The City has a number of projects in various states of planning, design, and construction as a part of the Integrated Water Utilities Master Plan (the “IWUMP”). As part of the IWUMP, the City has designed and planned the Reclaimed Water Main Project #2 that involves constructing a 24-inch reclaimed water main to convey reclaimed water from the Pleasant Valley Reservoir & Booster Pump Station along Lone Mountain Parkway and into the Vistancia development, which will be redesigned to follow an alternative alignment that routes the waterline along the new Revel Way alignment within the Vistancia development as illustrated in Exhibit A attached hereto (the “Revel Way Waterline”).

Vistancia has developed plans to construct Revel Way Phases 1, 2, and 3 between El Mirage Road and Lone Mountain Parkway, including plans for installation of wet utilities (the “Revel Way Improvements”) to support continued growth of the Vistancia community. The Revel Way Improvements do not include plans for reclaimed water utilities and for the purposes of cost efficiencies, the City would like to incorporate the installation of the Revel Way Waterline (the “Project”) concurrently with the overall Revel Way Improvements plans being designed and constructed by Vistancia.

The City is responsible for designing and for paying all the costs of the Project, but the City is not participating in the actual construction of the Project, nor will the City participate in the installation of equipment for the Project. All such activities are being coordinated solely by Vistancia. Therefore, Vistancia will perform construction management, coordination, and administrative services necessary for the successful completion of the Project and may receive compensation for such construction management services associated with the Project in an amount equal to five percent (5%) of total construction costs of the Project (the “Construction Management Fee”). Vistancia will be solely responsible for Revel Way Improvements and costs thereof.

The City’s responsibility to pay Vistancia the actual cost for the Project shall not exceed the guaranteed maximum price of two million and eight-hundred and forty-thousand dollars ($2,840,000), which includes a contingency in the amount of fifteen percent (15%) of the cost of the Project (the “Cap”). All funds will be deposited into an Escrow Account with First American Title Agency. Vistancia will submit monthly invoices and pay applications for the Project Costs and its Construction Management Fee, which will all be paid via a City-approved draw from the Escrow Account.

Upon completion of construction of the Project by Vistancia and after final acceptance thereof by the City, the City will own, operate and maintain the Revel Way Reclaimed Water Line.