1996-08-13 LOC Established
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August 13, 1996
IRREVOCABLE LETTER OF CREDIT
3, 5'/ CffP
City of Albertville
ATTN: Linda Houghton
Box 131
Albertville, MN 55301
RE: SUBDIVISION IMPROVEMENTS IN THE PARKSIDE 3RD ADDITION CITY
OF ALBERTVILLE AS REGULATED BY DEVELOPERS AGREEMENT
We hereby establish our Irrevocable Letter of Credit 0?~~9~,
effective immediately upon the recording of the Final Plat, in
favor of the City of Albertville (the "City") at the request and
for the account of Kenco Construction, Inc. (the "Developer") in
the amount of Eight Hundred Eleven Thousand One Hundred Twenty
Four and 00/100 Dollars ($811,124.00), as such amount is
decreased as provided below, available to you by your sight draft
or drafts drawn upon us in connection with the completion of
streets, storm and sanitary sewers, and water lines in the
Parkside 3rd Addition, City of Albertville (the "Improvements")
in the Development Agreement between the City of Albertville and
Kenco Construction, Inc.
Each draft drawn under this Letter of Credit must be accompanied
by:
a) The original of this Letter of Credit;
b) A notarized draft executed by the City Administrator,
stating the Developer is in default of the Development
Agreement, and that the City is entitled to draw upon the
Letter of Credit. Such statement shall set forth the
Improvements not completed, the respect in which the
Improvements have not been completed and the amount required
to cure such failure.
Each draft drawn under this Letter of Credit must:
1) Be signed on behalf of the City by the City Administrator or
his/her designee;
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August 13, 1996
Page 2
2)
Be in an amount required to cure the default by the
Developer to complete the Improvements, which amount shall
not exceed $811,124.00.
Bear on its face the clause: "Drawn under Letter of Credit
No ..915::.-:' 96 , dated August ~, 1996";
Be presented for pa~ent at this office no later than 1:00
P.M., on August /)l, 1997, at which time this Letter of
Credit shall expire.
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4)
This amount of the Letter of Credit shall be automatically
reduced in the amount of One Hundred Percent (100%) of the
estimated cost of the work completed as each portion of the
Improvements is completed until One Hundred Thirty Thousand and
00/100 Dollars ($130,000) remains. The City Council shall
approve in writing such reductions below One Hundred Thirty
Thousand and 00/100 Dollars ($130,000) until project completion.
Each drawing hereunder shall reduce by the amount of such
drawings the amount available under this Letter of Credit.
We hereby agree that drafts drawn under and presented in
conformity with the terms of the Letter of Credit will be duly
honored upon presentation.
Except as otherwise expressly stated, this Letter of Credit is
subject to the Uniform Customs and Practice for Documentary
Credits (1983 Revision) International Chamber of Commerce
Publication No. 400 (the "Uniform Customs"). This Letter of
Credit shall be governed by and construed in accordance with the
laws of the State of Minnesota, including the Uniform Commercial
Code as in effect in the State of Minnesota.
This Letter of Credit is not transferable or assignable and is
not issued for the benefit of any third party claimant.
We shall not be called upon to resolve issues of fact or law
between the Beneficiary and the Developer.
N~AST
~.G. akerman, Executive Vice President