Flowdown Term Agreement

FLOWDOWN TERM AGREEMENT

This Flowdown Term Agreement ("Agreement") is made as of Effective Date: by and between Contractor Name: with principal place of business at Contractor Address: and Subcontractor Name: with principal place of business at Subcontractor Address: .

RECITALS

WHEREAS, Contractor has entered into a Prime Contract identified as Prime Contract Reference: with the Owner or Purchaser (the "Prime Contract") pursuant to which Contractor will procure certain goods and/or services; and

WHEREAS, Contractor desires to engage Subcontractor to perform a portion of the work under the Prime Contract and requires that certain obligations, representations, warranties and provisions of the Prime Contract be flowed down and incorporated into the subcontract relationship; and

WHEREAS, Subcontractor is willing to accept such flowdown obligations and to perform the work in accordance with the terms of this Agreement and the applicable flowdown provisions.

NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the parties agree as follows:

1. DEFINITIONS

1.1 "Prime Contract" means the agreement referenced above and all amendments thereto. Prime Contract effective date: .

1.2 "Flowdown Obligations" means those provisions of the Prime Contract that Contractor requires Subcontractor to observe, perform and comply with as set forth in this Agreement or as otherwise incorporated by reference.

2. FLOWDOWN OF OBLIGATIONS

2.1 Incorporation. To the extent applicable to the Work performed under this Agreement, Subcontractor shall be bound by and shall perform in accordance with those Prime Contract provisions identified by Contractor or listed in the schedule below (collectively, the "Incorporated Provisions"). The Incorporated Provisions are incorporated herein by reference and shall have the same force and effect between Contractor and Subcontractor as if set out in full in this Agreement.

2.2 Applicability. Where a Prime Contract provision imposes obligations on Contractor that, by their nature, are applicable to Subcontractor, Subcontractor shall comply with such obligations. In the event of conflict between this Agreement and the Prime Contract, the Prime Contract shall govern only to the extent required by the Owner; provided, however, that Subcontractor's obligations hereunder shall continue to reflect the intent of the Prime Contract flowdowns.

3. PERFORMANCE; STANDARD OF CARE

Subcontractor shall perform the Work in a professional and workmanlike manner consistent with industry standards and the requirements of the Prime Contract. Subcontractor shall furnish all labor, materials, equipment and supervision necessary to complete the Work and shall be responsible for the acts and omissions of its employees, agents, subcontractors and suppliers.

4. PAYMENT

4.1 Compensation. Contractor shall pay Subcontractor in accordance with the payment schedule and rates set forth in the Subcontract Scope or Purchase Order attached or referenced herein. Progress payments shall be made upon receipt of properly documented invoices and acceptance of Work by Contractor.

4.2 Payment Terms. Payments are due Net days from Contractor's receipt of a correct invoice unless otherwise specified in writing.

5. TERM AND TERMINATION

5.1 Term. This Agreement shall commence on the Effective Date and continue until completion of the Work, unless earlier terminated in accordance with this Agreement.

5.2 Termination for Convenience. Contractor may terminate this Agreement in whole or in part for convenience upon providing written notice to Subcontractor at least days prior to the effective date of termination. In the event of termination for convenience, Subcontractor shall be entitled to recover reasonable costs incurred and profit on work performed to the date of termination, subject to Contractor's mitigation rights.

5.3 Termination for Cause. Either party may terminate this Agreement for material breach by the other party if such breach is not cured within days after written notice specifying the breach.

6. CONFIDENTIALITY

Each party shall keep confidential and shall not disclose any Confidential Information of the other party, except as required to perform obligations under this Agreement or as compelled by law. Confidential Information includes information marked confidential or that a reasonable person would understand to be confidential given the nature and circumstances of disclosure.

7. INDEMNIFICATION

To the fullest extent permitted by law, Subcontractor shall indemnify, defend and hold harmless Contractor, its officers, directors, agents and employees from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from Subcontractor's negligent acts, omissions or willful misconduct in the performance of the Work or from Subcontractor's breach of this Agreement.

8. INSURANCE

Subcontractor shall maintain insurance coverage in types and amounts sufficient to satisfy its obligations under this Agreement and the Prime Contract, including, as applicable, commercial general liability, workers' compensation, automobile liability, professional liability and employer's liability insurance. Evidence of insurance, including additional insured endorsements required by Contractor or the Prime Contract, shall be provided upon request.

9. COMPLIANCE WITH LAWS; SAFETY

Subcontractor shall comply with all applicable statutes, regulations and orders of governmental authorities, including health and safety laws, environmental requirements and labor laws. Subcontractor shall obtain and maintain all permits, licenses and approvals required to perform the Work.

10. RECORDS; AUDIT RIGHTS

Subcontractor shall maintain complete and accurate records relating to performance, costs and invoices for a period of not less than years following final payment. Contractor and the Owner shall have the right to audit such records upon reasonable notice and during normal business hours.

11. REPRESENTATIONS AND WARRANTIES

Subcontractor represents and warrants that it is duly organized and in good standing under the laws of its jurisdiction, has all necessary authority to enter into this Agreement, and that the Work will be free from defects and conform to the requirements of this Agreement and the Prime Contract for a period of months following acceptance unless a longer period is specified in the Prime Contract.

12. ASSIGNMENT

Neither party may assign this Agreement or any rights hereunder without the prior written consent of the other party, except that Contractor may assign this Agreement to an affiliate or successor in interest without Subcontractor's consent to the extent necessary to comply with the Prime Contract or as part of a corporate reorganization, merger or sale of substantially all assets.

13. NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered personally or sent by certified mail, return receipt requested, or by another nationally recognized overnight courier to the addresses set forth below or to such other address as either party may designate by notice.

14. AMENDMENTS; WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless made in writing and signed by authorized representatives of both parties. The failure of either party to enforce any provision of this Agreement shall not constitute a waiver of that provision or of the right to enforce it subsequently.

15. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable under applicable law, such provision shall be struck and the remaining provisions shall remain in full force and effect.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws principles.

17. ENTIRE AGREEMENT

This Agreement, including all documents incorporated by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings and agreements between the parties.

18. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures transmitted by facsimile or electronic image shall be binding as original signatures.

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