Loading...
HomeMy WebLinkAbout2026-025 3-Way Contract Template UpdateApril 10, 2026 Report No. 2026-025 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Development Contract for Public Improvements (Three-Way Contract) SUMMARY: The City often executes three-party agreements with Developers and Contractors to ensure there is bonding coverage for public improvements being constructed to benefit a particular development. Staff is seeking to update the contract template used for the Development Contract for Public Improvements, and will be bringing it forward for City Council consideration on April 21, 2026. BACKGROUND: The Development Contract for Public Improvements is a three-party agreement between the City of Denton, the Developer, and the Contractor regarding the construction of public infrastructure serving a development. This agreement is a standard requirement and is provided for in Subchapter C of Chapter 212 of the Texas Local Government Code. Its primary purpose is to ensure that all public infrastructure necessitated by a project - such as roads or utilities - is designed and constructed in accordance with the City’s design criteria manual, standard specifications, and all applicable ordinances. Because these improvements are necessitated by a particular development and will become public property upon completion and acceptance, the City has an interest in ensuring they are built correctly and that all associated costs are covered by the developer. The agreement provides essential financial and legal protection for the City by outlining the responsibilities of each party. The Developer is solely responsible for all monies due to the Contractor, and the City holds no liability or responsibility for construction expenses and costs. Furthermore, the Contractor is required to furnish Performance and Payment bonds to ensure the work is completed in accordance with the plans and expectations, subcontractors are paid, and any defects in materials and workmanship are warranted for a period of two years from the date of final acceptance. In collaboration with Public Works Inspections and City Attorney’s Office, several key areas needing revisions were identified including timelines, bonding requirements, and inspection protocols as follows. These revisions fall into the following key categories. Procedural and Timing Changes • Defined Construction Timeline: The proposed contract explicitly requires the Contractor to complete public improvements no later than 365 calendar days from the issuance of a Notice-To-Proceed. • Extension Provisions: The City has the sole discretion to grant extensions in six-month increments upon written request from the contractor. • Termination for Convenience: A proposed provision allows the City to terminate the agreement for convenience at its sole discretion. April 10, 2026 Report No. 2026-025 • Record Submission: While the City still maintains the right to inspect books and records upon request, the proposed template mandates that all related records be submitted to the City prior to final acceptance without requiring a formal request. Bonding Enhancements • Maintenance Bond: In addition to the Performance and Payment bonds, the Contractor must specifically furnish a Maintenance Bond in favor of the City to secure a two-year warranty period. Inspection and Liability Updates • Extended Inspection Schedule: The City’s inspection protocol would be expanded to include specific follow-up inspections at both 30 and 400 days following the date of final completion and acceptance. • Stop Work Authority: The City has the right to issue a stop work order if the contractor fails to allow inspections, provide safe access, or follow City orders. • Expanded Indemnification: The indemnification clause specifically includes coverage for damage to existing City infrastructure caused by construction and related activities. • Recovery of Damages: A proposed clause clarifies that the City may recover damages against the Developer, Contractor, or their bonds, even after acceptance, if it is later discovered that improvements were not built according to the agreed plans and specifications. These updates are necessary to ensure clarity, consistency, and adequate City protections. If adopted by City Council, this new contract will be a ministerial review and shorten the timeline to get approved developments under construction. ATTACHMENTS: Exhibit 1 – Contract Template Exhibit 2 – Maintenance Bond Template Exhibit 3 – Payment Bond Template Exhibit 4 – Performance Bond Template STAFF CONTACT: Charlie Rosendahl Interim Director, Development Services Charlie.Rosendahl@cityofdenton.com REQUESTOR: Staff Initiated STAFF TIME TO COMPLETE REPORT: 3 hours April 10, 2026 Report No. 2026-025 PARTICIPATING DEPARTMENTS: Development Services Department, Public Works Inspections, City Attorney’s Office Page 1 of 16 PROJECT NO. _________________ CONTRACT TYPE _____________ DEVELOPMENT CONTRACT FOR PUBLIC IMPROVEMENTS THE STATE OF TEXAS § § COUNTY OF DENTON § This Development Contract for Public Improvements (“Contract” or “Agreement”), including any Exhibits attached hereto, is entered into by and between the City of Denton, a Texas home-rule municipal corporation of Denton County, Texas, (“Denton” or “City”); _______________________________________, a_________________________ (“Developer”); and _____________________________________, a___________________________ (“Contractor”), and is effective as of the date the authorized representative for the City signs this Agreement (“Effective Date”). WHEREAS, the Developer wishes to enter into this Agreement with the City to provide for the construction of ________________________________, further described in Exhibit “A” attached hereto and made a part hereof by reference (the “Public Improvements”); and WHEREAS, the Developer, whose business address is__________________________________________, is the owner of ___ acres of real property generally located at ____________________, and specifically described in Exhibit “B” attached hereto and incorporated by reference (the “Development”); and WHEREAS, the Public Improvements described in Exhibit “A” are necessitated by and will serve the Development; and WHEREAS, this Agreement is entered into pursuant to Subchapter C of Chapter 212 of the Texas Local Government Code and as a condition of plat approval; and Page 2 of 16 WHEREAS, the Developer agrees the Public Improvements are roughly proportional to the benefits received and burdens imposed by the Development; and WHEREAS, this Agreement is required to ensure the Public Improvements are constructed in accordance with the City’s standard specifications for public works projects and all applicable ordinances and design criteria manuals (the “City Standards”); and WHEREAS, this Agreement is required to ensure the Public Improvements are constructed in accordance with the plans and specifications prepared, signed, and sealed by ______________________ (the “Developer’s Engineer”); dated________; and approved and on file with the City (the “Project Specifications”); and WHEREAS, the Developer understands that the Project Specifications may only be amended with the written approval of the City Engineer or their designee; and WHEREAS, the City Standards and Project Specifications are incorporated herein by reference and shall be collectively referred to as the “Plans and Specifications”; and WHEREAS, the Developer understands and agrees that it is responsible for and has retained at its sole expense the Developer’s Engineer to design the Public Improvements in accordance with the City Standards and applicable state and federal regulations, taking into consideration site conditions that may impact the Public Improvements; and WHEREAS, the Developer shall provide for the construction of the Public Improvements by and through the Contractor whose business address is __________________________________; and WHEREAS, the Contractor is experienced in the construction of improvements similar to the Public Improvements; and WHEREAS, the Developer and the Contractor recognize the City has an interest in ensuring that the Public Improvements, which will, upon completion and acceptance by the City, become public Page 3 of 16 property, are properly constructed in accordance with the Plans and Specifications and that the Contractor pays its subcontractors; WHEREAS, the City may sue to enforce any provisions of this Agreement including, without limitation, those involving compliance with the Plans and Specifications and completion of the Public Improvements before the expiration of the Maintenance Bond; and WHEREAS, the City, the Developer, and the Contractor agree that a Performance Bond, a Payment Bond, and a Maintenance Bond will be furnished by the Contractor in favor of the City and shall be executed by a surety company authorized to do business in the State of Texas. NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained in this Contract, the Parties agree to the following terms and conditions: ARTICLE I TERM This Contract shall begin on the Effective Date and continue until the date that each of the obligations of the Parties hereto has been satisfied; provided, however, that this Contract may terminate earlier in accordance with the provisions of this Contract (“Term”). ARTICLE II GENERAL PROVISIONS 1. Covenants of Developer and Contractor. (a) Construction and Substantial Completion. Contractor shall construct the Public Improvements in accordance with the Plans and Specifications and complete the Public Improvements no later than 365 calendar days from the date of issuance of the Notice-To-Proceed. “Notice-To-Proceed" means the document issued by the City permitting the Contractor to begin construction of the Public Improvements. (b) In the event the Contractor is unable to meet the deadline in Section 1(a) of Page 4 of 16 this Article, the Contractor shall submit an extension request to the City for consideration. Extensions may be issued in six (6) month increments at the City’s sole discretion. (c) Developer shall be responsible for all monies due to the Contractor for construction of the Public Improvements. (d) The Parties agree the City shall have no liability to the Contractor under this Contract. By executing the Contract, Contractor agrees to rely solely on the Developer, and not the City, for payment. The City, in its discretion, may require the Developer to provide security for payments to the Contractor, which may be in the form of a cash deposit with the City, a letter of credit, a dedicated construction account with a lending institution approved by the City, or other security the City, in their discretion, deems adequate to ensure the Developer does not default in its payment obligations to the Contractor. (e) Authority of City Engineer and Developer and Contractor Warranty. i. All work on the Public Improvements shall be performed in a good and workmanlike manner and to the satisfaction of the City. The City shall decide all questions that arise as to the quality and acceptability of materials furnished, work performed, and the interpretation of the Plans and Specifications. The City may reject any work that in its sole opinion is not performed in accordance with the Plans and Specifications. ii. The Contractor, its surety on the Maintenance Bond as required herein, and the Developer warrant that the Public Improvements will be free from defects in materials and workmanship and that they will pay to remedy same for a period of two years after the completion of the Public Page 5 of 16 Improvements and final acceptance by the City (the “Warranty Period”). This warranty shall not constitute a limitation on the duty to remedy latent defects in construction that were not known at the time of final acceptance or within the Warranty Period. iii. The Contractor shall furnish the City with every reasonable facility for ascertaining whether the work performed was in accordance with the Plans and Specifications. (f) Inspections, Tests, and Orders. i. The City may require Contractor, at its own expense, to remove and replace any work done or materials used without suitable inspection by the City, unless the work and materials were given prior written approval from the City. ii. The City shall perform: A. Periodic inspections of the work; B. A final inspection prior to final acceptance by the City; and C. Inspections at 30 and 400 days from the date of final completion and acceptance of the Public Improvements by the City. iii. Upon failure of the Contractor to allow an inspection; to provide safe access for inspections; to test materials furnished; to satisfactorily repair, remove or replace, if so directed, rejected, unauthorized, or condemned work or materials; or to follow any other request or order of the City, the City shall notify the Developer of such failure and may suspend inspections of such work, issue a stop work order, or both until such failure is remedied. If such failure is not remedied to the satisfaction of the City, the City shall Page 6 of 16 have no obligation under this agreement to approve or accept the Public Improvements and the City may withhold, suspend, or revoke any permits or other approvals for the Development until such matter is remedied to the satisfaction of the City. iv. Although the Public Improvements described herein may be accepted by the City, the City may recover damages against the Developer and/or Contractor and upon the bonds if it is discovered that the Public Improvements were not built in accordance with the Plans and Specifications. (g) Insurance. Contractor shall provide for insurance in form and in substance in accordance with the City’s standard insurance requirements for public works projects (the “Standard Insurance Requirements”). The Standard Insurance Requirements in effect on the Effective Date are incorporated herein by reference, are on file with the City, and may be amended from time to time. (h) Means and Methods of Construction. The Contractor may choose the means and methods of construction; subject, however, to the City’s right to reject the Public Improvements when the means or method of construction does not, in the sole judgment of the City, assure that the Public Improvements are constructed in accordance with Plans and Specifications. (i) Books and Records. i. The term “Books and Records” includes, without limitation, any item stated in the General Requirements section in the Plans and Specifications, for example, material test reports, material tickets, material submittals, project schedules, TDLR inspections, As-Built plans, Page 7 of 16 and project-specific specifications. ii. Any or all of the Developer and the Contractor’s Books and Records related to the construction of the Public Improvements shall be available for inspection by the City within 14 days of a request submitted by the City pursuant to Section IV.9 of this Contract. iii. All of the Developer and the Contractor’s Books and Records related to the construction of the Public Improvements shall be submitted to the City prior to the City’s final acceptance of the Public Improvements. (j) Performance Bonds. The Contractor shall execute a Performance Bond in the full amount of the cost to construct the Public Improvements in favor of the City ensuring completion of the Public Improvements in accordance with the Plans and Specifications. The Performance Bond shall be executed by a corporate surety authorized to do business in Texas in accordance with Chapter 2253 of the Texas Government Code, shall be on the City’s standard form, and shall contain a local resident agent for service of process. (k) Payment Bonds. The Contractor and Developer shall execute a Payment Bond in the full amount of the cost to construct the Improvements in favor of the City ensuring against claims from suppliers and subcontractors. The Payment Bond shall be executed by a corporate surety authorized to do business in Texas in accordance with Chapter 2253 of the Texas Government Code, shall be on the City’s standard form, and shall contain a local resident agent for service of process. (l) Maintenance Bonds. The Contractor shall execute a Maintenance Bond warranting against defects in materials and workmanship for a period of two Page 8 of 16 years from the date of final acceptance by the City. The Maintenance Bond shall be executed by a corporate surety authorized to do business in Texas in accordance with Chapter 2253 of the Texas Government Code, shall be on the City’s standard form, and shall contain a local resident agent for service of process. (m) Retainage: Final Payments. As security for the faithful completion of the Public Improvements, Contractor and Developer agree that the Developer shall retain ten (10) percent of the total dollar amount of the contract price until after final approval or acceptance of the Public Improvements by the City. The Developer shall thereafter pay the Contractor the retainage, only after Contractor has furnished to the Developer satisfactory evidence including an affidavit that all indebtedness has been paid, that all indebtedness connected with the work and all sums of money due for labor, materials, apparatus, fixtures, or machinery furnished for and used in the performance of the work have been paid or otherwise satisfied. In addition, Contractor shall provide Developer with a consent to final payment from the payment bond surety. (n) Encumbrances. Upon completion and final acceptance of the Public Improvements by the City, the Public Improvements shall become the property of the City free and clear of all liens, claims, charges, or encumbrances of any kind. If, after acceptance of the Public Improvements, any claim, lien, charge, or encumbrance is made, or found to exist, against the Public Improvements, or land dedicated to the City to which they are affixed, the Developer and Contractor shall upon notice by the City promptly cause such claim lien, charge, or encumbrance to be satisfied and released or promptly post a bond with the Page 9 of 16 City in the amount of such claim, lien, charge, or encumbrance, in favor of the City, to ensure payment of such claim, lien, charge, or encumbrance. (o) Covenants of City of Denton. Upon proper completion of the Public Improvements in accordance with this Agreement, the City agrees to accept the Public Improvements. ARTICLE III TERMINATION 1. Termination. This Agreement may be terminated upon any one of the following: (a) By written agreement of the Parties; or (b) By the City for convenience and in its sole discretion. ARTICLE IV MISCELLANEOUS 1. Agreement Controlling. The provisions of this Agreement shall control over any conflicting provision of any contract between the Developer and Contractor as to the construction of the Public Improvements. 2. Entire Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 3. Assignment. This Agreement shall not be assigned by the Parties. 4. Nexus and Rough Proportionality. The Developer acknowledges and agrees that there is a reasonable nexus between the demands created by the Development and the Public Improvements, and that the costs associated with the construction and dedication of land for the Public Improvements is roughly proportional to the benefits Page 10 of 16 received and the burdens imposed by the Development. THE DEVELOPER SHALL INDEMNIFY AND HOLD THE CITY HARMLESS AGAINST ANY CLAIM BY IT OR OTHERS CLAIMING THROUGH IT, THAT THE REQUIRED PUBLIC IMPROVEMENTS AND ASSOCIATED DEDICATION OF LAND ARE UNLAWFUL EXACTIONS. 5. Venue and Governing Law. The Parties herein agree that this agreement shall be enforceable in Denton County, Texas, and if legal action is necessary in connection therewith, exclusive venue shall lie in Denton County, Texas. The terms and provisions of this agreement shall be construed in accordance with the laws of the State of Texas, and the Charter, Ordinances, Rules, and Regulations of the City. 6. Successor and Assigns. This Contract shall be binding upon and inure to the benefit of the Parties hereto, their respective successors and assigns. 7. Authority to Execute. The City, Developer, and Contractor hereby warrant to the other that the person signing below is authorized on behalf of its respective corporation or government entity and is signing in the capacity to authorize and bind such Parties under the terms and conditions as set forth herein. 8. Amendments and Waivers. Any provisions of this Agreement may be amended or waived if such amendment or waiver is in writing and is signed by the City’s Director of Development Services, or their designee, and the Developer. No course of dealing on the part of the Parties, nor any failure or delay by one or more of the Parties, with respect to exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, expect as otherwise provided in this section. 9. Notices. Any notice sent under this Agreement (except as otherwise expressly required) shall be written and mailed, or sent by electronic mail confirmed by mailing written confirmation at substantially the same time as such electronic mail, or personally Page 11 of 16 delivered to an officer of the receiving party at the following addresses: City of Denton c/o Development Services 401 N. Elm Street Denton, TX 76201 development@cityofdenton.com Developer: _______________________________ _______________________________ _______________________________ _______________________________ _______________________________ Contractor: _______________________________ _______________________________ _______________________________ _______________________________ _______________________________ Each party may change its address by written notice in accordance with this section. Any communication addressed and mailed in accordance with this section shall be deemed to be given when so mailed, any notice so sent by electronic mail shall be deemed to be given when receipt of such transmission is acknowledged, and any communication so delivered in person shall be deemed to be given when receipted for, or actually received by the City, or the Developer, as the case may be. 10. Point of Contact. Each Party shall designate a “Project Manager” who shall be the principal point of contact between the Parties for all matters relating to the Development. A Party may designate a new Project Manager by notice to the other Parties using the options provided in Section IV.9. Page 12 of 16 11. Incorporation of Recitals. The above recitals are hereby incorporated into this Contract as if fully set forth herein. 12. INDEMNIFICATION. THE DEVELOPER AND CONTRACTOR SHALL AND HEREBY DO INDEMNIFY, DEFEND, AND SAVE HARMLESS, THE CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM ALL SUITS, ACTIONS, OR CLAIMS OF ANY CHARACTER, NAME, AND DESCRIPTION BROUGHT FOR OR ON ACCOUNT OF ANY INJURIES OR DAMAGES RECEIVED AS SUSTAINED BY ANY PERSON, PERSONS, OR PROPERTY ON ACCOUNT OF THE OPERATIONS OF THE DEVELOPER, CONTRACTOR, THEIR AGENTS, EMPLOYEES, OR SUBCONTRACTORS; OR ON ACCOUNT OF ANY NEGLIGENT ACT OF FAULT OF THE DEVELOPER, CONTRACTOR, THEIR AGENTS, EMPLOYEES, OR SUBCONTRACTORS IN CONSTRUCTION OF THE IMPROVEMENTS OR DAMAGE TO EXISTING CITY INFRASTRUCTURE DUE TO CONSTRUCTION AND RELATED ACTIVITIES OF THE PUBLIC IMPROVEMENTS; AND SHALL PAY ANY JUDGMENT, WITH COSTS, WHICH MAY BE OBTAINED AGAINST THE CITY GROWING OUT OF SUCH INJURY OR DAMAGE. 13. Severability. In the event that any provision or portion of this Contract shall be found to be illegal, invalid, or unenforceable, then such provision or portion shall be amended by the Parties in compliance with applicable law. The illegality, invalidity, or unenforceability of any provision or potion of this Contract shall not affect in any way the legality, validity, or enforceability of any other provision or portion of this Contract. Page 13 of 16 [Signature Pages to Follow] Page 14 of 16 DEVELOPER Developer Name: By:_______________________________________ Printed Name: ______________________________ Title: _____________________________________ Date Signed: _______________________________ Page 15 of 16 CONTRACTOR Contractor Name: By: _______________________________________ Printed Name: ______________________________ Title: _____________________________________ Date Signed: _______________________________ CITY OF DENTON Signature: _________________________________ Printed Name: ______________________________ Title: _____________________________________ Date Signed: _______________________________ THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED As to financial and operational obligations and business terms. Signature: _________________________________ Printed Name: ______________________________ Title: _____________________________________ Rev. April 21, 2026 PROJECT NO._______________ CONTRACT TYPE __________ BOND NO.__________________ MAINTENANCE BOND THE STATE OF TEXAS § § COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS: that__________________________ of the City of _____________________, County of _________________, State of ___________ (the “Principal” or “Contractor”), and________________________________ (“Surety”) organized and existing under the laws of the State of _______and fully licensed to transact business in the State of Texas as surety are held and firmly bound unto the City of Denton, Texas, a Municipal Corporation, organized and existing under the laws of the State of Texas (“City”) in the penal sum of __________________________dollars ($_______________________________) for the payment whereof, the said Principal and Surety bind themselves, and their heirs, administrators, executors, successors, and assigns, jointly and severally, by these presents: WHEREAS, the Principal has entered into a certain written contract with the City of Denton, Texas, dated the ____ day of ___________, 20___, to which said contract is hereby referred to and made a part hereof as if fully set forth herein (the “Contract”), to furnish all materials, equipment labor, and other accessories as defined by law, in the prosecution of the Public Improvements, as defined in the Contract and designated as ______________________ __________________________; and MAINTENANCE BOND Page 2 of 4 NOW THEREFORE, the Principal binds itself to use such materials and workmanship and of such kind and quality that for a period of two (2) years from the completion and final acceptance of the improvements by the City as defined in the Contract, the said improvements shall require no repairs, the necessity for which shall be occasioned by defects in workmanship or materials and during the period of two (2) years following the date of the final acceptance of the work by the City, the Principal binds itself to repair or reconstruct the said improvements in whole or in part at any time within said period and that it will, upon receiving notice, repair or reconstruct said improvements from the date of such notice as the City shall determine to be necessary. If said Principal does not repair or reconstruct the improvements within the time period designated, then the City shall be entitled to have said repairs made and charge said Principal and/or Surety the cost of the same under the terms of this Maintenance Bond. NOW, THEREFORE, the condition of this obligation is such that the Surety guarantees the Project against defective workmanship and materials during the maintenance period set forth herein; that Principal shall keep and perform its said work and keep the same in repair for the said maintenance period of two (2) years, as provided; and, THAT PRINCIPAL HOLDS HARMLESS AND INDEMNIFIES SAID CITY FROM ANY CLAIM OR LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGE CAUSED BY AND OCCURRING DURING THE PERFORMANCE OF SAID MAINTENANCE AND REPAIR OPERATION, then these presents shall be null and void and have no further effect, but if default shall be made by said work or materials or Principal, then these presents shall remain in full force and effect, and the City shall have and recover from the Principal and Surety, jointly and severally, their heirs, administrators, executors, successors, and assigns, all damages, costs, and expenses. And in this regard, Principal and Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors, and assigns to the City. MAINTENANCE BOND Page 3 of 4 PROVIDED, HOWEVER, that Surety acknowledges and represents that it is duly authorized to do business in the State of Texas, that it is authorized and admitted to write surety bonds in the State of Texas, and that its obligations under this Maintenance Bond are intended to be in all respects in full and complete compliance with every law, charter, rule, or regulation that this Maintenance Bond may be subject to. AND PROVIDED FURTHER, that the Surety, for value received, stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract, or to the work to be performed thereunder, or the Plans and Specifications accompanying the same, shall in any way affect its obligation on this Bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the contract, or to the work to be performed thereunder. [Signature Page to Follow] MAINTENANCE BOND Page 4 of 4 IN WITNESS WHEREOF, the Principal and Surety have each SIGNED and SEALED this instrument by duly authorized agents and officers on this the day of 20___. PRINCIPAL SURETY BY:_________________________________ BY:_______________________________ TITLE: TITLE: ADDRESS: ADDRESS: (SEAL) The name and address of the Resident Agent of the Surety for delivery of notice and service of the process is: ______________________________________________________________________________ ______________________________________________________________________________ NOTE: The date of the bond shall not pre-date the executed Development Contract. If the Resident Agent is not a corporation, list an individual’s name. Rev. April 21, 2026 PROJECT NO._________________ CONTRACT TYPE_____________ BOND NO.____________________ PAYMENT BOND THE STATE OF TEXAS § § COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS: that _________________________________ of the City of _____________________, County of _________________, State of _____________, (“Contractor” or the “Principal”), and _________________________________ (“Surety”), existing under the laws of the State of , and fully licensed to transact business in the State of Texas as surety, are held and firmly bound unto the City of Denton, Texas, hereinafter referred to as “Beneficiary”, in the penal sum of ___________________dollars ($___________________________) for the payment whereof, the said Principal and Surety bind themselves, and their heirs, administrators, executors, successors, and assigns, jointly and severally, by these presents: WHEREAS, the Principal has entered into a certain written contract with the Beneficiary dated the ____ day of ___________, 20___, to which said contract is hereby referred to and made a part hereof as if fully set forth herein (the “Contract”), to furnish all materials, equipment labor, and other accessories as defined by law, in the prosecution of the Public Improvements, as defined in the Contract and designated as ______________________________________________________; and NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, if the Principal shall well, truly and faithfully perform its duties and make prompt payment to all persons, firms, subcontractors, corporations, and claimants supplying labor and/or material in the prosecution of the Work provided for in said Contract and any and all duly authorized modifications of said Contract PAYMENT BOND Page 2 of 4 that may hereafter be made, notice of which modification to the Surety is hereby expressly waived, then this obligation shall be null and void; otherwise it shall remain in full force and effect. Should Principal fail to promptly pay claimants for all labor, subcontracts, materials, and specially fabricated materials performed or furnished under or by virtue of the Contract, Surety is hereby bound to make such payments on behalf of Principal up to a total aggregate amount equal to the penal sum of the Payment Bond. Labor, subcontracts, materials, and specially fabricated materials shall be construed in accordance with Chapter 2253, Texas Government Code. PROVIDED, HOWEVER, Principal is required to furnish this Payment Bond in order to comply with the provisions of Chapter 2253, Texas Government Code, and all other applicable laws, all rights and remedies on this Payment Bond shall inure solely to such claimants and shall be determined in accordance with the provisions, conditions, and limitations of the aforesaid Government Code to the same extent as if they were copied at length herein. PROVIDED FURTHER, that if any legal action be filed upon this Payment Bond, exclusive venue shall lie in Denton County, Texas. AND PROVIDED FURTHER, that the Surety, for value received, stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract, or to the work to be performed thereunder, or the Plans and Specifications accompanying the same, shall in any way affect its obligation on this Payment Bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Contract, or to the work to be performed thereunder. This Payment Bond is made and executed in compliance with the provisions of the Texas Government Code, Chapter 2253, and any other applicable statues of the State of Texas, and all liabilities on this Payment Bond shall be determined in accordance with said provisions to the same extent as if they were copied at length herein. The undersigned and designated agent is hereby designated by the Surety herein as the Resident Agent in Texas to whom any requisite notices may be delivered and on whom service of PAYMENT BOND Page 3 of 4 process may be had in matters arising out of such suretyship. [Signature Page to Follow] PAYMENT BOND Page 4 of 4 IN WITNESS WHEREOF, the Principal and Surety have each SIGNED and SEALED this instrument by duly authorized agents and officers on this the______day of____________20__. PRINCIPAL SURETY BY:_________________________________ BY:_______________________________ TITLE:______________________________ TITLE: ____________________________ ADDRESS:___________________________ ADDRESS:_________________________ ____________________________________________ __________________________________________ ____________________________________________ __________________________________________ (SEAL) The name and address of the Resident Agent of the Surety for delivery of notice and service of the process is: __________________________________________________________________________________ __________________________________________________________________________________ NOTE: The date of the Payment Bond shall not pre-date the executed Development Contract. If the Resident Agent is not a corporation, list an individual’s name. Rev. April 21, 2026 PROJECT NO. CONTRACT TYPE BOND NO. PERFORMANCE BOND THE STATE OF TEXAS § § COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS: that _________________________________ of the City of _____________________, County of _________________, State of _____________, (“Contractor” or the “Principal”), and _________________________________ (“Surety”), organized and existing under the laws of the State of _______and fully licensed to transact business in the State of Texas as surety, are held and firmly bound unto the City of Denton, Texas, a Municipal Corporation, organized and existing under the laws of the State of Texas hereinafter referred to as “Beneficiary”, in the penal sum of_____________________________ dollars ($_______________________________) for the payment whereof, the said Principal and Surety bind themselves, and their heirs, administrators, executors, successors, and assigns, jointly and severally, by these presents: WHEREAS, the Principal has entered into a certain written contract with the Beneficiary dated the ____ day of ___________, 20___, to which said contract is hereby referred to and made a part hereof as if fully set forth herein (the “Contract”), to furnish all materials, equipment labor, and other accessories as defined by law, in the prosecution of the Public Improvements, as defined in the Contract and designated as ______________________________________________________; and NOW, THEREFORE, if the Principal shall well, truly, and faithfully perform and fulfill all of the undertakings, covenants, terms, conditions, and agreements of said Contract in accordance with the Plans and Specifications as defined therein during the original term thereof, and any extension thereof which may be granted by the Beneficiary, with or without notice to the Surety, and during the life of PAYMENT BOND Page 2 of 4 any guaranty or warranty required under this Contract, and shall also well and truly perform and fulfill all the undertakings, covenants, terms, conditions, and agreements of any and all duly authorized modifications of said Contract that may hereafter be made, notice of which modifications to the Surety being hereby waived; and, IF THE PRINCIPAL SHALL FULLY INDEMNIFY AND SAVE HARMLESS THE BENEFICIARY FROM ALL COSTS AND DAMAGES WHICH BENEFICIARY MAY SUFFER BY REASON OF FAILURE TO SO PERFORM HEREIN AND SHALL FULLY REIMBURSE AND REPAY BENEFICIARY OF ALL OUTLAY AND EXPENSE WHICH THE BENEFICIARY MAY INCUR IN MAKING GOOD ANY DEFAULT OR DEFICIENCY, then this obligation shall be void; otherwise, it shall remain in full force and effect. Should the Principal fail to faithfully and strictly perform the work as required by the Contract in all its terms, the Surety will be liable for all damages, losses, expenses, and liability that the Principal may suffer in consequence thereof. PROVIDED, Principal is required to furnish this Performance Bond in order to comply with the provisions of Chapter 2253, Texas Government Code and all other applicable laws, all rights and remedies on this Performance Bond shall inure solely to such claimants and shall be determined in accordance with the provisions, conditions, and limitations of the aforesaid Government Code to the same extent as if they were copied at length herein. PROVIDED FURTHER, that if any legal action be filed on this Performance Bond, exclusive venue shall lie in Denton County, Texas. AND PROVIDED FURTHER, that said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract, or to the work performed thereunder, or the Plans and Specifications accompanying the same shall in any way affect its obligation on this Performance Bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Contract, or to the work, or to the Plans and Specifications. This Performance Bond is made and executed in compliance with the provisions of the PAYMENT BOND Page 3 of 4 Texas Government Code, Chapter 2253, and any other applicable statues of the State of Texas, and all liabilities on this Performance Bond shall be determined in accordance with said provisions to the same extent as if they were copied at length herein. The undersigned and designated agent is hereby designated by the Surety herein as the Resident Agent in Texas to whom any requisite notices may be delivered and on whom service of process may be had in matters arising out of such suretyship. [Signature Page to Follow] PAYMENT BOND Page 4 of 4 IN WITNESS WHEREOF, this instrument is executed by the Principal and the Surety this on this this the________day of _________________20______. PRINCIPAL SURETY BY:_________________________________ BY:_______________________________ TITLE:______________________________ TITLE:____________________________ ADDRESS:___________________________ ADDRESS:_________________________ (SEAL) ATTEST: SECRETARY The name and address of the Resident Agent of the Surety for delivery of notice and service of the process is: ________________________________________________________________________________ ____________________________________________________________________________ NOTE: The date of the Performance Bond shall not pre-date the executed Development Contract. If the Resident Agent is not a corporation, list an individual’s name.