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<br />1 The Contractor and the Surely, jointly and severally,
<br />bind themselves, [heir heirs, executors, administrators,
<br />successors and assigns to the Owner for the performance
<br />of the Consouction Contract, which is incorporated herein
<br />by reference.
<br />2 If the Conlractor performs the Construction Conlracl,
<br />the Surety and tine Contractor shall have no obligation
<br />under this Bond, except to participate in conferences as
<br />provided In Subparagraph 3.1.
<br />3 If there is no Owner Default, the Surety's obligation
<br />under this Bond shall arise after.
<br />3.1 The Owner has notified the Contractor and the
<br />Surety at its address described in Paragraph 14 below
<br />that the Owner is considering declaring a Comrattor
<br />Default and has requested and attempted to arrange a
<br />conference with the Contractor and the Surety to be
<br />Feld not later than fifteen days after receipt of such
<br />notice to discuss methods of performing the Cons lruc-
<br />tion Contract. If the Owner, the Contractor and the
<br />Surety agree, the Contractor shall be allowed a reason•
<br />able time to perform the Construction Cunsract, but
<br />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
<br />formally terminated the Contractor's right Io complete
<br />the contract, Such Contractor Default shall not be de-
<br />clared earlier than Iwenly days after the Contractor and
<br />the Surely have received notice as provided in Sub-
<br />paragraph 3.1; and
<br />3.3 The Owner has agreed to pay the Balance of the
<br />Contract Price to the Surety in accordance %illi the
<br />terms of the Construction Contract or to it contractor
<br />selected to perform the Construction Contract in accor�
<br />dance with the terms of the contract wills the owner,
<br />4 When the Owner has satisfied the conditions of Para-
<br />graph 3, the Surety shall promptly and at the Surely's ex•
<br />pense take one of the following actions:
<br />4.1 Arrange for the Conlractor, with consent of the
<br />Owner, to perforin and complete the Construction.
<br />Contract; or
<br />4.2 Undertake to perform and complete Ilse Construc-
<br />tion Contract itself, lhiough its agents or through inde-
<br />pendent contractors; or
<br />4.3 Obtain bids or negotiated proposals from
<br />qualified contractors acceptable to the Owner for a
<br />consract fqr performance and Completion of the Con-
<br />struction Contract, arrange for a contract to be pre,
<br />pared for execution by the Owner and the contractor
<br />selected with the owner's concurrence, to be secured
<br />with performance and payment bonds execuled by a
<br />qualified surely equivalent to Ilse bonds issued on the
<br />Construction Contract, and pay to the Owner the
<br />amount of damages as described in Paragraph 6 in ex.
<br />cess ut oke ailanto of tln Cuolrail Price lncul+ed Ly Idle
<br />Owner resulting from the Conlraclor's default; or
<br />4.4 Waive its right to perform and Lomplese, arrange
<br />for completion, or obtain a nese contractor and %wills
<br />reasonable promptness under she circumstances:
<br />.1 Alter investigalion, delerrnfne title An,uunt fur
<br />lihich it Illay be Gable to Ilse Owner and, as
<br />soon as practicable after the amount is deter•
<br />mined, tender payment therefor to the
<br />Owner; or
<br />.2 Deny liability in whole or in part and nosily the
<br />Owner citing reasons therefor.
<br />5 Ii the Surely does not proceed as iYtovided in Paragraph
<br />4 wish reasonable promptness, ilie Surely shall be deemed
<br />to be in default on Ihis Bond fifteen days after receipt of an
<br />additional written notice (torn the Owner to the Surety
<br />demanding that the Surely perform its obligations under
<br />this Bond, and the Owner shall be entitled to enforce any
<br />remedy available to the Owner. If the Surety proceeds as
<br />provided in Subparagraph 4.4, and tile Owner refuses the
<br />payment tendered or the Surely has denied liability, in
<br />wllote or in part, wilhoul further notice she Owner shall be
<br />entitled to enforce any remedy available to the Owner,
<br />G After the Owner has Ierrninaled the Contraclor's right
<br />to complete the Construction Contract, and if the Surely
<br />elects to act under Subparagraph 4.1, 4.2, or 4.3 above,
<br />then Ilse responsibilities of the Surety Io the Owner shall
<br />not be greater than those of Ilse Contractor under the
<br />Construction Contract, and the responsibilities of the
<br />Owner to lhp Surely shall not be greater than those of the
<br />Owner under the Construction Contract. To the limit of the
<br />amount of this Bond, but subject to commilment by the
<br />Owner of the Balance of the Contract Price to mitigation of
<br />costs and damages on Idle Conslruction Contract, the Sure-
<br />ty is obligated without duplication for:
<br />6,1 The responsibilities of the Contractor for correc•
<br />Sion of detective work and completion of the Construc-
<br />tion Contract;
<br />6.2 Additional legal, design professional and delay
<br />costs resulting from the Contractor's Default, and.te-
<br />sulting from the actions or failure to act of the 'Surely
<br />under Paragraph 4; and
<br />6.3 Liquidated damages, or if no liquidated damages
<br />are specified in the Construction Cons Fact, actual dam.
<br />ages caused by delayed performance or non-perfor.
<br />mance of the Contractor,
<br />7 1 he Surely shall not be liable to the Owner or others for
<br />obligalions of the Contractor that are unrelated to tale Coll -
<br />struclion Contract, and the Balance of the Contract Price
<br />shall not be reduced or set off on account of any such
<br />unrelated obligations, No right of action shall accrue on
<br />this bond to any person or entity other than the Owner or
<br />its heirs, ninrnlorc. administrators or su.*cessors,
<br />8 The Surely hereby waives nolice o1 any change, rnclud-
<br />inh Changes of time, to Isle Construction Contract or to
<br />related sultcnrilracts, purchase orders and a0mr obliga-
<br />tions.
<br />9 Any trroceedmg, legal or equitable, tinder this l3c:ld
<br />may be ioslituled in any court of compeleni jurisdiction in
<br />tree location mwhlch the work or tart of line work is localed
<br />and shall be insiisuted t%iiltia i%%o years after Contractor
<br />Ll ufiult. ur ,.+illi:[ t'%o ycarN after the L'q,strd sur erased
<br />workingtic s„shin Iwo years afler the 5urely refuses or fails
<br />so perform its obligations under this Bund, whichever oc-
<br />curs lif$C If the provisions of this Paragraph are void or
<br />prohibilod by law, tile minimum period of limitation avail-
<br />AlA DocUM[Nt A311 - I1l1r0R+tArt1 110,A+ ANO FMMIrti BOND - L1lC M11lf1104 to • All } -- — -- - -
<br />11,01 AMIRIC.A`i IvsrrtUlt t.)r alcrnrWIS. Irl% r 1w IM A'4'9., N.W.. WASHM;tuv. a c ;CAk4 A317.1984 2
<br />THIRD PRINIu,C • &0101 1911
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