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Tax2013B-CS160203 (2) Qfl P Int Risk Solutions, Inc. February 3, 2016 Jamie Brierton jbrierton@coppelltx.gov City of Coppell 816 S. Coppell Road Coppell, TX 75019 Re: Principal: CD Builders, Inc. Obligee: City of Coppell Surety: Endurance Reinsurance Corporation of America Project: Edgewood Drive &Highland Meadow Circle Bond No.: 1301158000145 Dear Mr. Brierton: On Point Risk Solutions Inc. ("OPRS")has been retained by Endurance Reinsurance Corporation of America(the "Surety")to review and evaluate claims and/or potential claims received against its surety bonds. The Surety provided payment and performance bonds for CD Builders, Inc., ("Principal") in connection with the above referenced Project. The Surety has been notified or has otherwise been made aware of claims or potential claims applicable to the bonds on the Project. Based upon the Surety's equitable right of subrogation and its express rights under a written indemnity agreement between itself and Principal("GIA")the entire contract balance on the Project is subject to the Surety's equitable lien, as well as, among other things,the assignment provision of the attached GIA and applicable law. A copy of the GIA is enclosed for your reference. Pursuant to its legal and equitable rights,the Surety hereby demands no further funds be released to the Principal in connection with the Project, including any progress payments, retainage or additional claim amounts,without the advanced written consent and direction of Surety. This demand is made to protect the Surety's rights of assignment and subrogation and to enable it to protect its interests under the bonds that it issued for the Project. Your failure to comply with this demand may prejudice the interests of Surety, and result in serious legal consequences. This correspondence and all prior or subsequent communications and investigative efforts are made with the express reservation of all rights and defenses that Surety and Principal has or may have at law, equity or under the terms and provisions of the bond and the contract documents for the Project. 11455 El Camino Real, San Diego CA 92130 - 855.429.3665 - www.onpointrisk.com City of Coppell • February 3,2016 Page 2 of 2 If you have any questions regarding this notice,please contact the undersigned as soon as possible. Thank you for your anticipated cooperation with this matter. Sincerely, ( 11 Russell Fuller Surety Claims Director On Point Risk Solutions Rfuller@onpointrisk.com (860) 413-3525 RWF/jm Cc: CD Builders, Inc. Indemnitors Enclosures: GIA annomormaamonommallsoolloonllIr • ' tr•1 MAITRE PRAICO INSI RANCI;COMPANY r„l l'O BOX 7011 SAN JUAN.PR 0091(41111 :I ' BONDING DEPARTMENT Num Rcgistro(File SI):201000474.4_ )X 70333 SAN JUAN PR 00936-8333 C1 42EEMENT OF INDEMNITY tr, This Agreement of Indemnity (hereinafter called"Agreement") is made AUGUST (day) 5 2010 by CD BUILDERS INC.-HC 2 BOX 14740 GURABO PR 00778 (Insert full name and address of PRINCIPAL) U1 as PRINCIPAL and BUILDERS HOLDING CO.,CORP./CDC MAINTENANCE GROUP,CORP.—11C 2 BOX 14740 GURABO PR 00778 ISMAEL CARRASQUILLO SANCHEZ&YAMILLETE E.IRIZARRY RIVERA-I-IC 2 BOX 14740 GURABO PR 00778 ( (Insert full name and addresses of INDEMNITOR) as INDEMNITORS, MAPFRE PRAICO Insurance Company; MAPFRE Pan American Insurance Company, MAPFRE Preferred Risk Insurance Company, XL Reinsurance America, Inc., Swiss Reinsurance America Corp., Swiss Reinsurance Corp.,and/or Endurance Reinsurance Corporation of America as SURETY. WHEREAS, PRINCIPAL, in the performance of contract and the fulfillment of obligations generally, whether solely in its own name or as co-venturer with others,may desire or be required to give or procure certain BONDS;and i WHEREAS, at the request of PRINCIPAL and INDEMNITORS and upon the express understanding that this Agreement should be given, SURETY has executed or procured to be executed, and may from time to time hereinafter execute or procure to be executed said BONDS on behalf of PRINCIPAL;and WHEREAS, INDEMNITORS have a substantial, material and beneficial interest in the obtaining, renewing, continuing or substituting of BONDS;and WHEREAS, SURETY has relied upon and will continue to rely upon the representations of PRINCIPAL and INDEMNITORS as to their character, identity,control,beneficial ownership, financial condition and existence in executing or procuring BONDS. NOW THEREFORE, in consideration of the above stated premises,and of other good and valuable consideration, the receipt of which is hereby acknowledged, PRINCIPAL and INDEMNITORS for themselves, their heirs, executors, administrators,successors and assigns,jointly and severally, hereby covenant and agree with SURETY, its successors and assigns,as follows: DEFINITIONS I. Where they appear in this Agreement of Indemnity, the following terms are defined as set forth in this paragraph: "BOND" means an undertaking or a contract of suretyship, guaranty or indemnity or an agreement, consent or letter to provide such an undertaking or contract,and the continuation,extension,alteration renewal or substitution of such an undertaking or contract, and the continuation, extension, alteration, renewal or substitution of such an undertaking, contract, agreement,consent or letter,whether with the same or different penalties or conditions,executed or procured by SURETY. "CONTRACT” means an agreement between PRINCIPAL and a third party, together with all associated documents(including, but no limited to, general and special conditions, specifications and drawings) for which SURETY executes or procures the execution of a BOND. . Lf l BONDING DEPARTMENT PO BOX 70333 SAN JUAN PR 00936-8333 , AGREEMENT OF INDEMNITY �•a • cs This Agreement of indemnity (hereinafter called"Agreement") is made AUGUST (day) 5 2010 by CD BUILDERS INC.-HC 2 BOX 14740 GURABO PR 00778 (Insert full name and address of PRINCIPAL) F L+� as PRINCIPAL and BUILDERS HOLDING CO.,CORP./CDC MAINTENANCE GROUP,CORP. FIC 2 BOX 14740 GURABO PR 00778 ISMAEL CARRASQUILLO SANCHEZ&YAMILLETE E.IRIZARRY RIVERA-FIC 2 BOX 14740 GURABO PR 00778 tr (Insert full name and addresses of INDEMNITOR) as INDEMNITORS, MAPFRE PRAICO Insurance Company; MAPFRE Pan American Insurance Company, MAPFRE Preferred Risk Insurance Company, XL Reinsurance America, Inc., Swiss Reinsurance America Corp., Swiss Reinsurance Corp.,and/or Endurance Reinsurance Corporation of America as SURETY. i./Yk WHEREAS, PRINCIPAL, in the performance of contract and the fulfillment of obligations generally, whether solely in its own name or as co-venturer with others,may desire or be required to give or procure certain BONDS;and WHEREAS, at the request of PRINCIPAL and INDEMNITORS and upon the express understanding that this Agreement should be given, SURETY has executed or procured to be executed, and may from time to time hereinafter execute or procure to be executed said BONDS on behalf of PRINCIPAL;and WHEREAS, INDEMNITORS have a substantial, material and beneficial interest in the obtaining, renewing, continuing or substituting of BONDS;and WHEREAS, SURETY has relied upon and will continue to rely upon the representations of PRINCIPAL and INDEMNITORS as to their character,identity,control,beneficial ownership,financial condition and existence in executing or procuring BONDS. NOW THEREFORE, in consideration of the above stated premises,and of other good and valuable consideration, the receipt of which is hereby acknowledged, PRINCIPAL and INDEMNITORS for themselves, their heirs, executors, administrators, successors and assigns,jointly and severally, hereby covenant and agree with SURETY, its successors and assigns,as follows: DEFINITIONS 1. Where they appear in this Agreement of Indemnity, the following terms are defined as set forth in this paragraph: "BOND" means an undertaking or a contract of suretyship, guaranty or indemnity or an agreement, consent or letter to provide such an undertaking or contract,and the continuation,extension,alteration renewal or substitution of such an undertaking or contract, and the continuation, extension, alteration, renewal or substitution of such an undertaking, contract,agreement,consent or letter, whether with the same or different penalties or conditions, executed or procured by SURETY. "CONTRACT' means an agreement between PRINCIPAL and a third party, together with all associated documents (including, but no limited to, general and special conditions, specifications and drawings) for which SURETY executes or procures the execution of a BOND. 4111111111111111111111 4916 LE I r • "EVENT OF DEFAULT' means any one or more of the following: co (A) Any notice of default by an obligee on any BOND due to abandonment, forfeiture, breach of, or failure, refusal or inability to perform any CONTRACT or obligation contained in a BOND,whether actual or alleged; (B) Any failure,delay,refusal or inability of PRINCIPAL to pay claims;bills or other indebtedness incurred in,or in connection with the performance of any CONTRACT; (C) The failure to perform,or comply with the terms,covenants or obligations in this Agreement; Lit (D) The failure to pay or discharge,when due,all indebtedness of PRINCIPAL to SURETY; wa (E) An assignment by PRINCIPAL for the benefit of creditors, or the appointment or an application by PRINCIPAL for the appointment,of a receiver or trustee for PRINCIPAL or its property,solvent or not,or if u proceedings for the appointment of a receiver or trustee for liquidation, reorganization or arrangement of r1r PRINCIPAL shall be initiated by other persons; (F) If PRINCIPAL or INDEMNITOR is an individual, PRINCIPAL'S or INDEMNITOR'S dying, absconding, disappearing, becoming incompetent, being convicted of a felony or imprisoned, or if PRINCIPAL or INDEMNITOR is any other type of entity,any change or threat of change in the character, identity,control, arrangement,beneficial ownership or existence of PRINCIPAL or INDEMNITOR; (G) Any proceeding or the exercise of any rights by any individual or entity which deprives or impairs PRINCIPAL'S use of its plant, machinery, equipment, plans, drawings, tools, supplies or materials; or the work under the contract covered by any said bond. "PRINCIPAL means any one, combination of, or all of the named individuals, firms or corporations set forth above, including any of their present or future subsidiary corporations and any corporations,which they may now hereafter control or be affiliated with,and their successors in interest,whether acting along or in joint venture with others not named herein,including any such entity for which SURETY executes BONDS. "SURETY" means MAPFRE PRAICO Insurance Company; MAPFRE Pan American Insurance Company, MAPFRE Preferred Risk Insurance Company, XL Reinsurance America, Inc., Swiss Reinsurance America Corp., Swiss Reinsurance Corp.,and/or Endurance Reinsurance Corporation of America as SURETY. NOTICE TO SURETY OF ANTICIPATED CHANGE IN NATURE OF PRINCIPAL OR INDEMNITORS; NOTICE OF CLAIMS 2. Written notice must be given by PRINCIPAL or INDEMNITORS at the earliest practical time of any anticipated change or negotiations entered into by PRINCIPAL or INDEMNITORS for any anticipated change in the character, indemnity, control, arrangement, beneficial, ownership (including, if a corporation, ownership of !kr ()./1 more than 5%of the stock of PRINCIPAL or INDEMNITOR), or existence of PRINCIPAL or INDEMNITORS and immediately of any claim or action which may result in loss to SURETY or require SURETY to respond under its BOND. Upon receipt of said notice, Surety shall have a right of access to the books and records and other documentation and information as is more fully described in Paragraph 13 hereof. INDEMNITY AND HOLD HARMLESS 3. PRINCIPAL and INDEMNITORS shall exonerate,hold harmless,indemnified SURETY from and against any and all claims,demands and liability for losses,costs,and expenses of whatsoever kind or nature,including court costs, counsel fees, costs of investigation, and from and against any all other such losses and expenses which SURETY may sustain due to: (A) Execution or having procured the execution of BONDS; (B) Failure of PRINCIPAL or INDEMNITORS to perform or comply with any of the covenants or conditions of this Agreement; (C) Enforcement of any of the covenants or conditions of this Agreement; (D) Performance of any investigation, obtaining or attempting to obtain a release, or recovering or attempting to recover loss or unpaid bond premium in connection with any BOND; 111111/111111111111111 ri L5 • (E) Prosecution or defense of any action or claim in connection with any BOND,whether SURETY,at c''i its discretion,elect to employ its own counsel or permits or requires PRINCIPAL or INDEMNITORS to make arrangements for SURETY'S legal representation. Payment shall be made to SURETY by PRINCIPAL and INDEMNITORS as soon as liability exists or is asserted against 1 SURETY, whether or not SURETY shall have made any payment therefore. Such payment shall be equal to whatever amount SURETY, in its judgment,shall deem sufficient to protect it from loss. SURETY shall have the right to use the t t payment,or any part thereof,in payment or settlement of any liability,loss or expense for which INDEMNITORS would be 7i obligated to indemnify SURETY under the terms of this Agreement. In the even of any payment by SURETY, SURETY shall be entitled in any accounting with PRINCIPAL or INDEMNITOR(S) to reimbursement for any and all disbursements made by it in good faith in and about the matters (2 contemplated by this Agreement under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity, or expediency existed. Vouchers or other evidence of any such payments made by SURETY shall be prima facie evidence of the fact and amount of the liability to SURETY, PRINCIPAL and INDEMNITOR shall pay to SURETY interest on all disbursements made by SURETY at the maximum rate permitted by law calculated from the date of each disbursement. ASSIGNMENT 4. PRINCIPAL and INDEMNITORS hereby assign to SURETY the following rights and property as collateral to secure any and all obligations in this Agreement and any other indebtedness and liabilities of PRINCIPAL to SURETY,whether heretofore or hereafter incurred: (A) All the rights of PRINCIPAL in and arising in any manner out of any CONTRACT; (B) All the rights,title and interest of PRINCIPAL or INDEMNITORS in and to all machinery,equipment, plant, tools, inventory and materials which are now, or may hereafter be, utilized in connection with any CONTRACT, regardless of whether they are located at a construction site, in storage elsewhere, or in transit anywhere,or whether they are in the process of being manufactured; (C) All about theto rights, as be executedtitleand in conninterestectionof withPRINCIPAL any CONTRACTinandto andall insubandcontrto allcts suretyand bondspurchae writtenorders in connectionexecutedor with such subcontracts or purchase orders; t\i\ (D) All the rights, title and interest of PRINCIPAL in and to any actions, causes of action, claims or demands whatsoever which PRINCIPAL may have or acquire against any party to the CONTRACT, or actions,causes of action,claims or demands arising out of or in connection with any CONTRACT including,but not limited to, those against obligees on bonds, design professionals, subcontractors, laborers or materialmen or any person furnishing or agreeing to furnish or supply labor, material, supplies, machinery, tools, inventory or others equipment in connection with or on account of any CONTRACT and against any surety or sureties of any obligee,subcontractor,laborer or material men; (E) All moneys retained and any and all moneys that may be due or hereafter become due on account of any CONTRACT. (F) Any and all rights,title,interest in,or use of any patent,copyright or trade secret which is or may be necessary for the completion of any bonded work;and (G) All moneys due or to become due to PRINCIPAL on any policy of insurance relating to any claims arising out of the performance of any CONTRACT, including, but not limited to, claims under builder risk, fire, or employee dishonesty policies,including premium refunds. (H) The above assignment rights are in addition to and not in substitution for any other rights of SURETY arising by operation of law or otherwise. The above assignments shall be binding as of the effective date of each BOND executed by SURETY, but SURETY'S right to exercise the rights granted to it under this paragraph shall be conditioned upon the occurrence of an Event of Default. • to a-4 D SETTLEMENTS t‘,a 5. SURETY shall have the exclusive right in its name or in the name of PRINCIPAL to adjust,settle or corn- al promise any claim, counterclaim, demand, suit or judgment involving any BOND or to take whatever other action it may c`� deem necessary,expedient or appropriate. SURETY'S determination as to whether any such claim,counterclaim,demand, &:� suit or judgment should be settled or defended shall be binding and conclusive upon PRINCIPAL and INDEMNITORS. `1 The vouchers or other evidence of any such payments made by SURETY shall constitute prima facie evidence of the fact t:l and amount of the liability of PRINCIPAL and INDEMNITORS to SURETY. hi PROSECUTION OF CLAIMS 6. SURETY shall have the full and exclusive right in its name or in the name of PRINCIPAL,but riz not the obligation,to prosecute,compromise,release or otherwise resolve any of the claims,causes of action or other rights assigned to SURETY in paragraph 4 above,upon such terms as SURETY,at its discretion,shall deem appropriate. PREMIUM 7. PRINCIPAL and INDEMNITORS shall pay all premiums and charges of SURETY for the BOND and for all other policies of insurance whether procured form SURETY or from other insurance companies. The failure of PRINCIPAL or INDEMNITORS to pay premiums shall not constitute a defense to an action under this Agreement. TRUST FUNDS 8. All payments received for or on account of any CONTRACT shall be held in a trust fund to assure the payment of obligations incurred or to be incurred in the performance of any CONTRACT and for labor, materials, and services furnished in the prosecution of the work in any CONTRACT or any extension or modification thereof. All moneys due and to become due under any CONTRACT are also trust funds, whether in the possession of PRINCIPAL, INDEMNITORS or otherwise. The crust funds shall be for the benefit and payment of all obligations for which SURETY may be liable under any BONDS. The trust funds shall inure to the benefit of SURETY for any liability or loss it may have or sustain under any BOND,and this Agreement and declaration constitute notice of such trust. The trust funds, unless otherwise restricted or regulated by state or local laws,can be commingled with other funds,but the trust fund nature and purpose as stated in this paragraph shall not be modified nor waived by this commingling provision. PERFECTION OF SECURITY INTEREST 9. This Agreement shall constitute a Security Agreement and a Financing Statement for the benefit of SURETY in accordance with the Uniform Commercial Code and any similar statute and may be so used by SURETY 4without in any way abrogating, restricting or limiting the rights of SURETY. SURETY may add such schedules to this Agreement describing specific items of security covered hereunder as shall be necessary. For the purpose of recording this N Agreement, a photocopy of this Agreement acknowledged before a Notary Public as being a true copy hereof shall be regarded as an original. The above rights of Surety to file this Agreement and Financing Statement to add Schedules to this Agreement shall be binding as of the effective date of this Agreement,but Surety's right to exercise the rights granted to it under this paragraph shall be conditioned upon the occurrence of an Event of Default. TAKEOVER 10. If an EVENT OF DEFAULT occurs, SURETY, at its discretion, shall have the right, but not obligation,and is hereby authorized,with or without exercising any other right or option conferred upon it by Iaw or by the terms of this Agreement, to take possession of any part or all of the work under any CONTRACT,and,at the expense of PRINCIPAL and INDEMNITORS, to complete or arrange for the completion of the work, and to take such other steps which,at its discretion,SURETY may deem advisable or necessary to obtain SURETY'S release or to avoid loss. r•! CHANGES 11. SURETY is authorized and empowered, without notice to or knowledge of INDEMNITORS, to agree or refuse to agree or to any change whatsoever in any BOND or CONTRACT. Such changes shall include, without limitation,changes, in the time for the completion of any CONTRACT and for due dates within the contract, payments or ct advances thereunder, assent to or taking of any assignment or assignments, execution or consent to the execution of any continuations,extensions or renewals of any BOND,execution of any substitute or substitutes for any bond with the same �t or different conditions, provisions and obligees, and with the same or larger or smaller penalties. INDEMNITORS shall Lai remain bound under the terms of this Agreement even though any of the above described changes increase or may increase the liability of INDEMNITORS. ADVANCES Ti) 12. SURETY is authorized and empowered,but not obligated to make or guarantee loans for the account of PRINCIPAL either before or after any default of PRINCIPAL. Provided however, that SURETY retains the absolute right to cancel any such guarantee and to cease advancing or lending money to PRINCIPAL or for the account of PRINCIPAL with or without cause or with or without notice to PRINCIPAL. All money guaranteed or loaned by SURETY, under this paragraph,and all related costs and expenses incurred by SURETY,shall be a loss to SURETY for which PRINCIPAL and INDEMNITOR shall be responsible. BOOKS AND RECORDS 13. At any time during this Agreement and until such time as the liability of SURETY under all BONDS is ter- minated and SURETY is fully reimbursed all amounts due to it under this Agreement,SURETY shall have a right of access to the books,records,accounts,documents,computer software,and other computer-stored information of PRINCIPAL and INDEMNITORS, wherever located, for the purpose of inspection, copying or reproduction. Any financial institution, depository, materialman, supply house, or other person, firm, or corporation, when requested by SURETY, is hereby authorized and required to furnish SURETY any and all information requested,including,but limited to, the status of the work under any CONTRACT being performed by PRINCIPAL, the condition of the performance of any CONTRACT and payments or pending payments of accounts and full information about all bank accounts and loans and any collateral posted in connection therewith. Upon SURETY'S request, PRINCIPAL and INDEMNITORS shall immediately turn over to SURETY,or its designee, at a time and place and in a manner determined by SURETY, such books, records, accounts, documents, computer software and other computer-stored information, and contracts in whatever form,as and when requested by SURETY. N DECLINE EXECUTION ` 14. SURETY has the right to decline execute, provide or procure any bond requested by PRINCIPAL. If SURETY does execute, provide or procure the execution of a bid bond or proposal bond,or agrees or consents to provide such bond(contract of suretyship),SURETY retains the right to decline to execute any final bond(including,but not limited to, performance, payment or maintenance bond(s)) which may be required in connection with any award which may be made under a bid proposal or tender to which a bid proposal bond or agreement or consent to provide such contract of suretyship is given. There shall be no cause of action asserted against SURETY in consequence of its failure to execute any BOND. IMPROPER EXECUTION 15. The liability of INDEMNITORS shall not be affected by the failure of PRINCIPAL to sign said bond or bonds,or by any claim that other indemnity or security was to have been obtained,or by the release of any indemnity,or by the return or exchange of any collateral. If the execution of this Agreement by any INDEMNITORS be defective or invalid for any reason,such defect or invalidity shall not in any manner affect the validity of this Agreement or the liability hereunder as to any and other INDEMNITORS properly executing this Agreement, and they shall remain fully bound and liable hereunder to the same extent as if such defect or invalidity had not existed. WAIVER OF NOTICE 16. INDEMNITORS hereby waive notice of the execution of the said bond or bonds or any renewal thereof or any new bond or bonds issued in continuation thereof or as a substitute therefore. INDEMNITORS also hereby waive notice of any breach of said bond or bonds or of any act or default that may give rise to claim thereunder or hereunder. SUIT me G_i • 17. Separate suits may be brought by SURETY to enforce the terms of this Agreement as causes of action {,1 . accrue,and the bringing of suit or the recovery of judgment upon any cause of action shall not prejudice or bar the bringing c;i of other suits upon other causes of action,whether previously or subsequently arising. co Principal and Indemnitors agree that Surety may choose to bring any action based on this agreement before a court ` of competent jurisdiction sitting in San Juan,Puerto Rico,and if Surety elects to do so Principal and Indemnitors waive any Ga and all rights to the transfer,removal,or change of venue of action to a court sitting elsewhere. PRINCIPAL and each INDEMNITOR shall be the agent for PRINCIPAL and all INDEMNITORS for the purpose Ci 111 of accepting service of any process in the jurisdiction in which PRINCIPAL or INDEMNITORS accepting the process ,2; reside,are domiciled,are doing business or are found. r, �Y IF SURETY shall file suit at law or in equity to enforce the terms of this Agreement,SURETY shall be entitled to tre recover its own attorney's fees and expenses in connection with such suit. SET-OFF 18. SURETY may reduce the amount of PRINCIPAL'S and INDEMNITOR'S liability to SURETY hereunder by applying to such liability any money payable to PRINCIPAL or INDEMNITORS by SURETY. The money payable to PRINCIPAL or INDEMNITORS may be,but is not limited to any money due or paid by SURETY as an insurer of PRINCIPAL or INDEMNITORS or as an insurer of any other individual or legal entity, or any money due or paid to PRINCIPAL or INDEMNITORS as a return of unearned or other premiums, or money due or paid to settle a claim of 'INCIPAL or INDEMNITORS against SURETY or any individual or other legal entity insured or bonded by SURETY. OTHER SURETIES 19. If SURETY procures the execution of any BONDS by other sureties or executes BOND(s)with co-sureties erasures any portion of said BONDS with reinsuring sureties,then all the terms and conditions of this Agreement shall • ure to the benefit to such other sureties,co-sureties and reinsuring sureties as their interests may appear. v 9 TERM INATION 20. If PRINCIPAL or INDEMNITORS previously executed an Agreement in favor of SURETY, SURETY'S acceptance of this Agreement neither terminates such previous Agreement nor relieves PRINCIPAL or INDEMNITORS from liability to SURETY on bonds executed during the time of the prior agreement. This Agreement may be terminated as to PRINCIPAL or any INDEMNITOR(S)upon written notice to SURETY by PRINCIPAL or INDEMNITOR(S), or by PRINCIPAL'S or INDEMNITOR'S legal representative or successors, by Registered or Certified Mail addressed to SURETY. Termination of this Agreement shall not be effective until 30 days after receipt of said written notice by SURETY. Termination by any one IDEMNITOR shall in no way affect the obligation of any other INDEMNITOR who has given no notice of termination to SURETY. Termination of this Agreement shall not relieve PRINCIPAL or INDEMNITORS from liability to SURETY arising out of BONDS executed, provided or procured by SURETY in behalf of PRINCIPAL prior to the effective date of such termination and for which this Agreement is part of the consideration upon which SURETY relied in executing, providing or procuring such BONDS. Oral or constructive notice to any agent or employee of SURETY shall not constitute effective notice of termination under this Agreement. NOTIFICATION TO INDEMNITORS 21. Notification by SURETY to any one INDEMNITOR shall constitute notification to all INDEMNITORS. If no address for an INDEMNITOR is shown, then notice to the address of PRINCIPAL shall be deemed as sufficient notification. SUBORDINATION OF INDEMNITOR 22. PRINCIPAL and INDEMNITOR waive and subordinate all rights of indemnity,subrogation and contribu- tion of each against the other until all obligations to SURETY under this Agreement,at law or in equity,have been satisfied in full. r-I Ca • POWER OF ATTORNEY `NI 23. PRINCIPAL and INDEMNITOR hereby irrevocably nominate, constitute,appoint and designate SURETY, �,.1 through its authorized representative(s)as their attorney-in-fact with the right,but not the obligation,to exercise all of the `•- rights of PRINCIPAL and INDEMNITORS assigned,transferred and set over to SURETY in this Agreement. t=� SURETY may, in the name of PRINCIPAL and INDEMNITORS, make, execute, and deliver any and all assignments, ` ` financing statements, documents,or papers,checks,drafts,warrants or other instruments made or issued in payment of any ;.I obligation to which SURETY has the right to receipt of payment pursuant to this Agreement if SURETY deems such action Lt1 necessary and proper for the full protection intended to be herein given to SURETY under this Agreement. As attorney-in- '.2'.. fact, SURETY may also take possession of the tools, plant,equipment,materials, and subcontracts and all other collateral =f mentioned in the Agreement and enforce, use, employ, and dispose of same for the purposes set forth in the agreement. 1.1 PRINCIPAL and INDEMNITORS hereby ratify and confirm all acts and actions taken and done by SURETY as such ot attorney-in-fact and acknowledge that said Power-of-Attorney is a Power Coupled With an Interest. Surety's right to exercise the rights granted to it under this paragraph shall be conditioned upon the occurrence of an Event of Default. SEVERABILITY AND PARTIAL EXECUTION 24. If any provision or provisions, or portion thereof,of this Agreement shall be void or unenforceable under the laws of any jurisdiction governing its construction,this Agreement shall not be voided or vitiated thereby, but shall be construed and enforced with the same effect as though such provision or provisions,or portion thereof,were omitted. If any of the parties mentioned in this Agreement fail to execute the same,or if the execution hereof by any of the parties shall be defective or invalid for any reason, such failure, defect, or invalidity shall not in any manner affect the validity of this Agreement or the liability hereunder of any of the parties executing same, but each and every party so executing shall be and remain fully bound and liable hereunder to the same extent as though such failure, defect or invalidity had not existed. This Agreement may be executed in counterparts,each of which shall be an original,but all of which together shall onstitute one and the same instrument. ti SIGNATURES 25. Wherever used in this instrument the plural term shall include the singular and the singular shall include the plural,as circumstances require. NOTICE TO SURETY 26. PRINCIPAL and INDEMNITOR shall promptly provide all written notices to SURETY required in this Agreement at P.O. Box 70333,San Juan,P.R. 00936-8333,including but not limited to the following events: (I) Notice by any obligee on any BOND for PRINCIPAL that PRINCIPAL is in default or has failed or t refused to perform any CONTRACT obligation; L. (2) Notice by any obligee on any BOND for PRINCIPAL that PRINCIPAL cure its performance or shown cause as to why PRINCIPAL should not be terminated for default. GENERAL PROVISIONS 27. SURETY'S rights hereunder shall be deemed to be cumulative with, and in addition to, all other rights of SURETY, however derived. SURETY is not required to exhaust its remedies or rights against PRINCIPAL or to await receipt of any final dividends from PRINCIPAL before asserting its rights against any one or more INDEMNITORS. •err.. Ini ra• This Agreement is to be liberally construed so as to protect,exonerate and indemnify SURETY. ', The paragraph titles as contained in this Agreement are descriptive only and do not restrict or modify the terms of crrio the Agreement. If any inconsistency between the paragraph titles and the terms of this Agreement exist, the term of this Agreement shall control. WAIVER AND MODIFICATION 28. The rights and remedies afforded to SURETY by the terms of this Agreement may not be waived or modi- ctti fled orally and no written change or modification shall be effective until signed by an employee of SURETY. MERGER AND CONSOLIDATION 29. THE PRINCIPAL AND INDEMINITORS HAVE READ AND UNDERSTANT THIS AGREEMENT, THIS AGREEMENT OF INDEMNITY CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES. NO SEPARATE AGREEEMENTS OR UNDERSTANDINGS, PAST OR PRESENT, WHETHER ORAL OR WRITTEN, CHANGE THE TERMS OF THIS AGREEMENT. I 0 t-, 3 IN WITNESS WHEREOF,the parties have made this Agreement as of this day 5 of AUGUST of 2010. csa ci ATTEST or WITNESS: }i CD BU DERS INC.P' L - /gill 4, [9 AMILLETE E.IRIZAR•V RI ( RA-SiCR '1 RY ISMAE CARRASQUILLO SAN EZ-PRESIDENT (Seat fi o t,2 ATTEST or WITNESS: BUILL\ERS HOLDING CO.,CORP. ft (_ 1i4 AMILLETE E.IRIZAR Y RI�RA- RI TARP ISMA L CARRASQUILLO SANCI Z-PRESIDENT 43C'') ATTEST or WITNESS: CDC MAINTENANCE GROUP,CORP ,-/-bir } li tliattG '4'19 Ail c iitiN t (?tULLt 'AMILLETE E.IRIZA Y RIV RA-ECRL + V ISM.EL CARRASQUILLO SA Pligitt HEZ-PRESIDENT i5r,)) fATTEST or WITNESS: 1 tAe• C+i�� 111 1i, ISMAEL CARRASQUILLO .�skNCHEZ - IND. '`''" INDEMNITOR eTESTor WITNESS: ik.. milu R V.`MILLETE E.IRIZA•RY •IVE4 A-I .1NDE'1NITOR !`s°') ATTEST or WITNESS: (sc1) ATTEST or WITNESS: (Seal) ATTEST or WITNESS: (S i) ATTEST or WITNESS: (Sct) ATTEST or WITNESS: (s.a ATTEST or WITNESS: n in t-, et • IN (seat) Cr't CA 6 CORPORATE ACKNOWLEDGEMENT ,--1 Commonwealth of Puerto Rico j City of CATANO ss.: '. On thistwelve day of the month of august in the year 2010 — before me personally comes(s) ISMAEL CARRASQUILLO SANCHEZ TA to me known who,being by me duly sworn,deposes and says that same resides in Gurabo, Puerto Rico at same is the PRESIDENT of CD BUILDERS INC. I BUILDERS HOLDING CO., CORP. I CDC MAINTENANCE GROUP,CORP j the corporation described in and which executed the foregoing instrument;thi same knows the seal 9f the said corporation; that the seal affixed to the said instrument is such corporate seal;that it was/ti affixed by the order o€the and of Directors of said corporation,and that same signed the name thereto by like ord :' AFFIDAVIT 28857 (� -( ignaturc of Notary taking acknowledgment) ,t/`v t INDIVIDUAL ACKNOWLEDGEMENT Commonwealth of Puerto Rico City of CATANO ss.: On thi we lye day of the month of august in the year 2010— before me personally comes(s) ISMAEL CARRASQUILLO SANCHEZ&YAMILLETE E.IRIZARRJ RIVERA to me known and known to me to be the person(s)who(is)(are)described in'and who executed there "ung instrument and acknowledge(s)to me that he/she executed the same. / 1/ AFFIDAVIT 28858 / / (, �1`(` .'fit`- _ f(Si attire of Notary taking acknotMledgment) / (1 PARTNERSHIP ACKNOWLEDGEMENT Commonwealth of Puerto Rico City of ss.: On this day of in the year before me personally comes(s) a member of the co-partnership of to me known and known to me to be the person who is described in and who executed the foregoing instrument, and acknowledges to me that he/she executed the same as and for the act and deed of the said co-partnership. (Signature of Notary taking acknowledgment) A It" ri E�"fr . r•a ADDENDUM I TO GENERAL AGREEMENT OF INDEMNITY CAPITAL TRANSFER RESTRICTIONS and LIMITATIONS r‘:i 1. Indebtedness. Assumptions, Guarantees, LIENS- PRINCIPAL will not incur, assume, or suffer to exist any '" DEBT or grant LIENS upon any of its properties or assets now owned or hereafter acquired, or become ci contingently liable including without limitation, liable by way of agreement, contingent or otherwise, toI purchase assets, to provide funds for payment, to maintain net worth or working capital, to supply funds to or invest in any debtor, or otherwise to assure any creditor against loss for any obligation of any other person or entity except for the following conditions: L3 a.) guaranties by endorsement of negotiable instruments for deposit or collection in the ordinary course of business; b.) trade debt and other short term indebtedness (other than indebtedness for borrowed money) incurred in the ordinary course of business; c.) DEBT, LEASE DEBT, and LIENS granted to finance the acquisition of equipment in the ordinary course of business; provided that such documents contain a provision which permits SURETY, at its option,to use the equipment to complete the CONTRACT. In the event SURETY exercises its option, SURETY agrees to maintain the equipment and pay reasonable rent or debt service, whichever is less, on the equipment during the period the equipment is used on the CONTRACT. /C./ PRINCIPAL covenants that, upon an EVENT OF DEFAULT and the request of SURETY, it will furnish SURETY with a current list of equipment describing each item of equipment owned by it. d.) indebtedness or LIEN granted in the payment obligations of PRINCIPAL for insurance premiums or of funds borrowed for the payment of such premiums;and e.) any indebtedness or LIEN granted on its assets by PRINCIPAL to SURETY to secure a SURETY loss; f.) any LIEN on assets existing on the effective date of this Agreement and listed on Exhibit A to this Agreement; (this exhibit is audited financial statements including a detail of the assets that have an existing lien, the holder of the lien, and a brief description of the terms of the encumbrance) 2. Disposition of Assets. PRINCIPAL will not sell, lease, transfer, or otherwise dispose of its assets whether now owned or hereafter acquired except for sales of inventory in the ordinary course of business and except for sales of equipment or real property (including appurtenances) not necessary for the conduct of its business provided that such sales of equipment or real property not necessary for the conduct of its business and do not exceed in the aggregate in any fiscal year ten percent(10%)of the book value of all assets. 3. Mergers. PRINCIPAL will not without the prior written consent of SURETY merge or consolidate with or into any PERSON. 4. Investments, Dividend Restrictions. PRINCIPAL will neither make or enter into any agreement to make any acquisition nor make or suffer to exist any investment in nor stock transfer to any PERSON whether in the form of equity or DEBT, or make any dividend, acquire treasury stock or other distribution to any other PERSON without the prior written consent of SURETY, except: a.) time deposits and certificates of deposit with maturities of one year or less of any of the United States commercial banks with capital, surplus and undivided profits of One Hundred Million Dollars or more; b.) securities issued, guaranteed or, insured by the United States Government or an instrumentality or agency thereof maturing within one year from the date of acquisition thereof; c.) commercial paper, demand notes or municipal bonds rated at least P2 or Aa, respectively, by Moody's Investors Service Inc., or rated at least A2 or AA, respectively, by Standard & Poor's .r In ADDENDUM TO AGREEMENT OF INDEMNITY '•' ' CAPITAL TRANSFER RESTRICTIONS AND LIMITATIONS ;;t page 2c. cks Corporation, or commercial paper or municipal bonds receiving and equivalent rating from any nationally recognized rating agency; Ct d.) credit extended in connection with the sale of goods or rendering of services in the ordinary ": course of business and promissory notes or other instruments evidencing such credit (provided that the aggregate PRINCIPAL amount of such notes and instruments outstanding at any time will not exceed One Hundred Thousand Dollars($100,000); ua e.) loans or advances to employees of PRINCIPAL made in the ordinary course of business consistent with past business practices not exceeding an amount in aggregate at any one time of more than One Hundred Thousand Dollars($100,000); f.) payment of dividends, treasury stock purchase or other distributions with prior SURETY written consent(not otherwise prohibited by the terms of this Agreement); g.) distributions to INDEMNITORS for the amounts for the payment of any income taxes generated by the operations of the PRINCIPAL, and that are in fact paid by the Individual with respect to the operations of the PRINCIPAL, and as a result of Individual's ownership of equity interest in the PRINCIPAL. These amounts specifically exclude those for the payment of income tax required to be paid with respect to any salaries or any other compensation paid to the Individual by any INDEMNITOR, and other tax obligations of INDEMNITOR, be they past, present or future, that is not the result of the operations of the PRINCIPAL. 5. Restrictions upon Contracts with Affiliates. PRINCIPAL will not without the prior written consent of SURETY enter into contracts, equipment leases, or other agreements with any AFFILIATE except on an arms' length basis. 6. Definitions. Terms defined in the Agreement of Indemnity ("Agreement"), where they appear in this Addendum shall have the meaning set forth therein. Additionally,where the following terms appear in this Addendum,they shall also be defined as set forth below: PERSON means any entity, whether an individual, trustee, corporation, partner, joint stock company, unincorporated organization, business association or firm, joint venture, a government or any agent or instrumentality or political subdivision thereof. AFFILIATE means,with respect to PRINCIPAL,any PERSON or group acting in concert with PRINCIPAL and/or INDEMNITORS that, directly or indirectly, through one or more intermediaries, has a financial interest in PRINCIPAL or INDEMNITORS,or in which PRINCIPAL or INDEMNITORS have a financial interest. DEBT means, as of any applicable date of determination and as to any PERSON, all items of indebtedness, obligation or liability of such PERSON whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, joint or several, that should be classified on such PERSON's balance sheet as a liability in accordance with GAAP. EVENT OF DEFAULT shall mean as defined in the Agreement,and additionally the following: a. any representation or warranty made or deemed made by any INDEMNITOR or PRINCIPAL in this Agreement or any other SURETY document, or which is contained in any certificate, document, opinion, or financial or other statement furnished under or in connection with any SURETY document, shown to have been incorrect in any material respect on or as of the date made or deemed made;or to r-+ ADDENDUM TO AGREEMENT OF INDEMNITY �� CAPITAL TRANSFER RESTRICTIONS AND LIMITATIONS (\I page 3 it 01 ♦y b. the occurrence of a default under any document relating to any DEBT of any of INDEMNITORS , or PRINCIPAL,which results in acceleration of the DEBT thereunder; or the foreclosure or notice of foreclosure by any lender or holder of any DEBT on any collateral that secures any such fit DEBT;or 7; c. the failure to perform,or comply with the terms,covenants or obligations in this Addendum :Lt u) "LEASE DEBT means, all leases or other contracts or arrangements,whether or not in writing, relating to the use of personal property in respect of which such PERSON is a lessee, sublessee,user or obligor. "LIEN" means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement to assure payment of DEBT, encumbrance, preference, priority, security agreement, or preferential arrangement to assure payment of DEBT, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any jurisdiction to evidence any of the it) foregoing). n It is hereby agreed to by PRINCIPAL and INDEMNITORS that by signing this Addendum PRINCIPAL and `` INDEMNITORS do state and solemnly swear under penalty of perjury to strictly and faithfully comply with all the terms and conditions contained herein, said sworn statement made with full understanding of the consequences resulting from an act of perjury under applicable law, IN WITNESS WHEREOF,the undersigned PERSONS hereunto sign and attest to the foregoing in the city of , Puerto Rico on this of ,2010. ) . ( iftliti t att 1C � , 1LW ( wi46 CD BUILDERS, INC. BUILD:RS HOLDING CO., CORP. Representada por su President , Representada por su Presidente, a Sr. ISMAEL CARRASQUILLOSANCHEZ Sr. ISMAEL CARRASQUILLO SANCHEZ HC 02 Box 14740 HC 02 Box 14740 GURABO, P.R. 00778 GURABO, P.R. 00778 (,__ 'k& U Ltat c4L ( aaiiit 'it CDC A1NTENANCE GROUP, CORP. ISM4EL CARRASQUILLO SCHEZ Representada por su President En su capacidad personal Sr. ISMAEL CARRASQUILLO SANCHEZ HC 02 Box 14740 HC 02 Box 14740 GURABO, P.R. 00778 GURABO, P.R. 00778 . r € ., 'f:A.Vt , ',,, caw ILLETE IRIZARRY RI ER t E 1,u capacidad personal H 02 Box 14740 GURABO, P.R. 00778 ` sri ADDENDUM TO AGREEMENT OF INDEMNITY 9 CAPITAL TRANSFER RESTRICTIONS AND LIMITATIONS C.;'! page 4 co fivl C...'1 Affidavit No. 28859 .-) Sworn and subscribed to by the persons stated above, in the capacities stated above, before me, all of whom iti 0 are personally known or have been duly identified by me,the undersigned Notary. z On this 12 day of august ,20 T'01n the city of CATANO,_ ,Puerto Rico. (4//: / 02 i� C& '(,(( ( I _.;:� Notary Public • . , ui r.� C-3 RESOLUTION cx At a Special meeting of the Board of Directors of CDC MAINTENANCE GROUP, CORP. 4�x hereinafter referred to as the CORPORATION) dully called on the 5 day of august 2010 ,��� a quorum being present, the following Preamble and Resolution was adopted: Ji "WHEREAS, this CORPORATION is materially interested in matters or transactions in which CD BUILDERS INC. has applied to or may apply to MAPFRE PRAICO Insurance Company *** for surety bond(s) ; and, "WHEREAS, MAPFRE PRAICO Insurance Company *** is willing to execute such bond(s) as SURETY upon being furnished with the written indemnity of this CORPORATION, therefore, be it "RESOLVED, that ISMAEL CARRASQUILLO SANCHEZ - PRESIDENT is the proper executing officer of this CORPORATION authorized to execute on behalf of the CORPORATION any agreement or agreements of indemnity required by MAPFRE PRAICO Insurance Company *** as a prerequisite to the execution by it of the bond(s) for CD BUILDERS INC. in connection with the matters or transactions described in the agreement or agreements of indemnity required by the said MAPFRE PRAICO Insurance Company *** and the proper attesting officer of the CORPORATION be and is hereby authorized to affix the corporate seal to such agreement or agreements of indemnity and subscribe his name thereto, attesting same". I, YAMILLETE E. IRIZARRY RIVERA - SECRETARY of CDC MAINTENANCE GROUP, CORP.have compared the forgoing Preamble and Resolution with the original thereof as recorded in the Minute Book of said Corporation, do certify that the same is a correct and true transcript therefrom and of the whole of said original Preamble and Resolution. SIGNED, SEALED AND DATED THIS fifth DAY OF the month Of august 20 10• _ v� Secretary (Seal} . OFkP013,r?. c \ •• c• SEAL -°) lfc , I 1, •117,479 c © COMMONWEALTH AG OF Op t> ! F&70 V'N\ c r , In f� cE RESOLUTION tia At a Special meeting of the Board of Directors of BUILDERS HOLDING CO. , CORP:1 Ci hereinafter referred to as the CORPORATION) dully called on the 5 day of august 2010 ,(.+3 a quorum being present, the following Preamble and Resolution was adopted: Tj} "WHEREAS, this CORPORATION is materially interested in matters or transactions in which CD BUILDERS INC. has applied to or may apply to MAPFRE PRAICO Insurance Company *** for surety bond(s); and, "WHEREAS, MAPERE PRAICO Insurance Company *** is willing to execute such bond(s) as SURETY upon being furnished with the written indemnity of this CORPORATION, therefore, be it: "RESOLVED, that ISMAEL CARRASQUILLO SANCHEZ - PRESIDENT is the proper executing officer of this CORPORATION authorized to execute on behalf of the CORPORATION any agreement or agreements of indemnity required by MAPF'RE PRAICO Insurance Company *** as a prerequisite to the execution by it of the bond(s) for CD BUILDERS INC. in connection with the matters or transactions described in the agreement or agreements of indemnity required by the said MAPERE PRAICO Insurance Company *** and the proper attesting officer of the CORPORATION be and is hereby authorized to affix the corporate seal to such agreement or agreements of indemnity and subscribe his name thereto, attesting same". I, YAMILLETE E. IRIZARRY RIVERA - SECRETARY of BUILDERS HOLDING CO. , CORP. have compared the forgoing Preamble and Resolution with the original thereof as recorded in the Minute Book of said Corporation, do certify that the same is a correct and true transcript therefrom and of the whole of said original Preamble and Resolution. SIGNED, SEALED AND DATED THIS 5 DAY OF august , 20 10 (1) VO �OL�'NSecretary (Seal) co RATCO Qo° F 0tia0540 4.L j44, SEAQ- 0 191 ,871 9 CO� MOF EA v D ,� FRTO '''2009