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§1 The Contractor and Surety,jointly and severally, bind themselves, their heirs, executors, administrators, successors and
<br /> assigns to the Owner for the performance of the Construction Contract,which is incorporated herein by reference.
<br /> §2 If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this
<br /> Bond,except when applicable to participate in a conference as provided in Section 3.
<br /> §3 If there is no Owner Default under the Construction Contract,the Surety's obligation under this Bond shall arise after
<br /> .1 the Owner first provides notice to the Contractor and the Surety that the Owner is considering declaring a
<br /> Contractor Default. Such notice shall indicate whether the Owner is requesting a conference among the Owner,
<br /> Contractor and Surety to discuss the Contractor's performance.If the Owner does not request a conference,the
<br /> Surety may, within five(5)business days after receipt of the Owner's notice,request such a conference. If the
<br /> Surety timely requests a conference,the Owner shall attend.Unless the Owner agrees otherwise,any conference
<br /> requested under this Section 3.1 shall be held within ten (10) business days of the Surety's receipt of the
<br /> Owner's notice.If the Owner,the Contractor and the Surety agree,the Contractor shall be allowed a reasonable
<br /> time to perform the Construction Contract, but such an agreement shall not waive the Owner's right, if any,
<br /> subsequently to declare a Contractor Default;
<br /> .2 the Owner declares a Contractor Default,terminates the Construction Contract and notifies the Surety;and
<br /> .3 the Owner has agreed to pay the Balance of the Contract Price in accordance with the terns of the Construction
<br /> Contract to the Surety or to a contractor selected to perform the Construction Contract.
<br /> §4 Failure on the part of the Owner to comply with the notice requirement in Section 3.1 shall not constitute a failure to
<br /> comply with a condition precedent to the Surety's obligations,or release the Surety from its obligations, except to the extent
<br /> the Surety demonstrates actual prejudice.
<br /> §5 When the Owner has satisfied the conditions of Section 3,the Surety shall promptly and at the Surety's expense take one of
<br /> the following actions:
<br /> §5.1 Arrange for the Contractor,with the consent of the Owner,to perform and complete the Construction Contract;
<br /> §5.2 Undertake to perform and complete the Construction Contract itself,through its agents or independent contractors;
<br /> §5.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a contract for performance and
<br /> completion of the Construction Contract, arrange for a contract to be prepared for execution by the Owner and a contractor
<br /> selected with the Owner's concurrence, to be secured with performance and payment bonds executed by a qualified surety
<br /> equivalent to the bonds issued on the Construction Contract, and pay to the Owner the amount of damages as described in
<br /> Section 7 in excess of the Balance of the Contract Price incurred by the Owner as a result of the Contractor Default;or
<br /> §5.4 Waive its right to perform and complete, arrange for completion, or obtain a new contractor and with reasonable
<br /> promptness under the circumstances:
<br /> .1 After investigation, determine the amount for which it may be liable to the Owner and,as soon as practicable
<br /> after the amount is determined,make payment to the Owner;or
<br /> .2 Deny liability in whole or in part and notify the Owner,citing the reasons for denial.
<br /> §6 If the Surety does not proceed as provided in Section 5 with reasonable promptness,the Surety shall be deemed to be in
<br /> default on this Bond seven days after receipt of an additional written notice from the Owner to the Surety demanding that the
<br /> Surety perform its obligations under this Bond,and the Owner shall be entitled to enforce any remedy available to the Owner.
<br /> If the Surety proceeds as provided in Section 5.4, and the Owner refuses the payment or the Surety has denied liability, in
<br /> whole or in part,without further notice the Owner shall be entitled to enforce any remedy available to the Owner.
<br /> §7 If the Surety elects to act under Section 5.1, 5.2 or 5.3,then the responsibilities of the Surety to the Owner shall not be
<br /> greater than those of the Contractor under the Construction Contract,and the responsibilities of the Owner to the Surety shall
<br /> not be greater than those of the Owner under the Construction Contract. Subject to the commitment by the Owner to pay the
<br /> Balance of the Contract Price,the Surety is obligated,without duplication,for
<br /> .1 the responsibilities of the Contractor for correction of defective work and completion of the Construction
<br /> Contract;
<br /> .2 additional legal,design professional and delay costs resulting from the Contractor's Default,and resulting from
<br /> the actions or failure to act of the Surety under Section 5;and
<br /> .3 liquidated damages, or if no liquidated damages are specified in the Construction Contract, actual damages
<br /> caused by delayed performance or non-performance of the Contractor.
<br /> The Company executing this bond vouches that this document conforms to American Institute of Architects Document
<br /> A312,2010 edition 2
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