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§ 1 ]he Contractor and Surety, jointly and severa lly, bind themselves, their heirs, executurs, administrators, successors and assigns to the Owner to
<br />pay for labor, materials and equipment furnished for use in the performance of the Construction Contract, which is incorporated herein by reference,
<br />subject to the following terms.
<br />§ 2 If the Contractor promptly makes payment of all sums due to Claimants, and defends, indemnifies and holds harmless the Owner front claims,
<br />demands, liens or suits by any person or entity seeking payment for labor, materials or equipment furnished for use in the performance of the
<br />Construction Contract, then the Surety and the Contractor 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 Owne, under this Bond shall arise after the Owner
<br />has promptly notified the Contractor and the Surety (at the address described in Section 13) of claims, demands, liens or suits against the Owner or
<br />the Owners property by any person or entity seeking payment for labor, materials or equipment furnished for use in the perfonnance of the
<br />Construction Contract and tendered 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 defend, indcmrdfy and hold
<br />harmless the Owner against a duty 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 famished a written notice of non - payment to the Contractor, staling with substantial accuracy the amount claimed and the
<br />name of the party to whom the materials were, or equipment was, fumishcd or supplied or for whom the labor was done or
<br />performed, within ninety (90) days after having last performed labor or last furnished materials or equipment included in the Claim;
<br />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 contact with the Contractor, have sent a Claim to the Surety (at the address described in
<br />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 satisfy a Cluimants obligation
<br />to furnish a written notice ofnon- 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 promptly and ut the Surety's
<br />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, stating the amounts that are
<br />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 constitute a waiver of defenses the
<br />Surety or Contractor may have or acquire as to a Claim, except as to undisputed amounts for which the Surety and Claimant have reached agreement.
<br />If, however, the Surety fails to discharge its obligations under Section 7.1 or Section 7.2, the Surety shall indemnify the Claimant for the reasonable
<br />altumey's 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 orreasonable attomey's fees provided under Section 7.3,
<br />and the amount of this Bond shall be credited for any payments made in good faith by the Surety.
<br />§ 9 Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the performance of the Construction Contract
<br />and to satisfy claims, if any, under any construction performance bond. By the Contractor furnishing and the Owner accepting this Bond, they agree
<br />that all funds earned by the Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of the Contactor and
<br />Surety under this Bond, subject to the Owner's priority to use the funds for the completion of the work.
<br />5- 2149/AS 8/10
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