Performance Warranty Bond

PERFORMANCE WARRANTY BOND

This Performance Warranty Bond ("Bond") is made as of by and between Obligee: with address , Principal: with address , and Surety: with address .

RECITALS

WHEREAS, Principal has entered into a written contract with Obligee identified as Contract No. dated (the "Contract") for: ;

WHEREAS, the Contract requires that Principal furnish a bond guaranteeing the repair or correction of defects discovered during the warranty period and guaranteeing the performance of warranty obligations as specified therein;

WHEREAS, Surety has agreed to issue this Bond in consideration of the obligations of Principal and for the benefit of Obligee to secure performance of the warranty obligations described in the Contract;

NOW, THEREFORE

The parties agree as follows:

1. BOND AMOUNT

The penal sum of this Bond is (the "Bond Sum"), which constitutes the maximum aggregate liability of the Surety under this Bond.

2. WARRANTY PERIOD AND SCOPE

Principal and Surety jointly and severally warrant to Obligee that Principal shall repair, replace or correct, at Principal's expense, any defects in materials, equipment or workmanship arising under the Contract that become evident within from the date of final acceptance of the Contract Work by Obligee (the "Warranty Period"). This warranty encompasses latent and patent defects to the extent required by the Contract and applicable law.

3. SURETY OBLIGATION

If Principal fails to commence and diligently pursue correction of any warranted defect within a reasonable time after receipt of written notice from Obligee in accordance with Section 6, Surety shall, upon written demand by Obligee, perform or cause performance of the required corrective work up to the Bond Sum or, at the election of Obligee, pay to Obligee the reasonable cost of such corrective work, not to exceed the Bond Sum. Surety's liability under this Bond shall not exceed the Bond Sum.

4. CLAIM PROCEDURE

Claims under this Bond must be delivered in writing to Principal and Surety at the addresses shown below and must include a description of the defect, the date discovered, and a reasonable estimate of the cost to correct. Principal shall have a period of to commence corrective action after receipt of the notice. If Principal does not commence corrective action within that period or fails to proceed diligently, Obligee may pursue remedies against Surety as provided herein.

5. NOTICE ADDRESSES

6. DURATION, CANCELLATION, AND RELEASE

This Bond shall remain in full force and effect throughout the Warranty Period and until Obligee has accepted in writing the completion of any corrective work or the expiration of all applicable warranty obligations under the Contract. Surety may not cancel or terminate this Bond during the Warranty Period except upon 30 days' prior written notice to Obligee and Principal and only to the extent permitted by the Contract; such cancellation shall not relieve Surety of liability for defects that arose prior to the effective date of cancellation.

7. LIMITATION OF LIABILITY; SUBROGATION

Surety's total aggregate liability under this Bond shall be limited to the Bond Sum, except where greater liability is expressly required by law. Upon payment by Surety of any sums under this Bond, Surety shall be subrogated to all rights of Obligee against Principal to the extent of such payment. Nothing in this Bond shall be construed to waive any defenses available to Principal under the Contract or applicable law, except as expressly provided herein.

8. REMEDIES CUMULATIVE

All remedies available to Obligee under this Bond are cumulative and may be pursued serially or concurrently. Pursuit of one remedy shall not be deemed an election of remedies to the exclusion of others unless expressly stated in writing by Obligee.

9. NOTICES

All notices, demands or communications required or permitted under this Bond shall be in writing and shall be deemed delivered upon personal delivery, or three days after deposit in the United States mail, postage prepaid, certified or registered, addressed to the parties at the addresses set forth above or such other address as a party may designate by written notice pursuant to this provision.

10. GOVERNING LAW

This Bond shall be governed by and construed in accordance with the laws of the state where the Contract Work is located, without regard to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the courts located in that state for any dispute arising under this Bond.

11. ENTIRE AGREEMENT; SEVERABILITY

This Bond, together with the Contract referenced herein, constitutes the entire agreement among the parties with respect to the subject matter and supersedes all prior understandings and agreements, written or oral. If any provision of this Bond is held invalid or unenforceable, the remainder of the Bond will remain in full force and effect.

12. AMENDMENTS; WAIVER; COUNTERPARTS

No amendment, modification or waiver of any provision of this Bond shall be effective unless in writing and signed by the party against whom enforcement is sought. Failure to enforce any right shall not be deemed a waiver of that right. This Bond may be executed in counterparts, each of which shall be an original and all of which together shall constitute one instrument.

13. CERTIFICATIONS

Principal and Surety hereby certify that the individuals signing below are authorized to execute this Bond on behalf of the respective parties and that the parties agree to be bound by its terms.

ADDITIONAL INFORMATION

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