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IV. General Requirements 1. Supplier must use a competitive bid process for the construction of the project. The bid summary must be submitted to the State's Santa Ana District Office for review and approval prior to the awarding of the prime construction contract. 2. If any materials submitted to satisfy the conditions of the LOC are deemed inadequate, Supplier must submit additional information as specified, and within the timeframe designated by the State. 3. Supplier must initiate construction of the project within one (1) year of the Date of Execution of the funding agreement. 4. Supplier must complete construction of the project within three (3) years of the Date of Execution of the funding agreement. 5. Supplier may request a one-time increase in funding following the Date of Execution of the funding agreement. The request must be based upon costs received from competitive bids and shall be submitted to the State for review and approval. Approval of the Supplier's request may be granted or denied at the sole discretion of the State and is subject to the availability of funds. 6. All disbursements for construction costs may be subject to a ten percent (10%) retention on each claim until completion of the project as specified in the funding agreement. 7. Supplier may be reimbursed only for such project costs consisting of eligible construction expenses incurred on or after the date of this LOC, and eligible preliminary expenses incurred after November 7, 2006. 8. No funds will be disbursed until the funding agreement has been executed. 9. Supplier shall comply with Public Resources Code Section 75075 regarding Labor Compliance Programs. 10. Supplier acknowledges the importance to public health and safety of assuring that, upon completion of the Project, no person or entity be able to obtain its domestic water supply from the well located on APN 408-245-43 commonly described as 1532 S Diamond Street, Santa Ana, CA 92704 (Well) and currently serving the Diamond Park Mutual Water Company service area; and Supplier expressly agrees to destroy or cause to be destroyed the Well not later than 3 years following the Date of Execution of the funding agreement in order for the well destruction costs to be deemed eligible for reimbursement. Supplier shall submit a copy of the Well destruction permit to the State's Santa Ana District Office. City of Santa Ana P84C-3000663-003C Page 3 of 5 55A-12