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§1 The Contractor and Surety,jointly and severally,bind themselves,their heirs,executors,administrators,successors and assigns to the Owner to
<br /> pay for labor,materials and equipment furnished for use in the performance of the Construction Contract,which is incorporated herein by reference,
<br /> subject to the following terms.
<br /> §2 If the Contractor promptly makes payment of all sums due to Claimants,and defends,indemnifies and holds harmless the Owner from claims,
<br /> demands,liens or suits by any person or entity seeking payment for labor,materials or equipment furnished for use in the performance of the
<br /> Construction Contract,then the Surety and the Contractor shall have no obligation under this Bond.
<br /> §3 If there is no Owner Default under the Construction Contract,the Surety's obligation to the Owner under this Bond shall arise after the Owner
<br /> has promptly notified the Contractor and the Surety(at the address described in Section 13)of claims,demands,liens or suits against the Owner or
<br /> the Owner's property by any person or entity seeking payment for labor,materials or equipment furnished for use in the performance of the
<br /> Construction Contract and tendered defense of such claims,demands,liens or suits to the Contractor and the Surety.
<br /> §4 When the Owner has satisfied the conditions in Section 3,the Surety shall promptly and at the Surety's expense defend,indemnify and hold
<br /> harmless the Owner against a duly tendered claim,demand,lien or suit.
<br /> §5 The Surety's obligations to a Claimant under this Bond shall arise after the following:
<br /> §5.1 Claimants,who do not have a direct contract with the Contractor,
<br /> .1 have furnished a written notice of non-payment to the Contractor,stating with substantial accuracy the amount claimed and the
<br /> name of the party to whom the materials were,or equipment was,furnished or supplied or for whom the labor was done or
<br /> performed,within ninety(90)days after having last performed labor or last furnished materials or equipment included in the Claim;
<br /> and
<br /> .2 have sent a Claim to the Surety(at the address described in Section 13).
<br /> §5.2 Claimants,who are employed by or have a direct contract with the Contractor,have sent a Claim to the Surety(at the address described in
<br /> Section 13).
<br /> §6 If a notice of non-payment required by Section 5.1.1 is given by the Owner to the Contractor,that is sufficient to satisfy a Claimant's obligation
<br /> to furnish a written notice of non-payment under Section 5.1.1.
<br /> §7 When a Claimant has satisfied the conditions of Sections 5.1 or 5.2,whichever is applicable,the Surety shall promptly and at the Surety's
<br /> expense take the following actions:
<br /> §7.1 Send an answer to the Claimant,with a copy to the Owner,within sixty(60)days after receipt of the Claim,stating the amounts that are
<br /> undisputed and the basis for challenging any amounts that are disputed;and
<br /> §7.2 Pay or arrange for payment of any undisputed amounts.
<br /> §7.3 The Surety's failure to discharge its obligations under Section 7.1 or Section 7.2 shall not be deemed to constitute a waiver of defenses the
<br /> Surety or Contractor may have or acquire as to a Claim,except as to undisputed amounts for which the Surety and Claimant have reached agreement.
<br /> If,however,the Surety fails to discharge its obligations under Section 7.1 or Section 7.2,the Surety shall indemnify the Claimant for the reasonable
<br /> attorney's fees the Claimant incurs thereafter to recover any sums found to be due and owing to the Claimant.
<br /> §8 The Surety's total obligation shall not exceed the amount of this Bond,plus the amount of reasonable attorney's fees provided under Section 7.3,
<br /> and the amount of this Bond shall be credited for any payments made in good faith by the Surety.
<br /> §9 Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the performance of the Construction Contract
<br /> and to satisfy claims,if any,under any construction performance bond.By the Contractor furnishing and the Owner accepting this Bond,they agree
<br /> that all funds earned by the Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of the Contractor and
<br /> Surety under this Bond,subject to the Owner's priority to use the funds for the completion of the work.
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