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1. Contractor and Surety, jointly and severally, bind themselves, their
<br />heirs, executors, administrators, successors, and assigns to Owner for the
<br />performance of the Contract, which is incorporated herein by reference.
<br />2. If Contractor performs the Contract, Surety and Contractor have no
<br />obligation under this Bond, except to participate in conferences as provided
<br />in Paragraph 3.1.
<br />3. If there is no Owner Default, Surety's obligation under this Bond
<br />shall arise after:
<br />3.1 Owner has notified Contractor and Surety, at the addresses
<br />described in Paragraph 10 below, that Owner is considering
<br />declaring a Contractor Default and has requested and attempted
<br />to arrange a conference with Contractor and Surety to be held
<br />not later than 15 days after receipt of such notice to discuss
<br />methods of performing the Contract. If Owner, Contractor and
<br />Surety agree, Contractor shall be allowed a reasonable time to
<br />perform the Contract, but such an agreement shall not waive
<br />Owner's right, if any, subsequently to declare a Contractor
<br />Default; and
<br />3.2 Owner has declared a Contractor Default and formally
<br />terminated Contractor's right to complete the Contract. Such
<br />Contractor Default shall not be declared earlier than 20 days
<br />after Contractor and Surety have received notice as provided in
<br />Paragraph 3.1; and
<br />3.3 Owner has agreed to pay the Balance of the Contract Price to:
<br />1. Surety in accordance with the terms of the Contract;
<br />2. Another contractor selected pursuant to Paragraph 4.3 to
<br />perform the Contract.
<br />4. When Owner has satisfied the conditions of Paragraph 3, Surety shall
<br />promptly and at Surety's expense take one of the following actions:
<br />4.1 Arrange for Contractor, with consent of Owner, to perform and
<br />complete the Contract; or
<br />4.2 Undertake to perform and complete the Contract itself, through
<br />its agents or through independent contractors; or
<br />4.3 Obtain bids or negotiated proposals from qualified contractors
<br />acceptable to Owner for a contract for performance and
<br />completion of the Contract, arrange for a contract to be prepared
<br />for execution by Owner and Contractor selected with Owner's
<br />concurrence, to be secured with performance and payment
<br />bonds executed by a qualified surety equivalent to the bonds
<br />issued on the Contract, and pay to Owner the amount of
<br />damages as described in Paragraph 6 in excess of the Balance of
<br />the Contract Price incurred by Owner resulting from Contractor
<br />Default; or
<br />4.4 Waive its right to perform and complete, arrange for
<br />completion, or obtain a new contractor and with reasonable
<br />promptness under the circumstances:
<br />1. After investigation, determine the amount for which it
<br />may be liable to Owner and, as soon as practicable after
<br />the amount is determined, tender payment therefor to
<br />Owner; or
<br />2. Deny liability in whole or in part and notify Owner citing
<br />reasons therefor.
<br />5. If Surety does not proceed as provided in Paragraph 4 with reasonable
<br />promptness, Surety shall be deemed to be in default on this Bond 15 days
<br />after receipt of an additional written notice from Owner to Surety
<br />demanding that Surety perform its obligations under this Bond, and Owner
<br />shall be entitled to enforce any remedy available to Owner. If Surety
<br />proceeds as provided in Paragraph 4.4, and Owner refuses the payment
<br />tendered or Surety has denied liability, in whole or in part, without further
<br />notice Owner shall be entitled to enforce any remedy available to Owner.
<br />FOR INFORMATION ONLY - Name, Address and Telephone
<br />Surety Agency or Broker
<br />Owner's Representative (engineer or other party)
<br />6. After Owner has terminated Contractor's right to complete the
<br />Contract, and if Surety elects to act under Paragraph 4.1, 4.2, or 4.3 above,
<br />then the responsibilities of Surety to Owner shall not be greater than those
<br />of Contractor under the Contract, and the responsibilities of Owner to
<br />Surety shall not be greater than those of Owner under the Contract. To a
<br />limit of the amount of this Bond, but subject to commitment by Owner of
<br />the Balance of the Contract Price to mitigation of costs and damages on the
<br />Contract, Surety is obligated without duplication for:
<br />6.1 The responsibilities of Contractor for con-ection of defective
<br />Work and completion of the Contract;
<br />6.2 Additional legal, design professional, and delay costs resulting
<br />from Contractor's Default, and resulting from the actions or
<br />failure to act of Surety under Paragraph 4; and
<br />6.3 Liquidated damages, or if no liquidated damages are specified
<br />in the Contract, actual damages caused by delayed performance
<br />or non-performance of Contractor.
<br />7. Surety shall not be liable to Owner or others for obligations of
<br />Contractor that are unrelated to the Contract, and the Balance of the
<br />Contract Price shall not be reduced or set off on account of any such
<br />unrelated obligations. No right of action shall accrue on this Bond to any
<br />person or entity other than Owner or its heirs, executors, administrators, or
<br />successors.
<br />8. Surety hereby waives notice of any change, including changes of
<br />time, to Contract or to related subcontracts, purchase orders, and other
<br />obligations.
<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 or
<br />part of the Work is located and shall be instituted within two years after
<br />Contractor Default or within two years after Contractor ceased working or
<br />within two years after Surety refuses or fails to perform its obligations
<br />under this Bond, whichever occurs first. If the provisions of this paragraph
<br />are void or prohibited by law, the minimum period of limitation available
<br />to sureties as a defense in the jurisdiction of the suit shall be applicable.
<br />10. Notice to Surety, Owner, or Contractor shall be mailed or delivered to
<br />the address shown on the signature page.
<br />11. When this Bond has been furnished to comply with a statutory
<br />requirement in the location where the Contract was to be performed, any
<br />provision in this Bond conflicting with said statutory requirement shall be
<br />deemed deleted herefrom and provisions conforming to such statutory
<br />requirement shall be deemed incorporated herein. The intent is that this
<br />Bond shall be construed as a 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
<br />Owner to Contractor under the Contract after all proper
<br />adjustments have been made, including allowance to Contractor
<br />of any amounts received or to be received by Owner in
<br />settlement of insurance or other Claims for damages to which
<br />Contractor is entitled, reduced by all valid and proper payments
<br />made to or on behalf of Contractor under the Contract.
<br />12.2 Contract: The agreement between Owner and Contractor
<br />identified on the signature page, including all Contract
<br />Documents and changes thereto.
<br />12.3 Contractor Default: Failure of Contractor, which has neither
<br />been remedied nor waived, to perform or otherwise to comply
<br />with the terms of the Contract.
<br />12.4 Owner Default: Failure of Owner, which has neither been
<br />remedied nor waived, to pay Contractor as required by the
<br />Contract or to perform and complete or comply with the other
<br />terms thereof.
<br />Performance Bond
<br />00 6111-2
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