebyDirectContractor.

Priortothefilingofanylawsuitordemandforarbitration,thepartiesshallmeetinformallytoattempt
toresolvethedisputeand,ifrequestedbyDirectContractor,shallparticipateinnonbindingmediation,
witheachpartytobearitsownfeesandcosts.

The award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in
accordancewithapplicablelawinanycourthavingjurisdiction.

Notwithstanding any dispute, and to the greatest extent permitted by law, Subcontractor agrees to
continue with its performance and maintain the schedule of work pending resolution of any and all
disputes,including disputesregarding paymentorwhetherworkiswithinSubcontractor'sscope.The
foregoingsentenceconstitutesanadvancewaiverbySubcontractor,tothegreatestextentpermittedby
law,ofanyactualorallegedrighttostopwork,rescind,orabandontheProject.

Subcontractor, and its subcontractors and suppliers (regardless of tier), agree upon request by Direct
ContractortojoininandbeboundbyproceedingsinvolvingDirectContractor,includingthoseinvolving
22

Owner or other parties. It shall be the responsibility of Subcontractor to prepare Direct Contractor's
case,totheextenttheproceedingsarerelatedtothisAgreement.

Nothinghereinshallbedeemedtowaiverightsorremediesthatbylawmaynotbewaived.

SECTION20.WAIVEROFATTORNEY'SFEES
Notwithstanding any other provision of this Agreement, the Contract Documents or applicable law,
neitherSubcontractornorDirectContractorshallbepermittedtorecoverattorneysfeesorcostsinany
dispute or litigation and Subcontractor expressly waives the right to recover attorney's fees and costs
fromDirectContractorandfromDirectContractor'ssuretiesexceptwherethesameispermittedtobe
recoveredunderthefirstsentenceofthisSection20.Thiswaiveroftherighttofeesandcosts,tothe
extent permitted by law, shall be effective as to statutory rights such as those afforded by Civil Code
Section 9564 et seq. This provision shall not limit, impair or waive Direct Contractor's rights to be
defendedby,tobeindemnifiedby,tobeheldharmlessby,toreceivecontributionfrom,andtoreceive
the benefits of insurance furnished by Subcontractor or any other persons, with regard to attorney's
fees,expertcostsandotherexpenses.Intheeventthatacourtweretofindthatthisprovisionwould
allowanawardoffeesevenwhentheconditionsunderthefirstsentenceofthisSection20werenot
satisfied, then this Agreement shall be reformed to eliminate and waive any right to fees from either
partyoritssureties,exceptwheresuchawaiverwouldviolatepublicpolicy.
SECTION21.INDEPENDENTCONTRACTOR;TAXES

Subcontractorisanindependentcontractorandshall,atitssolecostandexpense,andwithoutincrease
in the Contract Price, comply with all laws, rules, ordinances and regulations of all governing bodies
having jurisdiction over the work: obtain all necessary permits and licenses therefore, pay all
manufacturerstaxes,salestaxes,usetaxes,processingtaxes,andallfederalandstatetaxes,insurance
and contributions for social security and unemployment which are measured by wages, salaries, or
otherremunerationspaidtoSubcontractorsemployees,whetherleviedunderexistingorsubsequently
enacted laws, rules or regulations. Subcontractor upon request shall furnish evidence satisfactory to
DirectContractorthatanyoralloftheforegoingobligationshavebeenfulfilled.
SECTION22.EQUALOPPORTUNITY/AFFIRMATIVEACTION

(a) If the Direct Contract contains any provision which prohibits discrimination on the basis of race,
color, religion, sex, or national origin, hereinafter referred to as Equal Opportunity, or if any law,
regulation or order has any application thereto and is applicable to this Subcontract, then
Subcontractorherebyagreestocomplywithsuchprovision,law,regulationororder.

(b) Subcontractor hereby acknowledges that Direct Contractor is an Equal Opportunity Employer /
AffirmativeAction,andisboundbytheclausesandconditionsidentifiedinExecutiveorder11246,
as amended by, the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended, 38
USC4212,andSection503oftheRehabilitationActof1973,asamended,andtheirimplementing
regulationsandwhichbythisclauseareincorporatedherein.
SECTION23.ARCHITECTENGINEER
23

The words "Architect or Engineer" as used herein refer to the person appointed by the Owner to
supervisetheworkofDirectContractoronbehalfoftheOwner.
SECTION24.ASSIGNMENT
WithoutfirstgivingwrittennoticeandthenobtainingDirectContractor'swrittenconsent,Subcontractor
shall not assign, hypothecate, transfer or sublet: (1) any portion or part of the work required or the
obligations hereunder; (2) payments to Subcontractor; or (3) any cause of action related to this
Agreement.Subcontractoracknowledgesandstipulatesthatitsperformanceconstitutesauniqueand
personal obligation. Any assignment, hypothecation, transfer, or subletting by Subcontractor without
Direct Contractor's written consent shall be void and invalid, notwithstanding actual or constructive
knowledgebyDirectContractorofthepurportedassignment,hypothecation,transferorsubletting.
SECTION25.PRIORUNDERSTANDINGORREPRESENTATIONS
TheDirectContractorassumesnoresponsibilityforanyunderstandingorrepresentationsmadebyany
of its directors, officers, employees, or agents prior to the execution of this Agreement, unless such
understanding or representations by Direct Contractor are expressly stated in this Agreement. The
terms and conditions of this Agreement shall take precedence over any conflicting conditions or
statements.
SECTION26.ADDITIONALPROVISIONS
Layout:DirectContractorshallestablishprincipalaxislinesandlevels,andSubcontractorshalllayout
andshallbestrictlyresponsiblefortheaccuracyofSubcontractorsWork.Subcontractorshallexercise
prudencesothatactualfinalconditionsanddetailsshallresultinperfectalignmentoffinishedsurfaces.
ProvisionsforInspections:SubcontractoratalltimesshallfurnishtoDirectContractor,Owner,andany
representatives of them, safe and ample facilities for inspecting materials and work at the site of
construction,shops,factories,yardsoranyotherplacesofbusinessofSubcontractor,itssubcontractors
orsuppliers,wherevermaterialsunderthisAgreementmaybeinthecourseofpreparation,processing,
manufacture,paintingortreatment.SubcontractorshallfurnishtoDirectContractor,asoftenasDirect
Contractorrequires,fullreportsoftheprogressoftheWorkatanyplacematerialsmaybeinthecourse
ofconstruction,treatmentormanufacture.Suchreportsshallshowtheprogressofsuchconstruction,
treatment,andmanufactureinsuch detailasmayberequired byDirectContractor,including butnot
limitedto,anyplans,drawings,ordiagramsinthecourseofpreparation.
INWITNESSWHEREOF,thepartiesheretohaveexecutedthisSubcontractbyitsproperofficersorduly
authorizedagents.

CONTRACTORS ARE REQUIRED BY LAW TO BE LICENSED AND REGULATED BY THE CONTRACTORS

STATE LICENSE BOARD, WHICH HAS JURISDICTION TO INVESTIGATE COMPLAINTS AGAINST
CONTRACTORS IF A COMPLAINT REGARDING A PATENT ACT OR OMISSION IS FILED WITHIN FOUR
YEARS OF THE DATE OF THE ALLEGED VIOLATION. A COMPLAINT REGARDING A LATENT ACT OR
OMISSIONPERTAININGTOSTRUCTURALDEFECTSMUSTBEFILEDWITHIN10YEARSOFTHEDATEOF
THEALLEGEDVIOLATION.ANYQUESTIONSCONCERNINGACONTRACTORMAYBEREFERREDTOTHE
REGISTRAR,CONTRACTORSSTATELICENSEBOARD,P.O.BOX26000,SACRAMENTO,CA95826.

DIRECTCONTRACTOR

SUBCONTRACTOR
24


By:_____________________________
Title:_____________________________

G.S.E.CONSTRUCTIONCOMPANY,INC.
DATE:

CONTR.LICENSE401498

By:________________________________
Title:________________________________

FirmName
DATE:
CONTR.LICENSENo.________________

25

EXHIBIT A
Attachment for California Prevailing Wage Projects
Labor Code Sections 1771, 1775, 1776, 1777.5, 1813 and 1815

1771. Except for public works projects of one

thousand dollars ($1,000) or less, not less than the
general prevailing rate of per diem wages for Work of
a similar character in the locality in which the public
Work is performed, and not less than the general
prevailing rate of per diem wages for holiday and
overtime Work fixed as provided in this chapter, shall
be paid to all workers employed on public works.
This section is applicable only to Work performed
under contract, and is not applicable to Work carried
out by a public agency with its own forces. This
section is applicable to contracts let for maintenance
Work.
1775. (a) (1) The contractor and any subcontractor
under the contractor shall, as a penalty to the state or
political subdivision on whose behalf the contract is
made or awarded, forfeit not more than two hundred
dollars ($200) for each calendar day, or portion
thereof, for each Worker paid less than the prevailing
wage rates as determined by the director for the
Work or craft in which the Worker is employed for any
public Work done under the contract by the
contractor or, except as provided in subdivision (b),
by any subcontractor under the contractor.
(2) (A) The amount of the penalty shall be
determined by the Labor Commissioner based on
consideration of both of the following:
(i) Whether the failure of the contractor or
subcontractor to pay the correct rate of per diem
wages was a good faith mistake and, if so, the error
was promptly and voluntarily corrected when brought
to the attention of the contractor or subcontractor.
(ii) Whether the contractor or subcontractor has a
prior record of failing to meet its prevailing wage
obligations.
(B) (i) The penalty may not be less than forty
dollars ($40) for each calendar day, or portion
thereof, for each Worker paid less than the prevailing
wage rate, unless the failure of the contractor or
subcontractor to pay the correct rate of per diem
wages was a good faith mistake and, if so, the error
was promptly and voluntarily corrected when brought
to the attention of the contractor or subcontractor.
(ii) The penalty may not be less than eighty dollars
($80) for each calendar day, or portion thereof, for
each Worker paid less than the prevailing wage rate,

if the contractor or subcontractor has been assessed

penalties within the previous three years for failing to
meet its prevailing wage obligations on a separate
contract, unless those penalties were subsequently
withdrawn or overturned.
(iii) The penalty may not be less than one hundred
twenty dollars ($120) for each calendar day, or
portion thereof, for each Worker paid less than the
prevailing wage rate, if the Labor Commissioner
determines that the violation was willful, as defined in
subdivision (c) of Section 1777.1.
(C) If the amount due under this section is collected
from the contractor or subcontractor, any outstanding
wage claim under Chapter 1 (commencing with
Section 1720) of Part 7 of Division 2 against that
contractor or subcontractor shall be satisfied before
applying that amount to the penalty imposed on that
contractor or subcontractor pursuant to this section.
(D) The determination of the Labor Commissioner
as to the amount of the penalty shall be reviewable
only for abuse of discretion.
(E) The difference between the prevailing wage
rates and the amount paid to each Worker for each
calendar day or portion thereof for which each
Worker was paid less than the prevailing wage rate
shall be paid to each Worker by the contractor or
subcontractor, and the body awarding the contract
shall cause to be inserted in the contract a stipulation
that this section will be complied with.
(b) If a Worker employed by a subcontractor on a
public works project is not paid the general prevailing
rate of per diem wages by the subcontractor, the
prime contractor of the project is not liable for any
penalties under subdivision (a) unless the prime
contractor had knowledge of that failure of the
subcontractor to pay the specified prevailing rate of
wages to those workers or unless the prime
contractor fails to comply with all of the following
requirements:
(1) The contract executed between the contractor
and the subcontractor for the performance of Work
on the public works project shall include a copy of the
provisions of this section and Sections 1771, 1776,
1777.5, 1813, and 1815.
(2) The contractor shall monitor the payment of the
specified general prevailing rate of per diem wages
by the subcontractor to the employees, by periodic

Page 26 of 32
C:\Documents and Settings\phavlicek\Desktop\May 6 2014 GSE Subcontract - CLEAN (00158763) (2).docx


review of the certified payroll records of the
subcontractor.
(3) Upon becoming aware of the failure of the
subcontractor to pay his or her workers the specified
prevailing rate of wages, the contractor shall diligently
take corrective action to halt or rectify the failure,
including, but not limited to, retaining sufficient funds
due the subcontractor for Work performed on the
public works project.
(4) Prior to making final payment to the
subcontractor for Work performed on the public
works project, the contractor shall obtain an affidavit
signed under penalty of perjury from the
subcontractor that the subcontractor has paid the
specified general prevailing rate of per diem wages to
his or her employees on the public works
project and any amounts due pursuant to Section
1813.
(c) The Division of Labor Standards Enforcement
shall notify the contractor on a public works project
within 15 days of the receipt by the Division of Labor
Standards Enforcement of a complaint of the failure
of a subcontractor on that public works project to pay
workers the general prevailing rate of per diem
wages.
1776. (a) Each contractor and subcontractor shall
keep accurate payroll records, showing the name,
address, social security number, work classification,
straight time and overtime hours worked each day
and week, and the actual per diem wages paid to
each journeyman, apprentice, worker, or other
employee employed by him or her in connection with
the public work. Each payroll record shall contain or
be verified by a written declaration that it is made
under penalty of perjury, stating both of the following:
(1) The information contained in the payroll record
is true and correct.
(2) The employer has complied with the
requirements of Sections 1771, 1811, and 1815 for
any work performed by his or her employees on the
public works project.
(b) The payroll records enumerated under
subdivision (a) shall be certified and shall be
available for inspection at all reasonable hours at the
principal office of the contractor on the following
basis:
(1) A certified copy of an employee's payroll record
shall be made available for inspection or furnished to
the employee or his or her authorized representative
on request.
(2) A certified copy of all payroll records
enumerated in subdivision (a) shall be made
available for inspection or furnished upon request to
a representative of the body awarding the contract

and the Division of Labor Standards Enforcement of

the Department of Industrial Relations.
(3) A certified copy of all payroll records
enumerated in subdivision (a) shall be made
available upon request by the public for inspection or
for copies thereof. However, a request by the public
shall be made through either the body awarding the
contract or the Division of Labor Standards
Enforcement. If the requested payroll records have
not been provided pursuant to paragraph (2), the
requesting party shall, prior to being provided the
records, reimburse the costs of preparation by the
contractor, subcontractors, and the entity through
which the request was made. The public may not be
given access to the records at the principal office of
the
contractor.
(c) The certified payroll records shall be on forms
provided by the Division of Labor Standards
Enforcement or shall contain the same information as
the forms provided by the division. The payroll
records may consist of printouts of payroll data that
are maintained as computer records, if the printouts
contain the same information as the forms provided
by the division and the printouts are verified in the
manner specified in subdivision (a).
(d) A contractor or subcontractor shall file a certified
copy of the records enumerated in subdivision (a)
with the entity that requested the records within 10
days after receipt of a written request.
(eExcept as provided in subdivision (f), any copy of
records made available for inspection as copies and
furnished upon request to the public or any public
agency by the awarding body or the Division of Labor
Standards Enforcement shall be marked or
obliterated to prevent disclosure of an individual's
name, address, and social security number. The
name and address of the contractor awarded the
contract or the subcontractor performing the contract
shall not be marked or obliterated. Any copy of
records made available for inspection by, or furnished
to, a multiemployer Taft-Hartley trust fund (29 U.S.C.
Sec. 186(c)(5)) that requests the records for the
purposes of allocating contributions to participants
shall be marked or obliterated only to prevent
disclosure of an individual's full social security
number, but shall provide the last four digits of the
social security number. Any copy of records made
available for inspection by, or furnished to, a joint
labor-management committee established pursuant
to the federal Labor Management Cooperation Act of
1978 (29 U.S.C. Sec. 175a) shall be marked or
obliterated only to prevent disclosure of an
individual's social security number.
(f) (1) Notwithstanding any other provision of law,
agencies that are included in the Joint Enforcement


Strike Force on the Underground Economy
established pursuant to Section 329 of the
Unemployment Insurance Code and other law
enforcement agencies investigating violations of law
shall, upon request, be provided nonredacted copies
of certified payroll records. Any copies of records or
certified payroll made available for inspection and
furnished upon request to the public by an agency
included in the Joint Enforcement Strike Force on the
Underground Economy or to a law enforcement
agency investigating a violation of law shall be
marked or redacted to prevent disclosure of an
individual's name, address, and social security
number.
(2) An employer shall not be liable for damages in a
civil action for any reasonable act or omission taken
in good faith in compliance with this subdivision.
(g) The contractor shall inform the body awarding
the contract of the location of the records enumerated
under subdivision (a), including the street address,
city, and county, and shall, within five working days,
provide a notice of a change of location and address.
(h) The contractor or subcontractor has 10 days in
which to comply subsequent to receipt of a written
notice requesting the records enumerated in
subdivision (a). In the event that the contractor or
subcontractor fails to comply within the 10-day
period, he or she shall, as a penalty to the state or
political subdivision on whose behalf the contract is
made or awarded, forfeit one hundred dollars ($100)
for each calendar day, or portion thereof, for each
worker, until strict compliance is effectuated. Upon
the request of the Division of Labor Standards
Enforcement, these penalties shall be withheld from
progress payments then due. A contractor is not
subject to a penalty assessment pursuant to this
section due to the failure of a subcontractor to comply
with this section.
(i) The body awarding the contract shall cause to
be inserted in the contract stipulations to effectuate
this section.
(j) The director shall adopt rules consistent with the
California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title
1 of the Government Code) and the Information
Practices Act of 1977 (Title 1.8 (commencing with
Section 1798) of Part 4 of Division 3 of the Civil
Code) governing the release of these records,
including the establishment of reasonable fees to be
charged for reproducing copies of records required
by this section.
1777.5 (a) Nothing in this chapter shall prevent the
employment of properly registered apprentices upon
public works.

(b) Every apprentice employed upon public works

shall be paid the prevailing rate of per diem wages for
apprentices in the trade to which he or she is
registered and shall be employed only at the work of
the craft or trade to which he or she is registered.
(c) Only apprentices, as defined in Section 3077, who
are in training under apprenticeship standards that
have been approved by the Chief of the Division of
Apprenticeship Standards and who are parties to
written apprentice agreements under Chapter 4
(commencing with Section 3070) of Division 3 are
eligible to be employed at the apprentice wage rate
on public works. The employment and training of
each apprentice shall be in accordance with either of
the following:
(1) The apprenticeship standards and apprentice
agreements under which he or she is training.
(2) The rules and regulations of the California
Apprenticeship Council.
(d) When the contractor to whom the contract is
awarded by the state or any political subdivision, in
performing any of the work under the contract,
employs workers in any apprenticeable craft or trade,
the contractor shall employ apprentices in at least the
ratio set forth in this section and may apply to any
apprenticeship program in the craft or trade that can
provide apprentices to the site of the public work for a
certificate approving the contractor under the
apprenticeship standards for the employment and
training of apprentices in the area or industry
affected. However, the decision of the apprenticeship
program to approve or deny a certificate shall be
subject to review by the Administrator of
Apprenticeship. The apprenticeship program or
programs, upon approving the contractor, shall
arrange for the dispatch of apprentices to the
contractor. A contractor covered by an apprenticeship
program's standards shall not be required to submit
any additional application in order to include
additional public works contracts under that program.
"Apprenticeable craft or trade," as used in this
section, means a craft or trade determined as an
apprenticeable occupation in accordance with rules
and regulations prescribed by the California
Apprenticeship Council. As used in this section,
"contractor" includes any subcontractor under a
contractor who performs any public works not
excluded by subdivision (o).
(e) Prior to commencing work on a contract for
public works, every contractor shall submit contract
award information to an applicable apprenticeship
program that can supply apprentices to the site of the
public work. The information submitted shall include
an estimate of journeyman hours to be performed
under the contract, the number of apprentices
proposed to be employed, and the approximate dates


the apprentices would be employed. A copy of this
information shall also be submitted to the awarding
body if requested by the awarding body. Within 60
days after concluding work on the contract, each
contractor and subcontractor shall submit to the
awarding body, if requested, and to the
apprenticeship program a verified statement of the
journeyman and apprentice hours performed on the
contract. The information under this subdivision shall
be public. The apprenticeship programs shall retain
this information for 12 months.
(f) The apprenticeship program that can supply
apprentices to the area of the site of the public work
shall ensure equal employment and affirmative action
in apprenticeship for women and minorities.
(g) The ratio of work performed by apprentices to
journeymen employed in a particular craft or trade on
the public work may be no higher than the ratio
stipulated in the apprenticeship standards under
which the apprenticeship program operates where
the contractor agrees to be bound by those
standards, but, except as otherwise provided in this
section, in no case shall the ratio be less than one
hour of apprentice work for every five hours of
journeyman work.
(h) This ratio of apprentice work to journeyman
work shall apply during any day or portion of a day
when any journeyman is employed at the jobsite and
shall be computed on the basis of the hours worked
during the day by journeymen so employed. Any
work performed by a journeyman in excess of eight
hours per day or 40 hours per week shall not be used
to calculate the ratio. The contractor shall employ
apprentices for the number of hours computed as
above before the end of the contract or, in the case of
a subcontractor, before the end of the subcontract.
However, the contractor shall endeavor, to the
greatest extent possible, to employ apprentices
during the same time period that the journeymen in
the same craft or trade are employed at the jobsite.
Where an hourly apprenticeship ratio is not feasible
for a particular craft or trade, the Administrator of
Apprenticeship, upon application of an apprenticeship
program, may order a minimum ratio of not less than
one apprentice for each five journeymen in a craft or
trade classification.
(i) A contractor covered by this section that has
agreed to be covered by an apprenticeship program's
standards upon the issuance of the approval
certificate, or that has been previously approved for
an apprenticeship program in the craft or trade, shall
employ the number of apprentices or the ratio of
apprentices to journeymen stipulated in the
applicable apprenticeship standards, but in no event
less than the 1-to-5 ratio required by subdivision (g).

(j) Upon proper showing by a contractor that he or

she employs apprentices in a particular craft or trade
in the state on all of his or her contracts on an annual
average of not less than one hour of apprentice work
for every five hours of labor performed by
journeymen, the Administrator of Apprenticeship may
grant a certificate exempting the contractor from the
1-to-5 hourly ratio, as set forth in this section for that
craft or trade.
(k) An apprenticeship program has the discretion to
grant to a participating contractor or contractor
association a certificate, which shall be subject to the
approval of the Administrator of Apprenticeship,
exempting the contractor from the 1-to-5 ratio set
forth in this section when it finds that any one of the
following conditions is met:
(1) Unemployment for the previous three-month
period in the area exceeds an average of 15 percent.
(2) The number of apprentices in training in the
area exceeds a ratio of 1 to 5.
(3) There is a showing that the apprenticeable craft
or trade is replacing at least one-thirtieth of its
journeymen annually through apprenticeship training,
either on a statewide basis or on a local basis.
(4) Assignment of an apprentice to any work
performed under a public works contract would
create a condition that would jeopardize his or her life
or the life, safety, or property of fellow employees or
the public at large, or the specific task to which the
apprentice is to be assigned is of a nature that
training cannot be provided by a journeyman.
(l) When an exemption is granted pursuant to
subdivision (k) to an organization that represents
contractors in a specific trade from the 1-to-5 ratio on
a local or statewide basis, the member contractors
shall not be required to submit individual applications
for approval to local joint apprenticeship committees,
if they are already covered by the local
apprenticeship standards.
(m) (1) A contractor to whom a contract is awarded,
who, in performing any of the work under the
contract, employs journeymen or apprentices in any
apprenticeable craft or trade shall contribute to the
California Apprenticeship Council the same amount
that the director determines is the prevailing amount
of apprenticeship training contributions in the area of
the public works site. A contractor may take as a
credit for payments to the council any amounts paid
by the contractor to an approved apprenticeship
program that can supply apprentices to the site of the
public works project. The contractor may add the
amount of the contributions in computing his or her
bid for the contract.
(2) At the conclusion of the 2002-03 fiscal year and
each fiscal year thereafter, the California
Apprenticeship Council shall distribute training


contributions received by the council under this
subdivision, less the expenses of the Department of
Industrial Relations for administering this subdivision,
by making grants to approved apprenticeship
programs for the purpose of training apprentices. The
funds shall be distributed as follows:
(A) If there is an approved multiemployer
apprenticeship program serving the same craft or
trade and geographic area for which the training
contributions were made to the council, a grant to
that program shall be made.
(B) If there are two or more approved
multiemployer apprenticeship programs serving the
same craft or trade and geographic area for which
the training contributions were made to the council,
the grant shall be divided among those programs
based on the number of apprentices registered in
each program.
(C) All training contributions not distributed under
subparagraphs (A) and (B) shall be used to defray
the future expenses of the Department of Industrial
Relations for the administration and enforcement of
apprenticeship standards and requirements under
this code.
(3) All training contributions received pursuant to
this subdivision shall be deposited in the
Apprenticeship Training Contribution Fund, which is
hereby created in the State Treasury. Upon
appropriation by the Legislature, all moneys in the
Apprenticeship Training Contribution Fund shall be
used for the purpose of carrying out this subdivision
and to pay the expenses of the Department of
Industrial Relations.
(n) The body awarding the contract shall cause to
be inserted in the contract stipulations to effectuate
this section. The stipulations shall fix the
responsibility of compliance with this section for all
apprenticeable occupations with the prime contractor.
(o) This section does not apply to contracts of
general contractors or to contracts of specialty
contractors not bidding for work through a general or
prime contractor when the contracts of general
contractors or those specialty contractors involve less
than thirty thousand dollars ($30,000).
(p) An awarding body that implements an approved
labor compliance program in accordance with
subdivision (b) of Section 1771.5 may, with the
approval of the director, assist in the enforcement of
this section under the terms and conditions
prescribed by the director.
1813.

The contractor or subcontractor shall, as a

penalty to the state or political subdivision on whose

behalf the contract is made or awarded, forfeit
twenty-five dollars ($25) for each Worker employed in
the execution of the contract by the respective
contractor or subcontractor for each calendar day
during which the Worker is required or permitted to
Work more than 8 hours in any one calendar day and
40 hours in any one calendar week in violation of the
provisions of this article. In awarding any contract for
public Work, the awarding body shall cause to be
inserted in the contract a stipulation to this effect.
The awarding body shall take cognizance of all
violations of this article committed in the course of the
execution of the contract, and shall report them to the
Division of Labor Standards Enforcement.
1815. Notwithstanding the provisions of Sections
1810 to 1814, inclusive, of this code, and
notwithstanding any stipulation inserted in any
contract pursuant to the requirements of said
sections, work performed by employees of
contractors in excess of 8 hours per day, and 40
hours during any one week, shall be permitted upon
public work upon compensation for all hours worked
in excess of 8 hours per day at not less than 11/2
times the basic rate of pay.

EXHIBITB

DOCUMENTSTOBERETURNEDWITHEXECUTEDSUBCONTRACT

1.CertificatesofLiabilityInsurance

2.CertificatesofWorkersCompensationInsurance

3.CertificatesofCommercialAutoInsurance

4.FederalIDnumberorSocialSecurityNumber.ThisisrequiredunderSection6041AoftheInternalRevenue
Code.SpaceisprovidedintheleftuppercorneroftheSubcontractAgreement.

5.SubmittalsasrequiredbythePlansandSpecifications.PleaseprovideuswithSIXcopiesofeach.

6.BreakdownofyourSubcontractPrice.Thisbreakdownwillserveasthebasisforprogresspayments.

7.SampleofSubcontractorsSafetyToolboxMeetingformtobeusedduringthisproject.Pleasereferto
SECTION16SAFETYoftheSubcontractAgreement.

8.Copyofyourcontractorslicense.

9.PaymentandPerformanceBonds,ifnotwaivedinSection24.

10.CompletedCopyofDASForm140(AttachedtothisSubcontractAgreement)

11.ProofofLocalCityBusinessLicenseifrequiredbytheOwner.