GHC LUND RANCH LLC, TRACT 8352, SUBDIVISION AGMT

Security in the form of cash, letter of credit, or bond is required in the following three areas: performance, labor and materials, and maintenance. The performance security shall be in the amount of 100% of the total estimated cost of the work for each stage of development, conditioned upon faithful performance of this Agreement. The labor and materials security shall be in the amount of 100% of the total estimated cost of the work for each stage of development. The maintenance security shall be in the amount of ten percent (10%) of the estimated value of the public improvements. The total estimated cost of the improvements is: $6,841,000.00 Performance Security/Labor and Materials Security: In the event of any breach by Subdivider, City may take over the work and prosecute the same to completion by any method the City deems advisable. Said work shall be for the account and at the expense of the Subdivider. Subdivider shall be liable to the City for any excess costs or damages suffered by the City. The City shall release the faithful performance and labor and materials security forty-five days after the recordation of the Notice of Completion. Maintenance and Defect Security: Subdivider shall be responsible for maintaining the improvements for a full year from the date of recordation of the Notice of Completion. Subdivider shall also be liable for defects in workmanship and materials on all of the above described improvements and shall maintain security for liability against such defects. The City shall release the maintenance security one year after the City Council's acceptance of the project provided all warranty and maintenance work is acceptable to the City. 8. Financing. In the event City and the Subdivider enter a contract upon mutually agreeable terms providing an appropriate special assessment act for financing and improvement of streets and easements, the City may consent to the following: a. The inclusion of this tract and other lands within said contracts, and b. The release of improvement security as defined in Section 66499 of the Government Code, where the assessment contract has filed surety bonds for said improvements. 10. Workers'Compensation. Before commencing work under this contract, Subdivider shall take out and maintain during the course of this Agreement such worker's compensation insurance as required by the laws of the State of California. If the Acting General Contractor is not the Subdivider, then the General Contractor will provide the City with said certificate of worker's compensation insurance prior to start of construction. On failing to do so, the City may procure such insurance for the Subdivider and the Subdivider shall pay the cost. 11. Hold Harmless Agreement. Subdivider hereby agrees to and shall hold City, its elective and appointive Boards, Commissions, officers, agents, and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims from property damage which may arise from Subdivider's contractors', subcontractors', agents', or employees' operation under this Agreement, whether such operations be by Subdivider or by any of Subdivider's contractors, subcontractors, or by any one or more persons directly employed by, or acting as agent for, Subdivider or any of Subdivider's contractors or subcontractors. Subdivider agrees to, and shall, defend City and its SUBDIVISION AGREEMENT TRACT NO.8352 Page 3 of 7