BERNAL INVESTMENT VALLEY AVENUE EXTENSION

f. Security. Upon execution of this First Amendment, BIC shall present to the City improvement security as defined in Section 66499 of the Government Code of the State of California. Any additions, alterations or modifications to this Agreement or the Plans shall not release any surety on the improvement security given in connection with this Agreement. The improvement security as approved by the City Attorney, shall consist of the following as determined by the City: cash deposit made with the City; bonds by duly authorized corporate sureties admitted to transact surety business in the State of California; or instruments of credit from financial institutions subject to regulation by state or federal government. BIC shall provide the following: i. Security in the amount of 100% of the total estimated cost of the Improvements to secure faithful performance of the Agreement as amended; ii. Security in the amount of 100% of the total estimated cost of the Improvements to secure payment for labor and materials; and iii. Security in the amount of 10% of the total estimated cost of the Improvements to secure maintenance obligations for a period of one year. The total estimated cost of Improvements is: $2,146,680, excluding the estimated cost of the BIC Channel Relocation Improvements that shall be set forth in a subsequent amendment to this Agreement. In the event of any material breach of this Agreement by BIC, after the City has provided BIC with written notice of the breach and an opportunity to cure the breach and BIC has failed to cure the breach, City may take over completion of the Improvements 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 BIC. BIC shall be liable to the City for any excess costs or damages suffered by the City. The City shall release the faithful performance bond thirty (30) days after the recordation of the Notice of Completion. The City shall release the labor and materials bond thirty (30) days after recordation of the Notice of Completion provided that no stop notices have been filed. The City shall release the maintenance bond one (1) year after the recordation of the Notice of Completion provided all warranty work is completed to the satisfaction of the City. g. Defects. BIC shall be liable for defects in workmanship and materials on all of the Improvements for a period of one (1) year after acceptance. h. Street Lights. City shall, before or after acceptance of Improvements, give a "turn-on" order to the power company for only those street FIRST AMENDMENT TO VALLEY AVENUE EXTENSION UNDERPASS AGREEMENT Page 4 of 8