Agenda - Council Work Session - 02/01/2005

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44. $3,000,000 (the "Letter of Credit,J) to secure the Developer's obligations under Sections 10.t, 11.1, 11.2 and 12.3 herein. The Letter of Credit secures only th.e Master DCvel0per's obligations under Sections 10.1, 11.1, 11.2 and 12.3 of the Mas~er Agreement. To the extent that other letters of credit are required under any other Sections of this Agreement or a Phase Development Agreement, theDeveloper (o'r a Secondary DeveloPer, in the case of a Secondary Development Agreement) must provide those additional Letters of Credit; The Letter of Credit and any other letters of credit required under the terms °f this Master Agreement must: (i) be an Irrevocable Letter of Credit from a state or national banking association or other financial institution reaSonably acceptable to the City; (ii) obligate the issuer thereof to honor the City's site draft for the full amount of the letter of credit provided the City submits to the' issuer, along with the City's site draft, a Certific~ite signed by the City Administrator of the City of Ramsey stating the Developer is in default in the performance of one or more of the obligations the letter 0f credit secures (as stated in the letter of credit); (iii) provide that it_will automatically renew until released by the City' and (iv) be, in all other respects, in a form reasonably acceptable to the City. At such time as the City reasonably determines that the total value of all of Developer's:obligations under Sections 10.1, 11-. 1, 11.2 and 12.3 is less than $2,400;000,-the amount of the Letter of Credit may be reduced, not more often than once per month, to an amount equal to 12.5% of the City's estimate of the total cost of completing the performance of obligations which the Letter of Credit secures. To request the City's consent to such a reduction in the amount of the Letter o~' Credit, the Developer must submit to the City a description of the work the Developer has completed and mechanic's and materialmen's lien waivers showing the Developer's full payment for the completed work. The City's Engineer will inspect the Work identified in the Developer's request and report the results of his or her inspection to the City Administrator. The city Administrator will approve the reduCtion and the outstanding amount of the Letter of Credit when the City Administrator is satisfied; based on 'the Engineer's report, that the amount of the reques.ted reduction accurately reflects the cost of the work the Developer has completed and paid for, The City will release the Letter of Credit when'the Developer has fully performed all of the obligations the Letter of Credit secures and the City has inspected and accepted any work. Section 15.1 of the Master Agreement is hereby amended as folloWs: (a) The introductory clause of the 'third sentence of Section 15.1, which reads "if the Developer fails to perfonu one or'more of its obligations in Sections 4.12, 7.6, 7.7, 7.12, 7.13, 9.6, 9.7, 12.3, 12.4, 13.1, I3.2 and 15.1(e)," is hereby reVised to read as follows: If the Developer fails to perform one or more o'f its obligations under Sections 4.12, 7.6, 7.12, 7.16, 9.2, 1213, 12.4, 13.1,' 13.2 or 15.1(e), 1 71 (1652v2 19 -25'