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<br />~ 1 The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators,
<br />successors and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein
<br />by reference,
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<br />~ 2 If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation
<br />under this Bond, except to participate in conferences as provided in Section 3,1,
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<br />~3 If there is no Owner Default, the Surety's obligation under this Bond shall arise after:
<br />~ 3.1 The Owner has notified the Contractor and the Surety at its address described in Section 10 below that the
<br />Owner is considering declaring a Contractor Default and has requested and attempted to arrange a conference with
<br />the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of
<br />performingtheConstruct,ion Contract. If the Owner, the Contractor and the Surety agree, the Contractor shall be
<br />allowed a reasonable time to perform the Construction Contract, but such an agreement shall not waive the Owner's
<br />right, if any, 'subsequently to declare a Contractor Default; and
<br />
<br />,~3.2 The Owner has, declared a Contractor Default and formally terminated the Contractor's right to complete the
<br />contract. Such Contractor Default shall not be declared earlier than twenty days after the Contractor and the Surety
<br />have received notice as provided in Section 3,1; and
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<br />~3.3The Owner has agre~dto pay the Balance of the Contract Price to the Surety in accordance with the terms of
<br />theConstructionContractpr toa contractor selected to perform the Construction Contract in accordance with the
<br />terms of the contract with the Owner.
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<br />~4 When the Owner hassapsfied the conditions of Section 3, the Surety shall promptly and at the Surety's expense
<br />take one of the following actions:
<br />~,4.1Arrange for theContractot; with consent of the Owner, to perform and complete the Construction Contract; or
<br />
<br />S 4.2 Undertake to perform and complete the Construction Contract itself, through its agents or through independent
<br />contractors; or
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<br />~:4,30btain bids, or negotiated proposals from qualified contractors acceptable to the Owner for a contract for
<br />performance and completion of the Construction Contract, arrange for a contract to be prepared for execution by the
<br />Owner and the.contraetorselectedwiththe Owner's concurrence, to be secured with performance and payment
<br />bpndsexecutedby a qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the
<br />OWner the arnountofgamagesasdescribed in Section 6 in excess of the Balance of the Contract Price incurred by
<br />the Owner resulting from the Contractor's default; or
<br />
<br />~ 4;4iWaive its right to perfop:n.:a:ng,COlliplete, arrange for completion, or obtain a new contractor and with
<br />reasonable promptness under the circumstances:
<br />.1 After investigation, determine the amount for which it may be liable to the Owner and, as soon as
<br />practicable e amount is determined, tender payment therefor to the Owner; or
<br />.2 Deny liabili whole or in part and notify the Owner citing reasons therefor.
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<br />.~ 5 If the Surety does not proceed as provided in Section 4 with reasonable promptness, the Surety shall be deemed
<br />to be in defaulton tbis Bond fifteen days after receipt of an additional written notice from the Owner to the Surety
<br />demanding thatJhe Surety perform its obligations under this Bond, and the Owner shall be entitled to enforce any
<br />remedy available, to the Owner. If the Surety proceeds as provided in Section 4.4, and the Owner refuses the
<br />payment tendered or the Surety has denied liability, in whole or in part, without further notice the Owner shall be
<br />entitled to enforce any remedy available to the Owner,
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<br />~6 After the Owner has terminated the Contractor's right to complete the Construction Contract, and if the Surety
<br />elects to act under Section 4.1, 4.2, or 4.3 above, 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
<br />Surety shall not be greater than those of the Owner under the Construction Contract. To the limit of the amount of
<br />this Bond, but subject to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and
<br />damages on the Construction Contract, the Surety is obligated without duplication for:
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<br />AlA Document A312TU -1984. Copyright @ 1984 by The American Institute of Architects. All rights reserved. WARNING: This AlAe Document Is
<br />protected by U.S, Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AlA" Document, or any portion of It, 2
<br />may resutt tn severe civil and criminal penalties, and will be prosecuted to the maxImum extent possible under the law, This document was produced
<br />by AlA software at 12:53:31 on 06/01/2005 under Order No.1000172893_1 which expires on 4/26/2006, and is not for resale.
<br />User Notes: (3398270583)
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