1 Mary Alice McNamara is 2VP & Counsel for the National Accounts - PowerPoint PPT Presentation

THE SURETY UNDERWRITER’S DESK BOOK Chad L. Schexnayder Mary Alice McNamara Jennings, Haug & Travelers Bond & Financial Cunningham LLP Products Phoenix, Arizona Hunt Valley, Maryland 1

Mary Alice McNamara is 2VP & Counsel for the National Accounts unit of Travelers Bond & Financial Products. She came to Travelers when she joined a predecessor company, USF&G, in 1997 as a Surety Claim Attorney. In 2000 she became Senior Corporate Counsel for St. Paul Surety providing legal services and advice to the surety group on regulatory, agency, and contract/transactional matters. In 2004, after the merger of St. Paul and Travelers, she began working with the National Accounts unit of Travelers Bond and was promoted to 2VP & Counsel for the National Account unit in April 2010. Ms. McNamara is a frequent presenter and is a Vice Chair of the ABA/TIPS Fidelity & Surety Law Committee, a Co-Chair of the Underwriting and Risk Management Subcommittee of the ABA/TIPS Fidelity & Surety Law Committee, and Co-Editor of The Surety Underwriter’s Desk Book. Chad L. Schexnayder is a partner with Jennings, Haug & Cunningham, LLP. Consistent with his firm’s more than 75 year history of service, his practice emphasizes representation of sureties. In addition his practice includes creditor representation of surety clients before the United States Bankruptcy Court. Mr. Schexnayder is an author of American Bar Association publications, including the Law of Payment Bonds (1st and 2nd ed.), Law of Performance Bonds(1st and 2nd ed.), Law of Miscellaneous and Commercial Surety Bonds(1st and 2nd ed.), and The Surety’s Indemnity Agreement: Law and Practice, 2nd Ed. He is the editor of the Quick Reference Guide to Western States Surety Law (WSSC 2012), and a co-editor of The Surety Underwriter’s Desk Book (ABA 2013). Mr. Schexnayder is a frequent presenter and he currently serves as a Vice-Chair of the Fidelity and Surety Law Committee of the American Bar Association’s Tort and Insurance Practice Section and is a member of the ABA Forum on the Construction Industry. 2

3

Nationwide Surety and Fidelity The Surety Underwriter’s Desk Book 0.01 Indemnity Issues 0.02 Bond Issues 0.03 Financial Risk Issues 0.04 Contract Issues 0.05 Common Bankruptcy Issues 0.06 Principal Issues in Environmental Law 0.07 Issues in Certain Federal Contracts 4

0.01 INDEMNITY ISSUES [A] Parties to the Indemnity Agreement [1] Individuals` [7] Trusts [2] Sole Proprietors [8] ESOPS [3] Corporations [9] Foreign Ownership [4] LLCs [10] Publicly Traded [5] Partnerships [11] Sovereign Entities [6] Joint Ventures [B] Consideration for the Indemnity Agreement [C] Execution of the Indemnity Agreement [1] Execution by Principal and Indemnitors [2] Delivery [3] Acceptance by Surety [4] Confirmation by Surety [5] Non-Signing Parties [6] Resolutions [7] Seal [D] Multiple Indemnity Agreements [E] Change in Control Issues [F] Enforcement Issues 5

Nationwide Surety and Fidelity 0.02 BOND ISSUES [A] Parties to Bond [1] Principal, Obligee or Obligees, Surety [2] Types of Entities Public Private Partnership [a] Statutory Scheme [b] Financing [c] Lease/Lease-Backs [3] Sovereign Immunity of Entity [B] Execution and Delivery of Bonds [1] Declining to Execute [2] Prerequisites to Execution & Delivery [3] Legal Delivery & Legal Acceptance [4] Renewal, Cancellation, Rescission [C] Particular Statutory Bonds [D] Bid Bond Issues [E] Payment Bond Issues [F] Performance Bond Issues [G] Recognized Exceptions to Surety Penal Sum Limitation [H] Foreign Bonds [I] Miscellaneous Bond Issues [J] Minimum Limitations Period Permissible in Bond [K] Court Interpretation of Statutory Bonds 6

0.03 FINANCIAL RISK ISSUES [A] Assets Available [B] Intercreditor Risks/Surety & Secured Lender Relationships Subordination Agreements [C] Collateral [D] Verification of Project Financing [E] Subcontractor Default [F] Insurance Coverage to Mitigate Risk [1] Construction Insurance [2] Contractor Default Insurance [G] Funds Administration [H] Retention [I] Joint Check Arrangements [J] Prompt Pay Statutes [K] Trust Fund Statutes [L] Co-Surety Relationships [M] Financial Statements of Individual Indemnitors 7

0.04 CONTRACT ISSUES [A] Payment Clauses [B] Pay When Paid and Pay If Paid Clauses [C] Evidence of Financing Clauses [D] Force Account/Changes Clauses [E] Site Conditions [F] Force Majeure Clauses [G] Phasing [H] Damages Clauses [I] No Damage For Delay Clauses [J] Prospective Lien Waiver Clauses [K] Trust Fund Clause [L] Indemnification/Hold Harmless Clauses [M] Assignment and Anti-Assignment Clauses [N] Flow Down/Conduit Clauses [O] Default, Suspension, Termination Clauses [P] Disputes Clauses Forum Selection and Choice of Law Litigation, Alternative Dispute Resolution, Binding Arbitration, Mediation [Q] Hazardous Materials Clauses 8

NATURE OF THE OBLIGATION [A] Warranty [B] Design Build [C] Performance Specifications [D] Savings Guarantees [E] LEED Certification [F] Efficiency Promises [G] Operation and Guarantee obligations 9

0.05 COMMON BANKRUPTCY ISSUES 0.06 PRINCIPAL ISSUES IN ENVIRONMENTAL LAW 0.07 ISSUES IN CERTAIN FEDERAL CONTRACTS [A] IDIQ, MATOC, MACC [B] Seed projects [C] Phasing [D] Federal Projects outside of the U.S. [E] Small Business Programs 10

11

Nationwide Surety and Fidelity 12

13

14

Fidelity & Surety Law Committee 15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Nationwide Surety and Fidelity 31

Add suggestion box 32

Add suggestion box 33

34

Roy T. Ogawa Ogawa, Lau, Nakamura & Jew Idaho Jan D. Sokol, Thomas A. Larkin, Jesse C. Ormond Stewart Sokol & Gray, LLC Illinois John E. Sebastian Watt, Tieder, Hoffar & Fitzgerald, LLP Indiana Julia Blackwell Gelinas, Brian Falcon Frost Brown Todd, LLC Iowa John F. Fatino, Drew J. Gentsch Whitfield & Eddy, PLC Kansas Lawrence Lerner, Ryan C. Westhoff Levy Craig Law Firm Kentucky Timothy D. Martin Ward, Hocker & Thornton, PLLC Louisiana David J. Krebs Krebs, Farley & Pelleteri, PLLC Maine Paula-Lee Chambers Hinshaw & Culbertson LLP Maryland Lauren P. McLaughlin, Shiva S. Hamidinia BrigliaMcLaughlin, PLLC 35 Massachusetts

36

If you do not have the opportunity to have your question addressed during the Seminar, you may contact the presenter directly: Chad L. Schexnayder Mary Alice McNamara Jennings, Haug & Cunningham LLP Travelers Bond & Financial Products 2800 N. Central Avenue, Suite 1800 111 Schilling Road Phoenix, AZ 85004-1049 Hunt Valley, MD 21031-1110 Business: (602) 234-7800 Business: (443) 353-2130 Fax: (602) 277-5595 Fax: (443) 353-1137 E-mail: cls@jhc-law.com E-mail: mmcnamar@travelers.com , AZ 85004-1049 Hunt Valley, MD 21031-1110 37