(A) The following is a sample letter of credit of an approved form.
LETTER OF CREDIT
(name of bank)
,
(Bank's city) (Bank's state)
Irrevocable Credit No. Date:
City of Kewanee, Illinois All drafts must be marked:
Drawn under Credit No.
Dated
Gentlemen,
We hereby open an Irrevocable Letter of Credit in the amount of ($ amount) in your favor for the account of (Developer), the developer of (name of subdivision), a subdivision proposed for final plat in the City of Kewanee, Illinois or within its territorial jurisdiction, for the benefit of the City of Kewanee. Said money hereunder shall be available by your drafts at sight drawn on us drawn in the name of the City of Kewanee, Illinois. All drafts so drawn must be marked "Drawn under (name of bank) , Credit No. , dated ."
Drafts must be accompanied by a signed statement by the City Manager of the City of Kewanee, Illinois, that the request is for the installation or construction of improvements and related work required pursuant to the plans, specifications and cost estimates dated , and approved by the City of Kewanee, Illinois, and on file with the City Manager. Further, all requests for disbursements under this Letter of Credit made prior to (must be 2 years after filing), shall be submitted by the developer and accompanied by a certified estimate of units and value of work completed with contractor's sworn statement and waiver of mechanics' liens, all approved by the Developer's engineer and the City Manager of the City of Kewanee, Illinois. It is understood as to all disbursements that the City Manager shall approve partial drawings only as long as there remains a sufficient balance to the Credit to cover his then current estimate of costs for the required improvements which at that time remain to be completed but in no case shall his approval exceed ninety percent (90%) of the value of work completed.
In the event that all of the work for the improvements is not completed to the satisfaction of the City on or before (1 day short of 2 years after filing), the funds remaining under this Letter of Credit shall be available to the City of Kewanee, Illinois upon presentation of their draft at sight drawn on us in the name of the City of Kewanee, Illinois. This draft so drawn must be marked "Drawn under (name of bank) Credit No. dated . Further, such draft shall be accompanied by a signed statement by the City Manager of the City of Kewanee, Illinois as follows: "I, (name), City Manager for the City of Kewanee, Illinois, do hereby certify that work on required improvements in the subdivision named (subdivision name) has not been completed to the satisfaction of the City of Kewanee on or before (one day short of two years after filing).
This Credit shall expire on (2 years after filing) or one (1) year after acceptance of the required improvements, whichever date is the later; provided however, the undersigned shall notify the City Manager, by certified mail, return receipt requested, at least 90 days prior to expiration date that this Letter of Credit is about to expire and provided, however, in no event shall this Credit expire except upon prior written notice, it being expressly agreed by the undersigned that the above expiration date shall be extended as shall be required to comply with this notice provision.
The undersigned further agrees that this Credit shall remain in full force and effect and pertain to any and all amendments or modifications which may be made from time to time to the specifications, and agreements for the subdivision, without notice from the City of the amendments or modifications.
All acts, requirements and other preconditions for the issuance of this Irrevocable Letter of Credit have been completed.
We hereby engage with the drawers, endorsers and bona fide holders of drafts drawn under and in compliance with the terms of this Credit, that same shall be honored upon presentation to the drawer. This Credit must accompany any draft which exhausts the Credit and must be surrendered concurrently with the presentation of such draft.
We hereby undertake and engage that all demands made in conformity with this Credit will be honored upon presentation. If, within ten (10) days of the date any demand made in conformity with this Credit is presented, we fail to honor same we agree to pay all attorneys' fees, court costs, and other expenses incurred by the City of Kewanee in enforcing the terms of this Credit.
Dated:
Name of bank
By
Title
Attest:
Title
(`71 Code, § 12-7-1) (Ord. 1447, passed 10-28-63)
(B) Escrow agreement. The sample escrow agreement shown below is of an approved form.
ESCROW AGREEMENT
THIS AGREEMENT, made and entered into this day of , 20 , by and between Hereinafter called "DEVELOPER"; the City of Kewanee, Illinois, Hereinafter called "CITY"; and the , Hereinafter called "ESCROW HOLDER."
WITNESSETH:
WHEREAS, Developer has submitted a proposed plat of a subdivision within the City and said Developer is required by the Subdivision Regulations of the Code of Ordinances of Kewanee either to make certain improvements in said subdivision, or to guarantee that said improvements will be made within a period of two years from the date of the filing of the plat of said subdivision, and to guarantee the satisfactory condition of those improvements for a one (1) year period following acceptance by the City of said improvements.
WHEREAS, under the terms of the subdivision regulations of the City, Developer may deposit the estimated cost of the required improvements in escrow with the City as one method of insuring to said City that the required improvements will be completed and Developer has elected to do so;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and the mutual benefits to be derived therefrom, it is hereby agreed and understood by and between the parties hereto as follows:
1. Developer has this date deposited the sum of $ with the Escrow Holder, which sum is composed of the following sums for the noted improvements, to-wit:
the receipt of which is hereby acknowledged, said sum being the estimated cost of the required improvements for the development of the proposed subdivision to be known as
.
2. Whenever the Developer shall complete any required improvement and said improvement shall be approved and accepted by the City of Kewanee within a period of (two years less one day) from the recording of said subdivision plat, then in such event the Escrow Holder shall return to Developer upon the approval and acceptance of said improvement by the City of Kewanee, ninety percent (90%) of the money deposited herewith. The remaining ten percent (10%) shall be retained until the required one (1) year guarantee period on the improvements has expired. Upon the completion by Developer and approval by City of Kewanee of all required improvements, and the expiration of the guarantee period, all the money deposited shall be returned to Developer.
3. In the event Developer shall fail to complete any portion of the required improvements within the period of (two years less one day) days from the recording of said subdivision plat, then Escrow Holder is hereby expressly authorized to disburse such portion of the money deposited herewith as shall be required to complete the required improvements for said subdivision plat. In the event Developer shall notify City of his inability to complete said improvements within said (two years less one day) period then in such event Escrow Holder may also expend such sums as necessary to complete said improvements. Upon the completion of all said required improvements, the Escrow Holder shall return to Developer ninety percent (90%) of the unexpended balance of the sum deposited herewith, less any other charges which may be outstanding against Developer in connection with said subdivision.
4. In the event the Escrow Holder shall use the sum deposited herewith for the construction or completion of the construction of any or all of the required improvements the construction of said improvements, may be done by the City of Kewanee under the direction of its City Engineer and at its actual cost including a reasonable charge for engineering supervision; or may be done by contract between the City of Kewanee and some responsible contractor or contractors, after sufficient opportunity has been given for competitive bidding, in accordance with the normal practices of the City, and in such event the cost of construction shall be based upon the actual contract amount or amounts plus a reasonable charge for engineering and inspection by the City of Kewanee.
5. The deposit of said sum with the Escrow Holder is in an interest bearing account, the interest from which shall be the property of the City. But if no claim is made for non-performance hereunder within two (2) years from the date hereof for the construction of said improvements, the escrow account shall be released to the Developer and the interest from which shall revert to the Developer upon the failure of said condition; neither the City nor Developer shall have the right to withdraw interest from said account during the term thereof.
6. The City may allow substitution of Escrow Holder and Developer, and it may allow this instrument to be substituted by a bond with adequate surety which guarantees payment under the terms hereof. Said substitution shall be by filing with the City an assignment, replacement instrument, or bond and upon said filing, and approval by Kewanee City Council, the City Attorney shall execute the necessary release.
7. By execution of these presents and for valuable consideration paid to it by Developer, the Escrow Holder consents and agrees to meet the obligations imposed upon it hereby.
8. The parties hereto agree that should any litigation arise out of this Escrow Agreement, the venue for such litigation shall be in the Circuit Court of the Fourteenth Judicial Circuit, Henry County, Illinois and the parties hereto expressly waive all rights to venue inconsistent herewith.
9. This Agreement shall be binding upon the heirs, assigns, administrators, executors and successors of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed on the date first above mentioned.
"DEVELOPER"
City of Kewanee, Illinois
By:
City Manager
ATTEST:
City Clerk
Approved as to Form:
City Attorney
"CITY"
Attest:
"ESCROW HOLDER"
(Ord. 3265, passed 8-14-00)