|
§ 1 The Contractor and Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors
<br />and assigns to the Owner to pay for labor, materials and equipment furnished for use in the performance of the
<br />Construction Contract, which is. incorporated herein by reference, subject to the following terms.
<br />§ 2 If the Contractor promptly makes payment of all sums due to Claimants, and defends, indemnifies and holds
<br />harmless the Owner from claims, demands, liens or suits by any person or entity seeking payment for labor, materials
<br />or equipment furnished for use in the performance of the Construction Contract, then the Surety and the Contractor
<br />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
<br />shall arise after the Owner has promptly notified the Contractor and the Surety (at the address described in Section 13)
<br />of claims, demands, liens or suits against the Owner or the Owner's property by any person or entity seeking payment
<br />for labor, materials or equipment furnished for use in the performance of the Construction Contract and tendered
<br />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
<br />defend, indemnify and hold 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
<br />amount claimed and the name of the patty to whom the materials were, or equipment was, furnished or
<br />supplied or for whom the labor was done or performed, within ninety (90) days after having last
<br />performed labor or last furnished materials or equipment included in the Claim; 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
<br />the address described in 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
<br />satisfy a Claimant's obligation 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
<br />promptly and at the Surety's 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,
<br />stating the amounts that are 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
<br />constitute a waiver of defenses the Surety or Contractor may have or acquire as to a Claim, except as to undisputed
<br />amounts for which the Surety and Claimant have reached agreement. If, however, the Surety fails to discharge its
<br />obligations under Section 7.1 or Section 7.2, the Surety shall indemnify the Claimant for the reasonable attorney's
<br />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
<br />fees provided under Section 7.3, and the amount of this Bond shall be credited for any payments made in good faith
<br />by the Surety.
<br />§ 9 Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the performance
<br />of the Construction Contract and to satisfy claims, if any, under any construction performance bond. By the
<br />Contractor furnishing and the Owner accepting this Bond, they agree that all funds earned by the Contractor in the
<br />performance of the Construction Contract are dedicated to satisfy obligations of the Contractor and Surety under this
<br />Bond, subject to the Owner's priority to use the funds for the completion of the work.
<br />snit.
<br />AIA Document A312Im — 2010. The American Ins4tute of Architects.
<br />6
<br />
|