Common use of Basis for Withholding Payment Clause in Contracts

Basis for Withholding Payment. Notwithstanding anything contained in Section 2.1, Landlord shall be entitled to withhold payment to the Contractor in the event: (i) the Landlord reasonably determines that the work does not conform to the plans and specifications; (ii) the Landlord reasonably determines that the work is defective or deficient; (iii) the Contractor does not present adequate documentation as required in the Work Agreement; (iv) a mechanic’s lien is placed against the work or the Building or Project, or a lien is threatened by any party for the Cable Installation or the Cost Overage (as defined in the Work Agreement); (v) the Landlord has obtained evidence that any party has not been timely paid, (vi) the Tenant or its Contractor fails to strictly comply with each and every requirement of “Landlord’s Construction Rules” (Exhibit F to the Lease); or (vii) the Landlord reasonably determines that the percentage completion in the applicable draw request is inaccurate. Furthermore, in the event Tenant is at any time during construction of the Tenant Improvements in material default of the Lease, Landlord shall so notify Tenant and Contractor in writing (the “Default Notice”), and Landlord may withhold future payments to Contractor from the Escrow Account.