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Contract balance shall not be reduced or set off on account of any obligation, contractual or <br />otherwise, except the reasonable construction cost incurred in completing the Construction Work. <br />5. Any suit by Obligee under this bond must be instituted before the earlier of: (a) the <br />expiration of one year from the date of substantial completion of the Construction Work, or (b) one <br />year after Principal ceased performing the Construction Work, excluding warranry work. If the public <br />works bond statutes in the location where the Construction Work is being performed contains a <br />statu[e of limitations for suits on the performance bond, then the limitation period set forth herein shall <br />be read out of this bond and the statute of limitation set forth in the public works bond statutes shall <br />be read into this bond. If the limitation set forth in this bond is void or prohibited by law, the minimum <br />period of limitation available lo sureties as a defense in the jurisdiction of the suit shall be applicable, <br />and said period of limitation shall be deemed to have accrued and shall commence to run no later <br />ihan (y) the date of substantial completion of the Construction Work, or (z) the dale Principal ceased <br />performing Construction Work, excluding warranty work, whichever occurs first. <br />6. A Claimant is defined as one other than Obligee having a contract with Principal or <br />with a direct subcontractor of Principal to supply labor and/or materials and said labor and/or material <br />is actually used, consumed or incorporated in the performance of the Construction Work under the <br />Contract. <br />7. Principal and Surety hereby jointly and severally agree with Obligee that every <br />Claimant as herein defined who has not been paid in full before the expiration of a period o( ninety <br />(90) days after lhe date on which the last of such Claimant's work or labor was done or performed or <br />materials were furnished by such Claimant, may bring suil on this bond, prosecute the suit to final <br />judgment for the amount due under,Claimant's contract for the labor and/or material suppiied by <br />Claimant which wes 2ctually used, consumed or incorporated in the perfonnance of the Construction <br />Work, and have execution thereon; provided, however, that a Claimant having a direct contrectuai <br />relationship with a subcontractor of Principal shall have a right of action on this bond only if said <br />Claimant nolifies Surety in writing of its claim within ninety (90) days from the date on which said <br />Claimant did or supplied the last labor and/or materials for which the claim is made. Obligee shall not <br />be liable for the payment of any costs or expenses of any such suit. <br />8. No suit or action shall be commenced hereunder by any Claimant after the expiration <br />of the earlier of: (a) one year after the day on which Claimant last supplied the labor and/or materials <br />for which the claim is made; or (b) the limitation period set forth in the public works bond statutes, if <br />any, in the location where the construction work is being performed. Any limitation contained in this <br />bond which is prohibited by any law controlling in the state where the suit is filed shall be deemed to <br />be amended so as to be equal to the minimum period of limitation permitted by the law oi that state, <br />and said period of limitation shall be deemed~to have accrued and shall commence to run on ihe day <br />Claimant last supplied the labor and/or materials for which the claim is made. <br />9. No suit or action shall be commenced hereunder by Obligee or any Claimant other <br />ihan in a state court of competent jurisdiction in the county or other political subdivision of the state in <br />which the project, or any part thereof, is situated, or in the United States District Couri for the district <br />in which the project, or any part thereof, is situated, and not elsewhere. <br />10. The amount of this bond shall be reduced by and to the extent of any payment or <br />payments made by Surety in good faith hereunder whether made directly to Obligee or Claimant(s) or <br />otherwise In discharge of Principal's obligations. Surety's liability hereunder to Obliyee and ali <br />Claimants is limited, singly, or in the aggregate, to the penal sum of the bond set forth herein. Surety <br />may, at its option, discharge all obligations under this bond by interpleading into the registry of any <br />court of competent jurisdiction of the full unused penal sum of this bond, or such portion thereof that <br />will satisfy the obligations owed to Obligee and/or Claimant(s). No right of action shall accrue on this <br />bond to any person or entity other than Obligee and/or Claimant(s). The bond shall not afford <br />coverage for any liability of Principal for tortious acts, whether or not said iiability is direct or is <br />Paymenl and Performance Bond - Page 2 of 3 <br />