PONDEROSA HOMES II DEFERRED AGREEMENT

WHEREAS, said plans and project Conditions of Approval designate construction of Public Improvements, that the Subdivider intends to construct and dedicate to the City; and WHEREAS, as a condition precedent to accepting this offer of dedication by Subdivider, City requires the improvements of the public ways, installation or extension of certain City services at Subdivider's expense and certain protection for the City on behalf of the public; NOW, THEREFORE, in consideration of the faithful performance of the promises, terms, conditions and covenants set forth herein by Subdivider and the approval of the project, the parties hereto agree as follows: 1. Time of Essence. Time is of the essence in the performance of this Agreement. The work and improvements required by this Agreement would not be required to be constructed until deemed necessary by the City Engineer in writing, at which time they would have one year from the notice in which to complete or revise the plans and construct the improvements. The City may extend the time for completion of improvements hereunder, upon good cause being shown by the Subdivider. Any such extension may be granted without notice to the Subdivider's surety, any extension so granted shall not relieve the surety's liability on the bond to secure the faithful performance of this Agreement. 2. Work. Subdivider will do or cause to be done and performed the following described work: a) "Iron Horse Trail and Associated Landscaping Improvements" from Busch Road to Mohr Avenue designed by Isaacson, Wood And Associates dated September 29, 2003, and subsequent revisions to the plans prepared by Isaacson, Wood And Associates and approved by the City Engineer; and b) "Free running right lane at Valley Avenue and Stanley Boulevard" designed by Ruggeri Jensen Azar & Associates dated September 4, 2003 and subsequent revisions to the plans prepared by Ruggeri Jensen Azar & Associates and approved by the City Engineer; and c) "Bernal Avenue Dual Left Turn Lane Widening at Bernal Avenue/Sunol Boulevard/First Street" designed by Ruggeri Jensen Azar & Associates dated July 14, 2003 and subsequent revisions to the plans prepared by Ruggeri Jensen Azar & Associates and approved by the City Engineer; and d) "Design and construct a storm drain system along the east side of Martin Avenue from Mohr Avenue to existing pipe stub-out at the north end of Martin Avenue." Offsite Public Improvement Agreement for items to be constructed with future Tract Project: Tentative Map -Tract 7381, Busch Road/Mohr Avenue Page 2 of 9