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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 famished for use in the <br /> performance of the Construction Contract, which is Incorporated herein by reference, subject to the following <br /> 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, <br /> materials or equipment furnished for use in the performance of the Construction Contract,then the Surety and the <br /> Contractor shall have no obligation under this Bond. <br /> 3. If them is no Owner Default under the Consttucton Contract,the Surety's obligation to the Owner tinder this Bond <br /> shall arise after the Owner has promptly notified the Contractor and the Surety(at the address described in Section <br /> 13)of claims,demands,liens or suits against the Owner or the Ownees property by any person or entity seeking <br /> payment for labor,materials or equipment furnished for use in the performance of the Construction Contract and <br /> 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 <br /> defend,indemnify and hold harmless the Owner against a duly tendered claim,demand,lien or suit. <br /> 5. The Surety's obligation 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,Amalshed or <br /> supplied or for whom the labor was done or performed, within ninety (90) days after having last <br /> performed labor or last fiumished 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 <br /> (at 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 Cialmanfs obligations to famish 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 <br /> promptly and at the Suretys expense take the fallowing actions: <br /> 7.1 Send an answer to the Claimant,with a copy to the Owner,within sixty(60)days after receipt of the <br /> Claim,stating the amounts that are undisputed and the basis for challenging any amounts that are <br /> 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 <br /> constitute a waiver of defenses the Surety or Contractor may have or acquire as to a Claim,except as to <br /> undisputed amounts for which the Surety and Claimant have reacted agreement. 14 however,the Surety <br /> fails to discharge its obligations under Section 7.1 or Section 7.2,the Surety shall indemnify the Claimant <br /> for the reasonable attorneys fees the Claimant Incurs thereafter to recover any sums found to be due and <br /> owing to the Claimant. <br /> 8. The Sumetys total obligation shall not exceed the amount of this Bond,plus the amount of reasonable attorneys <br /> fees provided under Section 7.3,and the amount of this Bond shalt be credited for any payments made in good <br /> Nth by the Surety. <br /> 9. Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the performance <br /> of the Construction Contract and to satisfy claims, if any, under any construction performance bond. By the <br /> Contractor furnishing and the Owner accepting this Bond,they agree that all funds earned by the Contractor in the <br /> t.aogasae caafanm to AIA Document A312 Payment Bond,2010 edition <br /> PAX76003ZZ0613f <br />