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EXHIBIT 2 <br />release, or (c) take such other action as City may require to release City from any obligation or <br />liability with respect to such stop notice or claim. <br />8.6 Prevailing Wages. <br />(a) Developer shall assume any and all responsibility and be solely responsible <br />for determining whether or not laborers employed relative to the construction or installation of the <br />project must be paid the prevailing per diem wage rate for their labor classification, as determined <br />by the State, pursuant to labor code sections 1720, et seq. <br />(b) Developer, on behalf of itself, its successors, and assigns, waives and <br />releases the City from any right of action that may be available to any of them pursuant to Labor <br />Code section 1781. Developer acknowledges the protections of Civil Code section 1542 relative <br />to the waiver and release contained in this section 8.6, which reads as follows: <br />A general release does not extend to claims that the creditor or releasing party does <br />not know or suspect to exist in his or her favor at the time of executing the release <br />and that, if known by him or her, would have materially affected his or her <br />settlement with the debtor or released party. <br />(c) By signing this Agreement, Developer knowingly and voluntarily waives <br />the provisions of section 1542 solely in connection with the waivers and releases of this section <br />8.6. <br />(d) Additionally, Developer shall indemnify, defend and hold harmless the city <br />against any claims pursuant to Labor Code section 1781 arising from this agreement or the <br />construction or installation of all or any portion of the project. <br />(e) Developer represents and warrants that the Project is within the exemption <br />of California Labor Code § 1720(c)(5)(A) ("the habitat provision") that exempts projects from <br />being considered a "public works" project if "the project is a self-help housing project in which <br />no fewer than 500 hours of construction work associated with the homes are to be performed by <br />the homebuyers." <br />8.7 Developer's Assurance of Construction Completion. Prior to the Initial <br />Disbursement and commencement of construction of the Improvements, Developer shall furnish to <br />City evidence that assures Developer that sufficient monies will be available to complete the <br />proposed construction (the "Construction Security"). The City Project Manager shall approve or <br />disapprove the Construction Security, which approval shall not be unreasonably withheld. The <br />amount of money available from the Construction Security shall be at least the total estimated <br />construction cost. Subject to approval from the City Project Manager, the Construction Security <br />may take one of the following forms: <br />(i) Performance bond and labor and materials bond in a principal sum <br />equal to the total estimated construction cost supplied by Contractor or subcontractors, provided <br />said bonds are issued jointly to Developer, City and any Senior Lenders as obligees. <br />14 <br />5 53 94.0010 1 \42414134.1 <br />