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<br />I. The Con Iracwrand the Surety, jointly and severally, bind themselves.
<br />tneir nun, executors, 34IMA eramrs. suuce,sors anti assigns to the Owner
<br />for the performance of the Construction Contract, which is incorporated
<br />herein by reference.
<br />2. [(The Contractor performs the Construction Contract, the Surety and
<br />The Contractor shall have no obligation under this Bond. except to par.
<br />ricipatc in conferences as provided in Subparagraph 3.1.
<br />3. If there is no Owner Default, the Surety's obligation under this Bond
<br />shall anse after.
<br />I. The Owner has notified the Contractor and the Surety at its address
<br />described in Paragraph 10 below, than the Owner is considering
<br />declaring a Contractor Default and has requested and attempted
<br />to arrange a conference with the Contractor and she Surety to be
<br />held not later than fifteen days after receipt of such notice to
<br />discuss methods of performing the Construction Contract. If the
<br />Owner. the Contractor and the Surety agree, the Contractor shall
<br />be allowed a reasonable time to perform the Consnnetion Con-
<br />tract, but such an agreement shall not waive the Owner's right, if
<br />any, subsequently to declare a Contractor Default: and
<br />3.2, The Owner has declared a Contractor Default and formally ter-
<br />minated the Contractor's light to complete the contract. Such
<br />Contractor Default shall not be declared earlier than twenty days
<br />after the Contractor and the Surety have received notice as pro•
<br />vided in Subparagraph 3.1; and
<br />3.3. The Owner has agreed to pay the Balance of the Contract Price
<br />to the Surety in accordance with the terms of the Construction
<br />Contract or to a contractor selected to perform the Construction
<br />Contract in accordance with the terms of the contract with the
<br />Owner,
<br />4, When the Owner has satisfied the conditions of Paragraph J. the Surety
<br />shall promptly and at the Surety's etpense take one or the following
<br />actions:
<br />4.I, Arrange for the Contractor, with consent of the Owner, to perform
<br />and complete the Construction Contract: or
<br />4,2. Undertake to periorm and complete the Construction Contract
<br />itself, through its agents or through independent contractors. or
<br />4.3. Obtain bids or negotiated proposals from qualified contractors
<br />acceptable to the Owner for a contract forperforrnance and com-
<br />pletion of the Construction Contract, arrange for a contract to be
<br />prepared for execution by the Owner and the contractor selected
<br />with the Owner's concurrence, to be secured with performance
<br />and payment bonds executed by a qualified surety equivalent to
<br />The bonds issued on the Construction Contract, and pay to the
<br />Owner the amount of dansages as described in Paragraph 6 in
<br />excess of the Balance of the Contract Price incurred by the Owner
<br />resulting from the Contractor's default; or
<br />4.4. Waive its right to perform and earn piece, arrange for completiOn.'
<br />orobsain a ne w c ontrac i or a nd with reasonable prom pine ssunder
<br />the circumstances:
<br />1, After investigation. determine the amount for which it may be
<br />liable to the Ownerand. as soon as practicable after the amount
<br />is determined, render payment therefor to the Owner; or
<br />2. Deny liability in whole or in pan and sctifr the Owner siting
<br />reasons therefor.
<br />5. 1f the Surety does not proceed as provided in Paragraph 4 with season•
<br />able promptness. the Surety shall be deemed to be in default an this Bond
<br />fifteen days after receipt of an additional written notice from the Owner
<br />to the Surety demanding that the Surety perform its ab!.eatioms under this
<br />Omni, and the Owner shall he entitled to cn tree any remedy available to
<br />the Owner. If rhe Surety proceeds as provided In Suhpiragra.ph 4,4, and
<br />the Owner refuses the payment tendered or the Surety has denied liability,
<br />in whole or in pan, without further notice the Owner shall be entitled to
<br />enforce any remedy available to the Owner.
<br />6. After the Owner has terminated the Contractor s right to compte.t lilt
<br />:_-;.Lruction Contract. and if tic Surety el.cts to ac: under SutparsirsN;,
<br />4.1..4 2. or 4.3 above, then the responsibilities of the Surety to the Owner p
<br />shall not be great[r than those of the Contractor under the Conttnrellan
<br />Contract, and the responsibilities of the O+wner'to the Surety shall not be
<br />greater than those of the Owner under the Con$Irttelion Cantract. To the
<br />limit of the amount of this Bond. but subject to commitment by the 0wner
<br />of the Balance of the Contract Price to mitigation of costs and damages
<br />On [he Construction Contract, the Surety is obligated without duplication
<br />for:
<br />6.1. The responsibilities or the Contractor for correction of defective
<br />work and completion of the Consttuction Contract;
<br />6.2, Additional legal, design professional and delay costs resulting
<br />from the Contractor's Default. and resulting from the acttcns or
<br />failure so act of the Surely under Paragraph 4; and
<br />6.3. Liquidated damages. or if no liquidated damages are specified in
<br />the Construction Contract, actual damages caused by dehtyed
<br />perfarmance or non-performance of the Contractor. l
<br />7. The Surety shall not be liable to the Owner at others for obligations of
<br />the Contractor that are unrelated to the Construction Contract, and the
<br />Balance of the Contract Price shall not be reduced or set off on account
<br />of any such unrelated obligations. No right of -action shall accrue on this
<br />Bond to any person or entity other than the Owner or its heirs, cxctutors.
<br />administrator3. or successors.
<br />S. The Surely bercby waives notice of any change, including changes of
<br />lime. to the Construction Contract or to related subcontracts, purchase
<br />orders and other abligatians.
<br />9. Any proceeding, legal or equitable, under this Bond may be instituted
<br />in any court of competent jurisdiction in the location in which the work I
<br />or part of the work is located and shall be instituted within two years after
<br />Contractor Default orwiihin two years after the Contractorccased work-
<br />ing or within two years after the Surety refuses or fails to perform its
<br />obligations under this Bond, whichever occurs first. If the provutons of
<br />this Paragraph arc void or prohibited by law, the minimum period of
<br />limitation available to sureties as a defense ars the jurisdiction of the suit
<br />shall be applicable.
<br />10. Notice to the Surely, the Owner or the Cotnractor shall be mailed or
<br />delivered to the address shown an the signature page.
<br />Il. When this Bond has been furnished to Comply with a statutory or
<br />other legal requirement in the location where the construction was to be
<br />performed. any provision in this Bond conflicting with said statutory lir
<br />legal requirement shall be deemed deleted herefrom and provisions con•
<br />forming to such statutory or other legal requirement shall be deemed
<br />incorporated herein. The intent is that this Bond shall be construed as a
<br />statutory bond and not as a common law bond. _
<br />12. Definitions.
<br />12.1. Balance of the Contract Price; The total amount payable by the
<br />Owner to the Contractor under the Construction Contract after
<br />all proper adjustmeon have been made, including allowance to
<br />the Contractor of any amounts received or to be received by
<br />the Owner in settlement of Insurance or other claims for dam-
<br />ages to which rhe Contractor is entitled. reduced by all valid
<br />and proper payments made to lir on behalf of the Contractor
<br />under the Construction Contrct.
<br />12.2. Construction Conitact: The agreement between the Owner and
<br />the Contractor identified on the signature page, 'including all
<br />Contract Documents and changes thereto.
<br />:2.3. ConeractorDefault:Fai!ureofeheContractor, which has neither
<br />been remedied nor waived, to perfarm or otherwise to comply
<br />with the terms of the Construction Contract.
<br />12.4. Owner Default: Failure of the Owner, which has neither been
<br />remedied nor waived, to pay the Contractor as required by the
<br />Construction Contract or to perform and complete or comply
<br />with the other terms thereof.
<br />(FOR INFORMATION ONLY—Name, Address and Telephone)
<br />AGENT or BROKER: OWNER'S REPRESENTATIVE (Architect, Engineer or other party):
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