BAY AREA SELF STORAGE - PUBLIC IMPROVEMENT AGMT 2003

7. Securit . On signing this Agreement, the Developer shall present to the City and file with the City Clerk, improvement security as defined in Section 66499 of the Government Code of the State of California. Said improvement security as approved by the City Attorney, shall consist of the following as determined by the City: a. cash deposit made with the City, or b. bonds by duly authorized corporate sureties, or c. instruments of credit from financial institutions subject to regulation by state or federal government, or d. bonds of a duly authorized surety company covering all or a portion of said improvements required herein where a contract for improvements has been let through an assessment district proceeding, and where said bonds have been filed with the City Clerk rp for to the execution of this Agreement, as apart of the existing improvement district proceedings, and e. a maintenance bond for a period of one year from the recordation date of the notice of completion which follows the final acceptance by the City Council of said public improvements valued at ten percent (10%) of the estimated value of the public improvements. One bond 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, one bond in the amount of 100% of the total estimated cost of the work for each stage of development shall secure payment for labor and materials, and one bond in the amount of ten percent (10%) of the estimated value of the public improvements shall secure such maintenance cost. Instruments of credit shall be in an amount not less than 100% of the total estimated cost of improvements which is as follows: $186,700.00 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 Public Improvement Agreement 8/14/02 Bay Area Self Storage, 3101 Valley Avenue Page 3 of 8