Legal Bond Amounts Form

LEGAL BOND AMOUNTS FORM

This Legal Bond Amounts Form is made effective as of by and between Principal Name: with Principal Address: , and Surety Name: with Surety Address: .

Recitals

WHEREAS, Principal desires to obtain surety bonds to secure performance and payment obligations arising from certain contracts, projects or statutory obligations described herein; and

WHEREAS, Surety is authorized and willing to issue bonds on behalf of Principal subject to the terms, conditions and indemnities set forth in this Form; and

WHEREAS, the parties desire to set forth agreed bond amounts, premiums, notice procedures and remedies related to such bonds.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties agree as follows.

1. Definitions

1.1 "Bond" means any surety bond, undertaking, maintenance bond, performance bond, payment bond, or other instrument issued by Surety for the benefit of an Obligee to secure the obligations of Principal under a contract, statute or court order.

1.2 "Bond Amount" means the penal sum or maximum liability of Surety under an individual Bond as set forth in the Bond Schedule below.

2. Bond Schedule and Amounts

The parties agree that the initial schedule of Bonds to be issued or endorsed by Surety on behalf of Principal shall be recorded as follows. Additional bonds may be added consistent with Section 6 (Adjustments) and upon execution of any required underwriting documents.

3. Adjustment of Bond Amounts

3.1 Bond Amounts specified in Section 2 may be increased or decreased by written endorsement signed by Surety and Principal. Any increase in a Bond Amount shall be subject to additional premium calculated in accordance with Surety's established premium schedule and accepted underwriting criteria.

3.2 No increase to Surety's penal liability shall be effective until Surety has provided written consent and any required collateral or indemnity is delivered.

4. Premiums and Payment

4.1 Principal shall pay all premiums, fees and costs due for issuance and maintenance of each Bond in advance or as otherwise agreed in writing. Failure to pay premiums when due constitutes a material breach entitling Surety to suspend performance or terminate coverage as permitted by law and this Form.

4.2 Premium payments are non-refundable except to the extent required by applicable law or agreement between the parties; any refund shall be subject to deduction for administrative expenses and claim reserves.

5. Claims, Investigation and Payment

5.1 Upon receipt of a claim under any Bond, Surety shall have the right to investigate the claim and to require reasonable proof of loss. Surety may, at its discretion, pay, compromise or contest any claim in good faith. Payment by Surety shall not waive any rights of subrogation or indemnity against Principal.

5.2 Principal shall promptly reimburse Surety for all sums paid by Surety under any Bond, together with interest at the lesser of the maximum rate permitted by law or 1.5% per month from the date of payment until repaid, and all costs of collection including attorneys' fees.

6. Indemnity and Subrogation

6.1 Principal agrees to defend, indemnify and hold harmless Surety from and against any and all liability, loss, cost, damage, expense, attorneys' fees, and disbursements arising out of or related to the issuance or enforcement of any Bond, including claims asserted by third parties or by the Obligee.

6.2 Upon paying any claim or incurring any expense under a Bond, Surety shall be subrogated to all rights of the Obligee or claimant and may pursue all remedies on its own behalf.

7. Notices

All notices, requests, demands and other communications required or permitted under this Form shall be in writing and delivered by hand, 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 others.

8. Term and Termination

8.1 This Form shall remain in effect until all Bonds previously issued or endorsed hereunder have expired, been satisfied, or been replaced by other security acceptable to Surety, or until earlier terminated by written agreement of the parties.

8.2 Surety may suspend issuance of additional Bonds or decline to renew or extend existing Bonds in the event of nonpayment of premiums, insolvency of Principal, material misrepresentation, or other material breach by Principal.

9. Governing Law; Venue

This Form shall be governed by and construed in accordance with the laws of the jurisdiction where the primary risk is located, without regard to principles of conflicts of law. Venue for any action arising out of this Form shall be in the state or federal courts located in that jurisdiction.

10. Entire Agreement; Severability; Amendments; Waiver; Counterparts

10.1 This Form, together with any endorsements, collateral agreements, and schedules referenced herein, constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior negotiations and agreements.

10.2 If any provision of this Form is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

10.3 Any amendment to this Form must be in writing and signed by authorized representatives of Principal and Surety. Failure to enforce any provision shall not constitute a waiver of that provision or the right to enforce it later.

11. Miscellaneous Provisions

11.1 Principal represents and warrants that the information provided to Surety in connection with underwriting is true, complete and accurate. Principal shall promptly notify Surety of any material change in financial condition or business operations that could affect Surety's exposure.

11.2 The obligations of Principal under this Form are primary and independent of any obligation of any other person or entity, and shall survive termination or expiration of any individual Bond to the extent necessary to satisfy liabilities incurred while a Bond was in force.

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