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Improvements pursuant to plans and project bond estimates entitled: A. "Improvement Plans—Tract 8259 —Sycamore,"prepared by Ruggeri-Jensen-Azar, dated February 7, 2018; Preliminary Engineer's Opinion of Probable Cost, dated February 27, 2018; and subsequent revisions to the plans as prepared by Ruggeri-Jensen-Azar and approved by the City Engineer. B. Joint Trench and Public Street Lighting Plans, prepared by Giacalone Design Services, Inc., dated November 21, 2017, and subsequent revisions to the plans as prepared by Giacalone Design Services, Inc., and approved by the City Engineer. C. Valley Trails Landscape Construction Documents, prepared by Ripley Design Group, Inc., dated February 23, 2018, and subsequent revisions to the plans as prepared by Ripley Design Group, Inc., and approved by the City Engineer. 3. Reimbursement for Water Line Replacement Work. The improvements in Section 2 include the replacement of an existing public water main on Valley Trails Drive fronting the development. This work includes: (1) abandonment of the existing public water main and installation of a new public water main on Valley Trails Drive between Petrified Forest Court and Lassen Street; (2) installation of water main extensions from the proposed water main on Valley Trails Drive into Petrified Forest Court, Grand Canyon Court, Mesa Verde Court, and Lassen Street to accommodate future water main replacements in those streets without disruption to proposed pavement treatments that will be completed on Valley Trails Drive by the development; and(3) installation of a new service lateral to an existing fire hydrant on Valley Trails Drive ("water line replacement work"). The water line replacement work is estimated to cost $234,643. Upon acceptance by the City of the water line replacement work, Subdivider shall submit to City a cost certification of all costs expended by Subdivider to complete the water line replacement work. The City shall reimburse Subdivider 75% of reasonable cost of the water line replacement work as determined by the City Engineer and in an amount not to exceed $175,982.25. Any changes to the plans for the water line work shall be approved by the City Engineer, and any cost increases resulting from such changes shall be subject to the not to exceed amount provided in this section. 4. Inspection. City shall inspect all of said work through an inspector employed by City at the cost and expense of Subdivider and Subdivider shall pay City the cost of such inspection as fixed by Ordinance. The City Engineer has tentatively fixed the inspection costs due upon execution of this Agreement as follows: $155,108 5. Soils Report. Subdivider has provided a preliminary soils report as required by Government Code §§66490 et. seq. Said data was compiled by a qualified soils testing engineer without expense to the City. Subdivision Agreement Tract 8259—Ponderosa Homes II,Inc. Page 2 of 7