CONFIDENTIAL
 

Appendix 2 – Proposal Terms and Conditions
 

Proposal Terms and Conditions
 

1. Definitions:

1.1. “Agreement” means, collectively:
(a) these terms and conditions;
(b) the accepted Proposal; and
(c) the Order.
 

1.2. “Customer” means the party for which the Work is being provided. For clarity, the Customer may be the Owner, the Owner’s general contractor, or the Project mechanical contractor.
 

1.3. “Darcy” means Darcy Solutions, Inc.
 

1.4. “Installer” means one or more installation subcontractors engaged by Darcy to install all or part of the System at the Owner’s property.
 

1.5. “Owner” means the owner of the property at which the Work is being performed and on which the System is being installed.
 

1.6. “Project” means the System installation project, including all Work related thereto.
 

1.7. “Product” means the equipment provided by Darcy and installed by Installer as part of the System.
 

1.8. “Proposal” means the proposal provided by Representative to Customer with respect to a Project, to which these terms and conditions are attached.
 

1.9. “Representative” means Darcy’s manufacturer’s representative (Midwest Mechanical Solutions, LLC).
 

1.10. “Services” means drilling of a test bore or well, design of the closed loop, drilling of permanent wells, installation of equipment and connection of wells to the closed loop, and any ancillary services related to the foregoing.
 

1.11. “System” means, collectively, the wells, groundwater heat exchangers, submersible pumps, the exterior closed loop and related equipment.
 

1.12. “Work” means the supply of the Products and the performance of the Services.
 

2. Acceptance Agreement:
 

These terms and conditions are incorporated into and form an integral part of the Agreement with respect to a Project resulting from the acceptance of the Proposal by Customer.
 

2.1. The Proposal is subject to acceptance in writing by Customer, delivered to Representative within 30 days from the date of the Proposal. To the extent that acceptance of the Proposal requires the consent of Owner (or, if applicable, Owner’s general contractor), Customer, by acceptance of the Proposal, represents and warrants to Representative that such consent has been obtained.
 

2.2. If Customer accepts the Proposal by placing an order, without the addition of any other terms and conditions of sale or any other modification, Customer’s order shall be deemed an acceptance of the Proposal subject to these terms and conditions.
 

2.3. Representative hereby gives notice of its objection to any different or additional terms and/or conditions. If Customer’s order is expressly conditioned upon Representative’s acceptance or assent to terms and/or conditions other than those expressed herein, return of such order by Representative with these terms and conditions attached or referenced serves as Representative’s notice of objection to Customer’s terms and as Representative’s counteroffer to provide the Work in accordance with the Representative Proposal and these terms and conditions. If Customer does not reject or object in writing to Representative within 10 days after delivery of Representative’s counteroffer, the counteroffer will be deemed accepted. Customer’s acceptance of the Work will in any event constitute an acceptance by Customer of these terms and conditions.
 

2.4. A Proposal accepted by any means set forth in this Section 2 is referred to herein as an “Order.”
 

3. Pricing and Taxes:

All prices stated in the Proposal specifically override any prices referenced in any Order issued by Customer.
 

3.1. Prices are in U.S. dollars and shall include sales tax, but do not include shipping/delivery fees, insurance, or any use, excise or other taxes, duties, fees, or assessments imposed by any jurisdiction unless specifically stated otherwise in the Proposal. Prices of Products sold on an uninstalled basis and any taxable labor do not include sales tax and taxes will be added.
 

3.2. Representative shall charge Customer additional costs for bonds agreed to be provided by Representative [or Darcy].
 

3.3. Pricing provided to Customer shall be good for 30 calendar days from the date of the Proposal and may be modified by Representative if the Proposal is not accepted prior to the expiration of the 30-day period.
 

3.4. Following acceptance of the Proposal, without addition of any other terms and conditions of sale or any other modification by Customer, prices stated are firm provided that the Work is commenced not later than 3 months from the date of acceptance or deemed acceptance (the “Order Receipt Date”). If the Work is commenced later than 3 months from the Order Receipt Date, prices will be increased by not less than a straight 1% (not compounded) for each one-month period (or part thereof) beyond the 3-month firm price period or increased by any price increase received from Installer and/or Darcy’s suppliers during this period. If the Work is not commenced within 6 months after Order Receipt Date, prices are subject to renegotiation, or at Representative’s option, the Order will be cancelled.
 

3.5. Once the Work is commenced, any delay in the Work caused by Customer’s actions (or the actions of Owner or, if applicable, its general contractor) will subject prices to increase equal to the percentage increase in applicable prices during that period of delay, and Representative may charge Owner with incurred storage fees for Products.
 

4. Payment:

Customer shall pay Representative’s invoices within 30 days of invoice date. Representative may invoice Customer for all equipment or material furnished, whether delivered to the installation site or to an off-site storage facility, and for all Work performed on-site or off-site.
 

4.1. A specific payment schedule for any particular Project may be described in the Proposal for that Project. If there is no specific payment schedule, then the following standard payment schedule applies, listed as a percentage of the Project price.
 

Invoice 1:
30% payment at time of Proposal acceptance
(at this stage of the Project, 1/3 of this payment represents a non-refundable down payment)

Invoice 2:
50% payment after drilling and lateral lines completed

Invoice 3:
10% payment after heat exchanger installed

Invoice 4:
10% payment after start-up, plus hourly start-up labor

Invoice 5:
Hourly commissioning labor
 

4.2. No retention shall be withheld from any payments except as expressly agreed in writing by Representative, in which case retention shall be released no later than the date of Substantial Completion. Under no circumstances shall any retention be withheld for Products included with the Order.
 

4.3. If payment is not received as required, Representative may suspend performance, and the time for completion shall be extended for a reasonable period of time not less than the period of suspension. Customer shall be liable to Representative for all reasonable shutdown, standby, and start-up costs that result from the suspension.
 

4.4. Amounts not paid when due shall be subject to an interest rate of 1.5% per month or, if less, the maximum rate permitted by law. Customer shall pay all costs (including attorneys’ fees) incurred by Representative in attempting to collect amounts due and otherwise enforcing these terms and conditions.
 

4.5. If requested, Representative will provide appropriate lien waivers upon receipt of payment.
 

4.6. Unless Customer makes payment in advance, Customer hereby grants to Representative a security interest in all Products supplied by Representative to secure payment in full of all amounts due to Representative.

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