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The Contractor and Surety, jointly and severally, bind
<br />themselves, their heirs, executors, administrators,
<br />successors, and assigns to the Owner to pay for labor,
<br />materials, and equipment furnished for use in the
<br />performance of the Construction Contract, which is
<br />incorporated herein by reference, subject to the following
<br />terms.
<br />2. If the Contractor promptly makes payment of all sums due to
<br />Claimants, and defends, indemnifies, and holds harmless the
<br />Owner from claims, demands, liens, or suits by any person or
<br />entity seeking payment for labor, materials, or equipment
<br />furnished for use in the performance of the Construction
<br />Contract, then the Surety and the Contractor shall have no
<br />obligation under this Bond.
<br />3. If there is no Owner Default under the Construction Contract,
<br />the Surety's obligation to the Owner under this Bond shall
<br />arise after the Owner has promptly notified the Contractor
<br />and the Surety (at the address described in Paragraph 13) of
<br />claims, demands, liens, or suits against the Owner or the
<br />Owner's property by any person or entity seeking payment
<br />for labor, materials, or equipment furnished for use in the
<br />performance of the Construction Contract, and tendered
<br />defense of such claims, demands, liens, or suits to the
<br />Contractor and the Surety.
<br />4. When the Owner has satisfied the conditions in Paragraph 3,
<br />the Surety shall promptly and at the Surety's expense
<br />defend, indemnify, and hold harmless the Owner against a
<br />duly tendered claim, demand, lien, or suit.
<br />5. The Surety's obligations to a Claimant under this Bond shall
<br />arise after the following:
<br />satisfy a Claimant's obligation to furnish a written notice of
<br />non-payment under Paragraph 5.1.1.
<br />7. When a Claimant has satisfied the conditions of Paragraph
<br />5.1 or 5.2, whichever is applicable, the Surety shall promptly
<br />and at the Surety's expense take the following actions:
<br />7.1 Send an answer to the Claimant, with a copy to the
<br />Owner, within sixty (60) days after receipt of the
<br />Claim, stating the amounts that are undisputed and
<br />the basis for challenging any amounts that are
<br />disputed; and
<br />7.2 Pay or arrange for payment of any undisputed
<br />amounts.
<br />7.3 The Surety's failure to discharge its obligations under
<br />Paragraph 7.1 or 7.2 shall not be deemed to
<br />constitute a waiver of defenses the Surety or
<br />Contractor may have or acquire as to a Claim, except
<br />as to undisputed amounts for which the Surety and
<br />Claimant have reached agreement. If, however, the
<br />Surety fails to discharge its obligations under
<br />Paragraph 7.1 or 7.2, the Surety shall indemnify the
<br />Claimant for the reasonable attorney's fees the
<br />Claimant incurs thereafter to recover any sums found
<br />to be due and owing to the Claimant.
<br />The Surety's total obligation shall not exceed the amount of
<br />this Bond, plus the amount of reasonable attorney's fees
<br />provided under Paragraph 7.3, and the amount of this Bond
<br />shall be credited for any payments made in good faith by the
<br />Surety.
<br />9. Amounts owed by the Owner to the Contractor under the
<br />5.1 Claimants who do not have a direct contract with the
<br />Construction Contract shall be used for the performance of
<br />Contractor,
<br />the Construction Contract and to satisfy claims, if any, under
<br />any construction performance bond. By the Contractor
<br />5.1.1 have furnished a written notice of non-
<br />furnishing and the Owner accepting this Bond, they agree
<br />payment to the Contractor, stating with
<br />that all funds earned by the Contractor in the performance
<br />substantial accuracy the amount claimed
<br />of the Construction Contract are dedicated to satisfy
<br />and the name of the party to whom the
<br />obligations of the Contractor and Surety under this Bond,
<br />materials were, or equipment was, furnished
<br />subject to the Owner's priority to use the funds for the
<br />or supplied or for whom the labor was done
<br />completion of the work.
<br />or performed, within ninety (90) days after
<br />having last performed labor or last furnished
<br />10. The Surety shall not be liable to the Owner, Claimants, or
<br />materials or equipment included in the
<br />others for obligations of the Contractor that are unrelated to
<br />Claim; and
<br />the Construction Contract. The Owner shall not be liable for
<br />the payment of any costs or expenses of any Claimant under
<br />5.1.2 have sent a Claim to the Surety (at the
<br />this Bond, and shall have under this Bond no obligation to
<br />address described in Paragraph 13).
<br />make payments to or give notice on behalf of Claimants, or
<br />otherwise have any obligations to Claimants under this Bond.
<br />5.2 Claimants who are employed by or have a direct
<br />contract with the Contractor have sent a Claim to the
<br />11. The Surety hereby waives notice of any change,
<br />Surety (at the address described in Paragraph 13).
<br />including changes of time, to the Construction
<br />6. If a notice of non-payment required by Paragraph 5.1.1 is
<br />given by the Owner to the Contractor, that is sufficient to
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