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REV: 12-20-2022 JB (a) Performance Security. Prior to the initial issuance of an encroachment permit under this Agreement, Company shall furnish and deliver a performance security (the “Durable Performance Security”) in the amount equal to one hundred percent (100%) of the cost of the work to be performed by or on behalf of Company within and affecting the Public Rights-of-Way to guarantee and assure the faithful performance of Company’s obligations under this Agreement. City shall have the right to draw against the surety bond in the event of a default by Company or in the event that Company fails to meet and fully perform any of its obligations under this Agreement, provided that Company, consistent with Section 4.2 of this agreement, is first given written notice of any intent to draw against the bond and an opportunity to cure. However, if the City, in its sole discretion, believes that immediate action is required to protect public health and safety, the City may act immediately and will notify the Company of the work performed as soon as reasonably practicable. Following completion of the work by Company, and its inspection and acceptance by the City Engineer, the performance bond shall remain in effect to the extent of ten percent (10%) of the cost of the work to guarantee and assure the faithful performance of Company’s obligations under this Agreement for a period of one year from the City’s acceptance of the work. City shall have the right to draw against the bond in the event of a default by Company or in the event that Company fails to meet and fully perform any of its obligations. The form and content of the performance bond, and the surety issuing such bond, shall be subject to approval by City and shall be in substantially the form attached hereto as Exhibit A. (b) Payment Security. Company shall furnish and deliver a labor and materials security (the “Durable Payment Security”) in the amount of Two Hundred Thousand Dollars ($200,000), prior to the initial issuance of a permit under this Agreement, which security must be acceptable to the City Engineer and shall be in substantially the form attached hereto as Exhibit B. The Durable Payment Security shall secure payment to the contractor(s) and subcontractor(s) performing any work subject to this Agreement and to all persons furnishing labor, materials, or equipment to them (each a potential “Claimant”). If City draws on the Durable Payment Security, subject to Section 4.2 of this Agreement, to pay any Claimant, it will notify Company of the amount drawn, and Company will promptly restore the Durable Payment Security to the full amount of Two Hundred Thousand Dollars ($200,000). City shall retain the Durable Payment Security until both (i) one (1) year after the date this Agreement terminates and (ii) the statute of limitations to file an action under Civil Code section 8410 et seq. has expired. 4.2 Recovery. So long as any securities described in Section 4.1 and 4.2 remain in place (each an “Existing Security”), they may be utilized by the City as provided herein for reimbursement of the City by reason of Company’s failure to pay the City for actual costs and expenses incurred by the City with respect to the Facilities, including any expenses for removal under this Agreement. City shall not draw on any Existing Security without first providing Company at least thirty (30) days written notice of any intent to draw against the Existing Security, during which time Company shall have the opportunity to cure any failure to pay any amounts due or to respond to Claimants under Section 4.1(b) by affidavit similar to the process outlined by CA Civil Code Section 9350 et seq. 4.2.1 In the event Company has been declared by the City to be in default of a material provision of this Agreement and if Company fails, within 30 days of receipt of the City’s default notice, to perform any of the conditions of this Agreement, or fails to begin to perform any such condition that may take more than 30 days to complete, City may thereafter obtain from the applicable Existing Security, after proper claim is made to the surety, an amount sufficient to compensate the City for its damages and/or expenses. For the avoidance of doubt, if the City provides a default notice pursuant to this paragraph, it is not required to provide any further notice under ATTY/AGR.2022.405/Mobilitie, LLC (Page 6 of 21)