Agenda - Council Work Session - 02/15/2005

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44. $3,000,000 (the "Letter ~f Credit") to secure the Developer's obligati6ns under Sections 10.t, 11.1,' 1:1.2 and 12.3 herein. The Letter of Credit secures only the Master DeVeloPer's obligations under Sections 10.1, 11. 11.2 and 12.3 of the Master Agreement. To the extent that other letters of credit are required under anY other Sections of this Agreement bra Phase Development Agreement,'.the Developer (0'r a Secondary DeveloPer, in 'the case of a Secondary Development Agreement) must provide those additional Letters of Credit2 The Letter of Credit and any other letters of credit required under the terms of 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 Certificate signed by the City Administrator of the City of Ramsey stating the DeVeloper is in default in the perfomaance of one or more of the obligations the letter:of credit secures (as stated in the letter of credit); (iii) provide that'it will au..tomatically 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, l 1.2 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 125% of the City's estimate of-the total cost of completing the perfon~nance of obligations which the Letter of Credit secures. To request the City's consent to such a reduction' in the amount of the Letter of 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 fi,ally performed all of the obligations the Letter of Credit secures and the City has respected and accepted any work. Section 15.1 of the Master Agreement is hereby amended as foltows: (a) The introductory clause of the third sentence of Section 15,1, which reads "if the Developer fails to perfom~ 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, i3,1, 13.2 and 15.1(e)," is hereby revised to. read as follows: If the Developer fails to perform one or more of 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), 1'9