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§ 1 The Contractor and Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to the Owner
<br />for the performance of the Construction Contract, which is incorporated herein by reference.
<br />§ 2 I the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this Bond, except when
<br />applicable to participate in a conference as provided in Section 3.
<br />§ 3 if there is no Owner Default tinder the Construction Contract, the Surety's obligation under this Bond shall arise after
<br />.1 The Owner fust provides notice to the Contractor and the Surety that the Owner is considering declaring a Contractor Default.
<br />Such notice shall indicate whether the Owner is requesting a conference among the Owner, Contractor and Surety to discuss the
<br />Contractor's performance. If the Owner does not request a conference, the Surety may, within five (5) business days after receipt
<br />of the Owner's notice, request such a conference. If the Surety timely requests a conference, the Owner shall attend. Unless the
<br />Owner agrees otherwise, any conference requested under this Section 3.1 shall be held within ten (10) business days of the
<br />Surety's receipt of the Owner's notice. If the Owner, the Contractor and the Surety agree, the Contractor shall be alloweda
<br />reasonable time to perform the Construction Contract, but such an agreement shall not waive the Owner's right, if any,
<br />subsequently to declare a Contractor Default;
<br />.2 The Owner declares a Contractor Default, terminates the Construction Contract and notifies the Surety; and
<br />.3 The Owner has agreed to pay the Balance of the Contract Price in accordance with the terms of the Construction Contract to
<br />the Surety or to a contractor selected to perform the Construction Contract.
<br />§ 4 Failure on the part of the Owner to comply with the notice requirement in Section 3.1 shall not constitute a failure to comply with a
<br />condition precedent to the Surety's obligations, or release the Surety from its obligations, except to the extent the Surety demonstrates actual
<br />prejudice.
<br />§ 5 when the Owner has satisfied the conditions of Section 3, the Surety shall promptly and at the Surety's expense take one of the following
<br />actions:
<br />§ 5.1 Arrange for the Contractor, with the consent of the Owner, to perform and complete the Construction Contract;
<br />§ 5.2 Undertake to perform and complete the Construction Contract itself, through its agents or independent contractors;
<br />§ 5.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner fora contract for performance and completion of
<br />the Construction Contract, artangc for a contract to be prepared for execution by the Owner and a contractor selected with the Owner's
<br />concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the
<br />Construction Contract, and pay to the Owner the amount of damages as described in Section 7 in excess of the Balance of the Contract Price
<br />incurred by the Owner as a result of the Contractor Default; or
<br />§ 5.4 Waive its right to perform and complete, artange for completion, or obtain a new contractor and with reasonable promptness under the
<br />circumstances:
<br />.1 After investigation, determine the amount for which it may be liable to the Owner and., as soon as practicable after the amount is
<br />determined, make payment to the Owner; or
<br />.2 Deny liability in whole or in part and notify the Owner, citing the reasons for denial.
<br />6 If the Surety does not proceed as provided in Section 5 with reasonable promptness, the Surety shall be deemed to be in default on this Bond
<br />seven days after receipt of an additional written notice from the Owner to the Surety demanding that the Surety perform its obligations under
<br />this Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety proceeds as provided in Section 5.4, and
<br />the Owner refuses the payment or the Surety has denied liability, in whole or in part, without further notice the Owner shall be entitled to
<br />enforce any remedy available to the Owner.
<br />§ 7 if the Surety elects to act under Section 5.1, 5.2 or 5.3, then the responsibilities of the Surety to the Owner shall not be greater than those of
<br />the Contractor under the Construction Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of the
<br />Owner under the Construction Contract. Subject to the commitment by the Owner to pay the Balance of the Contract Price, the Surety is
<br />obligated, without duplication, for
<br />.1 The responsibilities of the Contractor for correction of defective work and completion of the Construction Contract;
<br />By arrangement with the American Institute of Architects, the National Association of Surety Bond Producers
<br />(NASBP) (www.nasbp.or) makes this form document available to its members, affiliates, and associates in
<br />t Microsoft Word format for use in the regular course of surety business. NASBP vouches that the original text of
<br />this document conforms exactly to the text in AIA Document A312-2010, Performance Bond and Payment
<br />Bond. Subsequent modifications may be made to the original text of this document by users, so careful review of
<br />its wording and consultation with an attorney are encouraged before its completion, execution or acceptance.
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