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Surety have received notice as provided in Sub-paragraph 3.I; and 3.3 The Owner has agreed to pay the Balance of the Contracl Price to the Surety hi accordance with the terms of the Construction Contract or to a contractor selected to perform lhe Construction Contract in accordance with the terms of the contract with tile Owimr. 4 When the Owner has satisfied the conditions of Paragraph 3, the Surety shaft promptly and al lbo Surety~s expense take one of the following actions: 4.] Arrange for the Contraclor, with consent of the Owner, to perform and complete the Conslrucfion Contrach or 4.2 Undertake Lo perform and complete lhe Construction Contract itself, through its agents or through independent contractors; or 4.3 Obtain bids or negotiated proposals fiyOlll qualified contractors acceptable to the Owner for a contract for perfonn~mce and completion of the Conslmdion Contract, arrange for a contract to be prepared for execution by the Owner and the contractor selected Mth the Owner's concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the O,~mer the amount of damages as described in Paragraph 6 in excess of the Balance et the Contract Price incurred by lhe Owner resulting from the Contractor's default; or 4.4 WaNe its right to perform and complete, arrange for comp]lotion, or obtain a new contracLor and with reasonable promplness under the chrcumstances: After invesBgaBon, detemtine the amount for which it may be fable to the Owner and, as soon as practicable after the amount is determined, lender payment therefor to the Owner; or .2 Deny liability in whole or iii part and notify the Owner citing reasons therefor. 5 If the Surety does not proceed as provided in Paragraph 4 with reasonabie prolnptness, tile Surety shall be deemed to be in defaidt on this Bond fifteen days after receipt of an addBional wrilten notice from the Owner to the Surety demanding that the Smety perfoml its obligations under this Bond, and the Owner shall be enthled to enforce any remedy available to the Owner. If the Surety proceeds as provided in Subparagraph 4.4, and lhe Owner rofttses lhe peyxnent lendered or the Surety has denied liability, in whole or in par[, without further notice the Owner shall be entitled to enforce any remedy available to the Owner. 6 Alter the Owner has lerminated the Conlractor's right to complete lhe Construction Contract, and if the Surety elects to act under Subparagraph 4.t, 4.2, or 4-3 above, then the responsibgitles of ~he Surety to the Owner shall not be greater than those of the Contractor under the Construction Contract, and the responsibilities of the Owner to the Surety shall not be greater thall those of the Owner under the Construction Contract. To the limit of the amount of this Bond, but subiect to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on the Construcllnn Contract, the Surety is obligated without drlplicafion for: 6.1 The responsibilities of the Contractor for correction of defoctNe work and completion of the ConstrucBon Contract; 6.2 Additional legal, design professional and delay costs resulting from the Contractor's De faulh and resnlfing from the actions or failure to act of the Surety under Paragraph 4; and Liquidated damages, or if no liquidated damages arc specified in the Construction Contract, actual damages caused by delayed performance or non performance of the Contractor. 7 The Surety shall not be liable to the Owner or others for obfigations of the Contractor that are unrelated to the Construction Conlrach and the Balance of the Contract Price shall not be reduced or set off on account of any such unrelated obBgations. No right of action shall accrue on this Bond to any person or entity other than the Owner or its heirs, executors, 8 The Surety hereby wanes notice of any change, including changes of thne, to the Construction Contract or to related subcontracts, purchase orders and other obligations. 9 Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent jurisdiction in the l~cation ill wbich the work or part of the work is located and shall be instituted within two years after Contractor Default or within two years after the Contractor ceased working or within two years after the Surety refuses or fails to perform its obligatimls under this Bond, whichever occurs first. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suk shah be applicable. lO Notice to the Surety, the O'amer or the Contractor shall be mailed or dehvered to the addres; shown on the signature page. 11 When this Bond has been furnished to comply with a statutes' or other legal requirement in the l~ation where the construction was Lo be performed, any provision in this Bond conflictkng wilh said statutory or legal requirement shall be deemed deleted here from and provisions conforming lo such statuto~ or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall ~e construed as a statutory bond and not as a common law bond. 12 DEFINITIONS © 1984 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, NW., WASHINGTON, D.C 20<g06 5292. AIA DOCUMENT A312 ·