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1. The Contractor and Surety, jointly and severally, bind
<br />themselves, their heirs, executors, administrators, successors, and
<br />assigns to the Owner for the performance of the Construction
<br />Contract, which is incorporated herein by reference.
<br />2. If the Contractor performs the Construction Contract,
<br />the Surety and the Contractor shall have no obligation under this
<br />Bond, except when applicable to participate in a conference as
<br />provided in Paragraph 3.
<br />3. If there is no Owner Default under the Construction
<br />Contract, the Surety's obligation under this Bond shall arise after:
<br />3.1 The Owner first provides notice to the Contractor and
<br />the Surety that the Owner is considering declaring a
<br />Contractor Default. Such notice shall indicate whether the
<br />Owner is requesting a conference among the Owner,
<br />Contractor, and Surety to discuss the Contractor's
<br />performance. If the Owner does not request a conference, the
<br />Surety may, within five (5) business days after receipt of the
<br />Owner's notice, request such a conference. If the Surety
<br />timely requests a conference, the Owner shall attend. Unless
<br />the Owner agrees otherwise, any conference requested under
<br />this Paragraph 3.1 shall be held within ten (10) business days
<br />of the Surety's receipt of the Owner's notice. If the Owner, the
<br />Contractor, and the Surety agree, the Contractor shall be
<br />allowed a reasonable time to perform the Construction
<br />Contract, but such an agreement shall not waive the Owner's
<br />right, if any, subsequently to declare a Contractor Default;
<br />3.2 The Owner declares a Contractor Default, terminates the
<br />Construction Contract and notifies the Surety; and
<br />3.3 The Owner has agreed to pay the Balance of the Contract
<br />Price in accordance with the terms of the Construction
<br />Contract to the Surety or to a contractor selected to perform
<br />the Construction Contract.
<br />4. Failure on the part of the Owner to comply with the
<br />notice requirement in Paragraph 3.1 shall not constitute a failure
<br />to comply with a condition precedent to the Surety's obligations,
<br />or release the Surety from its obligations, except to the extent the
<br />Surety demonstrates actual prejudice.
<br />5. When the Owner has satisfied the conditions of
<br />Paragraph 3, the Surety shall promptly and at the Surety's expense
<br />take one of the following actions:
<br />5.1 Arrange for the Contractor, with the consent of the
<br />Owner, to perform and complete the Construction Contract;
<br />5.2 Undertake to perform and complete the Construction
<br />Contract itself, through its agents or independent contractors;
<br />5.3 Obtain bids or negotiated proposals from qualified
<br />contractors acceptable to the Owner for a contract for
<br />performance and completion of the Construction Contract,
<br />arrange for a contract to be prepared for execution by the
<br />Owner and a contractor selected with the Owners
<br />concurrence, to be secured with performance and payment
<br />bonds executed by a qualified surety equivalent to the bonds
<br />issued on the Construction Contract, and pay to the Owner
<br />the amount of damages as described in Paragraph 7 in excess
<br />of the Balance of the Contract Price incurred by the Owner as
<br />a result of the Contractor Default; or
<br />5.4 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 />5.4.1 After investigation, determine the amount for
<br />which it may be liable to the Owner and, as soon as
<br />practicable after the amount is determined, make
<br />payment to the Owner; or
<br />5.4.2 Deny liability in whole or in part and notify the
<br />Owner, citing the reasons for denial.
<br />6. If the Surety does not proceed as provided in Paragraph
<br />5 with reasonable promptness, the Surety shall be deemed to be
<br />in default on this Bond seven days after receipt of an additional
<br />written notice from the Owner to the Surety demanding that the
<br />Surety perform its obligations under this Bond, and the Owner shall
<br />be entitled to enforce any remedy available to the Owner. If the
<br />Surety proceeds as provided in Paragraph 5.4, and the Owner
<br />refuses the payment or the Surety has denied liability, in whole or
<br />in part, without further notice the Owner shall be entitled to
<br />enforce any remedy available to the Owner.
<br />7. If the Surety elects to act under Paragraph 5.1, 5.2, or 5.3,
<br />then the responsibilities of the Surety to the Owner shall not be
<br />greater than those of the Contractor under the Construction
<br />Contract, and the responsibilities of the Owner to the Surety shall
<br />not be greater than those of the Owner under the Construction
<br />Contract. Subject to the commitment by the Owner to pay the
<br />Balance of the Contract Price, the Surety is obligated, without
<br />duplication for:
<br />7.1 the responsibilities of the Contractor for correction of
<br />defective work and completion of the Construction Contract;
<br />7.2 additional legal, design professional, and delay costs
<br />resulting from the Contractor's Default, and resulting from
<br />the actions or failure to act of the Surety under Paragraph 5;
<br />and
<br />7.3 liquidated damages, or if no liquidated damages are
<br />specified in the Construction Contract, actual damages caused
<br />by delayed performance or non-performance of the
<br />Contractor.
<br />8. If the Surety elects to act under Paragraph 5.1, 5.3, or 5.4,
<br />the Surety's liability is limited to the amount of this Bond.
<br />9. The Surety shall not be liable to the Owner or others for
<br />obligations of the Contractor that are unrelated to the
<br />Construction Contract, and the Balance of the Contract Price shall
<br />not be reduced or set off on account of any such unrelated
<br />obligations. No right of action shall accrue on this Bond to any
<br />EJCDC® C-610, Performance Bond
<br />Copyright © 2013 National Society of Professional Engineers, American Council of Engineering Companies,
<br />and American Society of Civil Engineers. All rights reserved. 2 of 3
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