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I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work of this Contract. (i) In accordance with the provisions of Section 1727 of the California Labor Code, City, before making payment to Contractor of money due under a contract for public works, shall withhold and retain therefrom all amounts which have been forfeited pursuant to any stipulation in the Contract, and the terms of Chapter 1, Part 7, Division 2 of the California Labor Code (commencing with Section 1720). But no sum shall be withheld, retained or forfeited, except from the final payment, without a full investigation by either the Division of Labor Law Enforcement or by City. 5. It is hereby agreed by the parties to the Agreement that in case all work called for under the Agreement is not finished or completed on or before the time set forth in this Agreement, damage will be sustained by City, and that it is and will be impracticable and extremely difficult to ascertain and determine the actual damage which the City will sustain in event of and by reason of such delay; it is therefore agreed Contractor will pay to City the sum calculated at the rate of Five Hundred and No/100 dollars ($500.00) per day as liquidated damages for each and every calendar day's delay in finishing the work in excess of the number of days prescribed, and Contractor agrees to pay said liquidated damages as herein provided, and in case the same are not paid, agrees that City may deduct the amount thereof from any monies due or that may become due under this Agreement. It is further agreed that in case the work called for under this Agreement is not completed in all of its parts and requirements within the number of calendar days specified, City shall have the right to increase the number of calendar days or not, as may seem best to serve the interest of City; and if it is decided to increase the said number of calendar days, City shall further have the right to charge to Contractor, and deduct from the final payment for the work, all or any part, as City may deem proper, of the actual cost of engineering, inspection, superintendence, and other overhead expenses of City which are directly chargeable to this Agreement, except that the cost of final surveys and the preparation of the final estimate shall not be included in such charges to be paid by Contractor. 6. Except as otherwise may be provided herein, Contractor hereby expressly guarantees for one (1) full year from the date of the final completion of the work under this Agreement and acceptance thereof by City's City Council, to repair or replace any part of the work performed hereunder which constitutes a defect resulting from the use of inferior or defective materials, equipment or workmanship. If, within said period, any repairs or replacements in connection with the work are, in the opinion of the City Engineer, rendered necessary as a result of the use of inferior or defective materials, equipment or workmanship, Contractor agrees, upon receipt of notice from City, and without expense to City, to promptly repair or replace such material or workmanship and/or correct any and all defects therein. If Contractor, after such notice, fails to proceed promptly to comply with the terms of this guarantee, City may perform the work necessary to effectuate such correction and recover the cost thereof from Contractor or his sureties. Agmt-418 DES:djk F:/Shared/Redwood/Couneil 11/06/00 4