AUF DER MAUR PUBLIC IMPROVEMENT PM 7885 2002

Instruments of credit shall be in an amount not less than 100% of the total estimated cost of improvements which is as follows: $168,650.00 In the event of any breach. by Developer, 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 Developer. Developer shall be liable to the City for any excess costs or damages suffered by the City. City and Developer acknowledge and agree that Developer's security obligations hereunder shall be satisfied by delivery of a letter of credit (the "L/C") providing for multiple draws. In the event of a breach by Developer of its construction obligations hereunder, if the City undertakes such work as described herein, City shall be entitled to declare Developer in default hereunder and draw on the letter of credit, in whole or in part, in accordance with terms thereof, for and to the extent of the cost of such work and/or such damages suffered by the City. 8. Financing. In the event City and the Developer 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 commercial property 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. 9. Defects. Developer shall be liable for defects in workmanship and materials on all of the above described improvements for a period of one (1) year after acceptance and, as security for liability against such defects, Developer shall file improvement or maintenance security, pursuant to section 7 above, with the City Clerk, of a type approved by the City Attorney, in the amount often (10) percent of the total estimated cost set forth above. 10. Workers' Compensation. Before commencing work under this contract, Developer 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 Developer, 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 Developer and the Developer shall pay the cost. Public Improvement Agreement 10/23/2002 Auf der Maur/Rickenbach, PM 7885 Page 4 of 9