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Article 42. STATE'S RIGHTS TO TERMINATE THE CONTRACT <br /> A. General <br /> If the CONTRACTOR should be adjudged as bankrupt, or if he should make a general assignment <br /> for the benefit of his creditors, or if a receiver should be appointed to take over his affairs, or if he <br /> should fail to prosecute his work with due diligence and carry the work forward in accordance with <br /> his work schedule and the time limits set forth in the Contract Documents, or if he should fail to <br /> subsequently perform one or more of the provisions of the Contract Documents to be performed by <br /> him, the Principal Representative may serve Written Notice on the CONTRACTOR and the Surety <br /> on his performance and payment bonds, stating his intention to exercise one of the remedies <br /> hereinafter set forth and the grounds upon which the Principal Representative bases his right to <br /> exercise such remedy. In such event, unless the matter complained of is satisfactorily cleared <br /> within ten (10) days after serving such Notice, the Principal Representative may, without prejudice <br /> to any other right or remedy, exercise one of such remedies, at once. <br /> B. Conditions and Procedures <br /> (a) The Principal Representative may terminate the services of the CONTRACTOR, which <br /> termination shall take effect immediately upon serving notice to the CONTRACTOR and his <br /> Surety, whereupon the Surety shall have the right to take over and perform the Contract. If <br /> the Surety does not commence performance of the Contract within ten (10) days after <br /> service of the notice of termination, the Principal Representative may take over the work, <br /> take possession of and use all materials, tools, equipment and appliances on the premises <br /> and prosecute the work to completion by such means as he shall deem best. In the event <br /> of such termination of his service, the CONTRACTOR shall not be entitled to any further <br /> payment under his contract until the work is completed and accepted. If the Principal <br /> Representative takes over the work and if the unpaid balance of the contract price exceeds <br /> the cost of completing the work, including compensation for any damages or expenses <br /> incurred by the Principal Representative through the default of the CONTRACTOR, such <br /> excess shall be paid to the CONTRACTOR. If, however, the cost, expenses and damages <br /> as certified by the Principal Representative exceed such unpaid balance of the contract <br /> price, the CONTRACTOR and his Surety shall pay the difference to the Principal <br /> Representative. <br /> (b) The Principal Representative may take control of the work and either make good the <br /> deficiencies of the CONTRACTOR or direct the activities of the CONTRACTOR in doing so, <br /> employing such additional help as the Principal Representative deems advisable. In such <br /> event the Principal Representative shall be entitled to collect from the CONTRACTOR and <br /> his Surety, or to deduct from any payment then or thereafter due the CONTRACTOR, the <br /> costs incurred in having such deficiencies made good and any damages or expenses <br /> incurred through the default of the CONTRACTOR, provided the Principal Representative <br /> approves the amount thus charged to the CONTRACTOR. <br /> (c) The Principal Representative may require the Surety on the CONTRACTOR'S bond to take <br /> control of the work at once and see to it that all the deficiencies of the CONTRACTOR are <br /> made good, with due diligence. As between the Principal Representative and the Surety, <br /> the cost of making good such deficiencies shall all be borne by the Surety. If the Surety <br /> takes over the work, either upon termination of the services of the CONTRACTOR or upon <br /> instructions from the Principal Representative to do so, the provisions of the Contract <br /> Documents shall govern in respect of the work done by the Surety, the Surety being <br /> substituted for the CONTRACTOR as to such provisions, including provisions as to <br /> payment for the work and provisions of this Article as to the right of the Principal <br /> Representative to do the work or take control of the work. <br /> Colorado Division of Reclamation, Mining and Safety <br /> Page 15 of 22 Pages <br /> Revised: 7/18/2018 <br />