Waterfall Construction Contract

WATERFALL CONSTRUCTION CONTRACT

This Waterfall Construction Contract (the Contract) is made as of by and between Owner: with principal place of business at ("Owner"), and Contractor: with principal place of business at ("Contractor").

Recitals

WHEREAS, Owner desires to engage Contractor to perform construction work at the project commonly known as (the Project) in accordance with the Scope of Work and the waterfall payment allocation set forth herein;

WHEREAS, Contractor represents that it is duly licensed, experienced and equipped to perform the Project and will perform all work in a good and workmanlike manner; and

WHEREAS, the parties desire to set forth their respective rights and obligations, including a waterfall payment structure that allocates incoming funds sequentially to designated uses, priorities, and retainage.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Definitions

1.1 "Contract Price" means the total sum payable to Contractor under this Contract as adjusted by Change Orders:

1.2 "Waterfall Schedule" means the priority sequence by which funds received from Owner or other sources shall be applied to categories of cost, including but not limited to mobilization, labor, materials, subcontractor payments, retainage, overhead and profit, as established in Section 3.

2. Scope of Work

Contractor shall perform all labor, furnish all materials, equipment and supervision necessary to complete the Project in accordance with the Scope of Work attached or described below. Contractor shall perform in accordance with industry standards and all applicable laws, codes and regulations.

3. Contract Price and Waterfall Payment Schedule

3.1 Contract Price. Owner shall pay Contractor the Contract Price set forth above, subject to additions and deductions for Change Orders in accordance with Section 4.

3.2 Waterfall Allocation. All payments received by Contractor for the Project shall be applied in the following priority order (highest priority first) until satisfied in full:

Milestone 1 — Description:

Milestone 2 — Description:

Milestone 3 — Description:

4. Change Orders

4.1 No alteration to the Scope of Work, Contract Price or Time for Completion shall be effective unless reduced to writing and signed by Owner and Contractor as a Change Order. Change Orders shall specify adjustments to both price and time, and shall state the basis for the adjustment.

4.2 Emergency work required to avoid threat to life or property may be performed without prior written Change Order; Contractor shall promptly notify Owner and prepare a written Change Order for any adjustments.

5. Time for Completion; Delays

5.1 Contractor shall commence work upon receipt of a written Notice to Proceed and shall achieve substantial completion by . Time is of the essence.

5.2 Contractor shall be entitled to time extensions for delays caused by Owner, utility companies, acts of God, or other excusable causes beyond Contractor's reasonable control, provided Contractor gives prompt written notice and substantiation.

6. Subcontractors; Assignment

Contractor may engage subcontractors to perform portions of the Work. Contractor shall remain fully responsible for performance and payment of subcontractors. Contractor shall not assign this Contract without Owner's prior written consent, which shall not be unreasonably withheld.

7. Warranties

Contractor warrants that all Work shall be free of defects in materials and workmanship for a period of months from the date of final completion, unless a longer period is specified in applicable manufacturer warranties or law.

8. Insurance and Bonds

Contractor shall maintain, at its expense, insurance in the types and amounts sufficient to protect Owner and Contractor from claims arising out of the Work. Minimum limits (per occurrence) shall be: Commercial General Liability ; Workers' Compensation as required by law; Automobile Liability .

If bonds are required by Owner, Contractor shall furnish payment and performance bonds in amounts and form acceptable to Owner prior to commencement of Work.

9. Indemnification

Contractor shall indemnify, defend and hold harmless Owner, its officers, agents and employees from and against all claims, damages, losses and expenses, including reasonable attorneys' fees, arising out of or resulting from the performance of the Work, to the extent caused by Contractor's negligent acts or omissions or those of its subcontractors or suppliers.

10. Inspection and Acceptance

Owner shall have the right to inspect the Work at reasonable times. Final payment shall not be due until Owner has accepted the Work as substantially complete and any punch list items have been addressed in accordance with the Contract.

11. Termination

11.1 Owner may terminate this Contract for convenience upon days' written notice, in which case Owner shall pay Contractor for Work performed and reasonable costs of demobilization.

11.2 Either party may terminate for cause if the other party materially breaches the Contract and fails to cure within days after written notice.

12. Dispute Resolution

The parties shall attempt in good faith to resolve disputes promptly by negotiation between executives. If unresolved, disputes shall be submitted first to non-binding mediation and, if still unresolved, to binding arbitration in accordance with the rules of the selected neutral forum. The parties agree that any award shall be final and binding and judgment may be entered in any court of competent jurisdiction.

13. Governing Law; Venue

This Contract shall be governed by and construed in accordance with the laws of the state of without regard to its choice of law rules. Venue for any judicial proceedings shall lie in the state and federal courts located in the county where the Project is located.

14. Notices

All notices required or permitted under this Contract shall be in writing and delivered to the parties at their addresses set forth below or at such other address as each party may designate by written notice.

15. Amendments; Waiver; Counterparts

Any amendment to this Contract must be in writing and signed by both parties. Failure to insist upon strict performance of any provision shall not constitute a waiver of the provision or any other provision. This Contract may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

16. Entire Agreement; Severability

This Contract, including any attachments and executed Change Orders, constitutes the entire agreement between the parties regarding the Project. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

17. Additional Provisions

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