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1 1 the Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, <br />successors and assigns to the Owner to pay for labor, materials and equipment furnished for use in the performance of <br />the 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 or <br />equipment furnished for use in the performance of the Construction Contract, then the Surety and the Contractor shall <br />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) of <br />claims, demands, liens or suits against the Owner or the Owner's property by any person or entity seeking payment for <br />labor, materials or equipment furnished for use in the performance of the Construction Contract and tendered defense of <br />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 party to whom the materials were, or equipment was, furnished or supplied or for <br />whom the labor was done or performed, within ninety (90) days after having last performed labor or last furnished <br />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, stating <br />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 constitute <br />a waiver of defenses the Surety or Contractor may have or acquire as to a Claim, except as to undisputed amounts for <br />which the Surety and Claimant have reached agreement. If, however, the Surety fails to discharge its obligations under <br />Section 7.1 or Section 7.2, the Surety shall indemnify the Claimant for the reasonable attorney's fees the Claimant incurs <br />thereafter to recover any sums found to be due and owing the Claimant. <br />The language in this document conforms to the language used in A/A Document A312 -- 2010. Form 15-02-0574 FED (rev. 7-10)