Bond Surety Agreement

Bond Surety Agreement

This Bond Surety Agreement (the Agreement) is made as of Date: by and between Surety Name: , formed under the laws of , and Indemnitor Name: , formed under the laws of (each a Party and collectively the Parties).

Recitals

WHEREAS, Obligee: has required a bond in favor of the Obligee for the performance and obligations of Principal under certain underlying obligations identified by Bond Number: and dated , in the penal sum of $ (the Bond);

WHEREAS, Surety has executed or may execute one or more bonds, undertakings, or other instruments (collectively, the Bonds) on behalf of Principal for the benefit of the Obligee; and

WHEREAS, Indemnitor acknowledges that Surety's execution of the Bonds creates potential contingent liabilities for Surety, and Indemnitor desires to indemnify and hold Surety harmless on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the issuance or continued issuance of the Bonds by Surety and the mutual promises contained herein, the Parties agree as follows:

1. Definitions

1.1 "Bond" means any bond, undertaking, indemnity, or other guaranty executed by Surety for the benefit of an Obligee at the request of or for the account of Principal or Indemnitor, including without limitation the Bond identified in the Recitals.

1.2 "Losses" means all losses, liabilities, damages, demands, claims, expenses, payments, judgments, fines, penalties, interest, court costs and reasonable attorneys' fees (including appeals) incurred by Surety in connection with the Bonds or this Agreement.

2. Indemnity and Reimbursement

2.1 Indemnity. Indemnitor shall indemnify, defend and hold harmless Surety from and against any and all Losses which Surety incurs arising from or relating to the Bonds, including Losses arising from Surety's execution, investigation, enforcement, payment, settlement or defense of claims under any Bond, whether or not Surety has incurred liability on account of any Bond.

2.2 Reimbursement. Upon demand by Surety, Indemnitor shall promptly reimburse Surety for all Losses paid or incurred by Surety, together with interest from the date of payment by Surety at the lesser of the maximum lawful rate or a rate of .

3. Collateral and Security

3.1 Security Interest. To secure Indemnitor's obligations hereunder, Indemnitor grants to Surety a continuing first-priority security interest in all present and future accounts, chattel paper, instruments, inventory, equipment, general intangibles, cash and other property of Indemnitor (the Collateral). Indemnitor shall execute and deliver to Surety financing statements and other documents as requested by Surety to perfect such security interest.

3.2 Cash and Other Collateral. Surety may require deposit of cash or letters of credit as additional security. Indemnitor shall promptly provide such collateral upon demand.

4. Surety's Rights and Remedies

4.1 Exoneration, Payment and Subrogation. Surety may, at its option, perform, satisfy, defend, settle or otherwise discharge any Bond or claim thereunder without first exhausting any remedy against Principal or Indemnitor. Any payment made by Surety shall be recoverable from Indemnitor as provided herein. Surety shall be subrogated to all rights of recovery of the Obligee and Principal to the extent of payments made by Surety.

4.2 Independent Remedies. All remedies of Surety under this Agreement are cumulative and may be exercised concurrently or separately, at law or in equity. Surety's exercise of any remedy shall not waive any other remedy.

5. Claims Handling; Settlement

5.1 Surety's Control. Surety shall have the right, at its sole discretion, to investigate, defend, compromise or pay any claim or demand under any Bond. Indemnitor shall not, without Surety's prior written consent, settle or compromise any claim that would affect Surety's rights or obligations.

5.2 Reservation of Rights. Nothing in this Agreement shall require Surety to take any action or to pay any amount except as the Surety in its sole judgment deems necessary or appropriate.

6. Payment of Premiums and Expenses

6.1 Premiums. Indemnitor shall pay all premiums, fees and charges due to Surety for issuance and maintenance of any Bond as invoiced by Surety. Failure to pay premiums when due shall constitute an event of default under this Agreement.

6.2 Expenses. Indemnitor shall reimburse Surety for all expenses incurred in the investigation, prosecution or defense of any claim, enforcement of this Agreement, or preservation of Surety's rights, including reasonable attorneys' fees and costs.

7. Representations and Warranties

Indemnitor represents and warrants that (a) it has full power and authority to enter into and perform this Agreement; (b) the execution and delivery of this Agreement and performance will not conflict with any other agreement or law; and (c) all information furnished to Surety in connection with this Agreement and the Bonds is true, complete and accurate in all material respects.

8. Events of Default

8.1 Events of Default include failure to reimburse Surety on demand, failure to provide required collateral, insolvency, dissolution, assignment for benefit of creditors, or any material breach of this Agreement. Upon an Event of Default, Surety may declare all Obligations of Indemnitor immediately due and payable and exercise all rights and remedies available at law or in equity.

9. Subrogation; Assignment

9.1 Subrogation. Upon payment by Surety of any Losses, Surety shall be subrogated to all rights of recovery of the Obligee, Principal and Indemnitor to the extent of such payment, and Indemnitor shall execute and deliver all documents necessary to secure and enforce such subrogation rights.

9.2 Assignment. Surety may assign its rights under this Agreement without the consent of Indemnitor. Indemnitor shall not assign its rights or obligations without Surety's prior written consent.

10. Notices

All notices, demands and communications under this Agreement shall be in writing and delivered by personal delivery, nationally recognized overnight courier, or certified mail, return receipt requested, to the addresses set forth below or to such other address as a Party may designate by written notice to the other Party.

11. Governing Law; Venue

This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to its conflicts of law principles. The Parties submit to the exclusive jurisdiction of the state and federal courts located in that state for resolution of disputes arising under this Agreement.

12. Attorneys' Fees and Costs

In the event of any action to enforce this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees, costs and expenses incurred, including fees on appeal and collection.

13. Entire Agreement; Amendments; Severability; Waiver

13.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

13.2 Amendments. No amendment or modification of this Agreement will be effective unless in writing and signed by the Party against whom enforcement is sought.

13.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

13.4 Waiver. No failure or delay by Surety in exercising any right shall operate as a waiver of such right, and any waiver must be in writing.

14. Counterparts; Execution

This Agreement may be executed in any number of counterparts, each of which when executed shall be deemed an original and all of which together shall constitute one instrument. Signatures transmitted by facsimile or electronic image shall be binding.

15. Miscellaneous

The obligations of Indemnitor under this Agreement are primary, continuing and unconditional and shall survive the termination or expiration of any Bond or any release or substitution of collateral or other security.

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