Common use of The Construction Contract Clause in Contracts

The Construction Contract. Borrower shall not become a party to any contract in excess of $50,000.00 for the performance of any Work on the Property or for the supplying of any labor, materials, or services for the construction of the Improvements except upon such terms and with such parties as shall be approved in writing by Lender. Lender’s approval of any contractor or contract may be conditioned upon such contractor providing a payment and performance bond for all or part of the work to be undertaken under the contract. Borrower may retain an affiliated construction company to act as general contractor; in such case, all approval rights of Lender and rights to require bonding of Lender shall be for subcontractors and suppliers. The general contractor must agree in writing that all liens of the genera] contractor are subordinate to the lien of the Deed of Trust. The general contractor must agree in writing that no change orders to the Plans for which Lender’s consent is required hereunder, shall be effective without the prior written approval of Lender. No approval by Lender of any Construction Contract or change orders thereto shall make Lender responsible for the adequacy, form, or content of such Construction Contracts or change orders. Upon written request by Lender, Borrower shall supply Lender with a list of all original contractors and all second and subsequent tier contractors and suppliers, and their respective addresses and telephone numbers, and information with respect to the portion of such contracts completed and sums owed to such contractors and suppliers. If requested by Lender, Borrower will cause all subcontractors whose contract prices exceeds ten percent (10%) of the amount of the Approved Budget, as provided in Section 1.15 herein to provide a performance bond and a payment bond of such character, issued by companies; on forms and in such penal sum in connection with the construction of the Improvements, as Lender shall designate. Unless waived by Lender, all such bonds shall name Lender as co-obligee.

The Construction Contract. Borrower shall not become a party to any contract in excess of $50,000.00 for the performance of any Work on the Property or for the supplying of any labor, materials, or services for the construction of the Improvements except upon such terms and with such parties as shall be approved in writing by Lender. Lender’s approval of any contractor or contract may be conditioned upon such contractor providing a payment and performance bond for all or part of the work to be undertaken under the contract. Borrower may retain an affiliated construction company to act as general contractor; in such case, all approval rights of Lender and rights to require bonding of Lender shall be for subcontractors and suppliers. The general contractor must agree in writing that all liens of the genera] general contractor are subordinate to the lien of the Deed of Trust. The general contractor must agree in writing that no change orders to the Plans for which Lender’s consent is required hereunder, shall be effective without the prior written approval of Lender. No approval by Lender of any Construction Contract or change orders thereto shall make Lender responsible for the adequacy, form, or content of such Construction Contracts or change orders. Upon written request by Lender, Borrower shall supply Lender with a list of all original contractors and all second and subsequent tier contractors and suppliers, and their respective addresses and telephone numbers, and information with respect to the portion of such contracts completed and sums owed to such contractors and suppliers. If requested by Lender, Borrower will cause all subcontractors whose contract prices exceeds ten percent (10%) of the amount of the Approved Budget, as provided in Section 1.15 herein to provide a performance bond and a payment bond of such character, issued by companies; , on forms and in such penal sum in connection with the construction of the Improvements, as Lender shall designate. Unless waived by Lender, all such bonds shall name Lender as co-obligee.