Page 12 - hs8004

time of installation.

6.09 It is understood that the construction required herein is

subject to the availability of funds and the need to obtain assistance

from outside sources and therefore may, at the discretion of Society, be

constructed in phases, _each phase being separated from the other by a

period of time to be determined by Society. However, the nature of the

construction to be perfonned in each phase and the time interval between

phases shall be subject to approval by the Director. In no event shall the

phasing of the construction required herein extend the completion thereof

beyond the date provided in Section 16.10. Should the required construction

be phased as herein provided, diligent prosecution thereof shall require

commencement of each phase on or before the date selected for connnencement

thereof.

7. BONDS

7 .01 Society shall purchase performance and payment bonds for

these improvements contracted by Society and identified on Exhibit B from

corporations duly authorized to issue surety bonds by the State before

constructing said improvements upon said property. Each bond shall name

Society as principal, company as surety, and County as obligee, thereon.

The payment bond shall also insure to the benefit of all claimants, as

said term is presently defined by Section 3085 of the California Civil

Code, or may hereafter be amended, so as to give such persons a right of

action to recover thereon in any suit brought to foreclose the liens

provided for in Title 15 of Part 4 of Division 3 of s<1id Civil Code or in

a separate suit brought upon the bond. Each bond shall be in a sum equal

to One Hundred Percent (100%) of the costs for constructing the improve-

ments contracted for, located upon the said property, and approved by the

Director. The condition of the performance bond shall be such that if the

-8-