1988-04-22 LOC 23333
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STATE BANK of St. Michael
701 CENTRAL AVE. EAST
AND ALBERTVILLE FACILITY
ST. MICHAEL, MINNESOTA 55376
PHONE ,
ST. MICHAEL - 497-2131
ALBERTVILLE - 497-3525
IRREVOCABLE LETTER OF CREDIT
City of Albertville
P.O. Box 131
Albertville, MN 55301
Date: April 22, 1988
1?EpbcEcl.
Attn: City Administrator
Gentlemen:
.
At the request of John F. Darkenwald and George W. Yankoupe, and in accordance
with all applicable banking laws and regulations, we authorize the City of
Albertville to draw upon Security State Bank of St. Michael, a licensed and
qualified banking or savings and loan association in the State of Minnesota,
up to an aggregate amount of $200,000.00. It is understood that Security State
Bank of St. Michael has agreed to provide this Letter of Credit as a surety to
. guarantee that all of the terms and conditions of the Developers Agreement for
Westwind Addition (First Phase) dated April 22, 1988, which is attached hereto
and incorporated herein by reference as Exhibit "A", are performed by the
Developer pursuant to the terms thereof.
This Letter of Credit is intended to be an Irrevocable Letter of Credit signifying
to the City of Albertville that the banking or savings and loan association named
herein has pledged to the City the payment of up to the aggregate amount set forth
herein upon there being any default by the Developer of any of the conditions set
forth within the aforesaid referred Developers Agreement. Said aggregate amount
shall be available to the City of Albertville upon presentment of a draft or drafts
signed by the officially designated officials acting in behalf of the City of
Albertville and accompanied by the City's statement stating that John F. Darkenwald
and George W. Yankoupe have defaulted in the performance of anyone or more of its
obligations to the City of Albertville and it shall be accompanied by a copy of this
Letter of Credit. The draft shall bear on its face the clause "Drawn Under Letter
of Credit No. 23333, dated April 22, 1988" and be presented for payment during the
normal business hours of this institution at any time from the date hereof until
the undertakings within said Developers Agreement are fully completed or the date
of expiration of this Letter of Credit or subsequent Letters of Credit issued
pursuant to the terms herein.
.
Should the Developer fail to comply with all of the terms and conditions of said
Developers Agreement including making the payments required for Special Assessments
as set forth therein, the City may draw, if drawn prior to its expiration, the entire
aggregate amount of this Letter of Credit. It is our intention and agreement herein
that upon the expiration date of this Letter of Credit that until all of the terms
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April 22, 1988
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and conditions of said Developers Agreement are fully satisfied, a new and
continuing Letter of Credit and subsequent new Letters of Credit, as are necessary,
will be issued to the City of Albertville in a like amount and under the same terms
and conditions (with exception of the expiration date). Should we elect, however,
for any reason not to issue such a new Letter of Credit upon expiration of this or
a subsequently issued Letter of Credit, we will notify the City of Albertville of
that decision thirty (30) days prior to the expiration date thereof. Said notifica-
tions shall be sent by registered mail addressed to the City Clerk of the City of
Albertville, P.O. Box 131, Albertville, Minnesota 55301. Upon receipt of such
notice, the City of Albertville shall be entitled to draw at site, by presentment
of a draft or drafts prior to the date of expiration of the Letter of Credit, pur-
suant to the terms hereof, up to the full aggregate amount as set forth herein. A
failure to deliver a notice of intent not to issue a new Letter of Credit pursuant
to the terms hereof to the City of Albertville shall be deemed to automatically be
a reissuance or extension of this instrument in all its terms and conditions for a
period of one (1) year. In the event of a withdrawal of all or a portion of the
aggregate funds referred to herein, it is understood that the City of Albertville
shall use such funds solely for the purpose of meeting the Developer's obligation
pursuant to the aforesaid referred Developers Agreement. Any excess funds drawn
by the City to meet the Developer's obligations of the said Developers Agreement,
shall be returned to this institution after the total fulfillment of the Developer's
obligations as set forth in the said Developers Agreement, including the requirements
for payment of Special Assessments.
We further represent to you that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored on or before the expiration date
of the first day of June, 1989, or any subsequent expiration date of an automatically
renewed or subsequently issued Letter of Credit as referred to herein. We confirm
this instrument and any subsequently issued instruments as Irrevocable Letters of
Credit and thereby undertake that all drafts drawn or negotiated as above specified
will be duly honored by us. We further confirm to you that this instrument is issued
in accordance with the International Chamber of Commerce Brochure No. 400.
Your rights under this Letter of Credit are not assignable or otherwise transferable.
Dated: April 22, 1988
SECURITY STATE BANK O~"ST. MICHAEL
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By: Ardell C. Paulson
Loan Officer