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Attachment A
Date
City of Pasadena
Department of Public Works
100 North Garfield Avenue
Pasadena, CA 91109-7215
Re: Irrevocable Letter of Credit Number XXXXX
("Street address of Subject Project")
("Parcel Map/Tract Mao/Conditional Use Permit"} No.
For the Account of:
Expiration Date:
We hereby establish our Irrevocable Letter of Credit Number _ in your favor for the account of_ ("Applicant") and undertake to honor your
drafts at sight on us not exceeding an aggregate amount of _ and _/100 Dollars (S_J when accompanied by:
1) The original Letter of Credit.
2) Beneficiary's written certification, purportedly signed by an authorized signer, stating that _ are in default of certain Conditions of Approval of the Tentative Map approved by the City of Pasadena.
Partial drawings are permitted.
This credit expires on _ and drafts drawn hereunder, if accompanied by the documents as specified above, will be honored if presented to _ Bank, {Mailing Address of Bank) on or before that date or any automatically extended date thereafter. This Letter of Credit shall be automatically extended for an additional period of one year from the present or each future expiration date unless we notify the City Manager and the City Attorney in writing, sent by certified mail to the above address not less than thirty (30) days before such expiration date, that we elect not to renew this Letter of Credit.
Each draft hereunder must be endorsed on the reverse of this Letter of Credit and must bear upon its face "Drawn under Letter of Credit number _ dated _ on Bank
I
(Mailing Address of Bank)
?3
Except so far as
otherwise expressly stated herein, this Letter of Credit is subject to the "Uniform Customs Practice for Documentary Credits (1993 Revision), International Chainber of Commerce Publication Number 500."
Sincerely
Bank Signatory
Title
CHECKLIST FOR ACCEPTING LETTER OF CREDIT
1. The bank issuing the Letter of Credit must be creditworthy and must not have any financial interest in the subject matter of the Letter of Credit. This means a rating of C or better. The City Treasurer's office maintains a directory in which baiiks are rated in several categories. Contact Vicken Erganian to obtain a bank's credit rating.
2. The LOG must be good for the duration of the agreement to which the LOG relates.
3. The expiration date of the LOC must be clearly stated and the LOG must contain a provision that requires the issuing bank to give the City Manager and City Attorney 30 days written notice of impending expiration, by certified mail.
4. The LOG must be labeled "IRREVOCABLE." If it is not, it may be construed by a court to be revocable, which means that the bank can revoke it at any time without notice to the City.
5. The draw provisions of the LOC must be such that it will require a statement of certification from the City that the amount drawn is due and payable.
6. Under no circumstances should we accept a LOG that purports to give the permittee or contractor the ability to veto a draw on the LOG. Therefore, a LOG that contains a joint signing provision should not be accepted since such a provision gives the permittee or contractor a veto power.
7. If a bank has a form for the draft or certificate to be presented in connection with a draw, it should be attached as an exhibit to the LOG and it should be specified in the LOG that this is the form to be used when making a draw. This will ensure that the draw is made on the correct fonn and the bank cannot dishonor the draw on the grounds that it was not in the proper format.
8. All proposed LOG should be approved by the City Attorney's office before they are accepted, and all documents prepared in connection with a drawing should be likewise approved before presentation to the bank. DO NOT AGREE TO NEGOTIATE ANY PROVISION THAT IS IN BOLD TYPE. THESE ARE NON-NEGOTIABLE.
9. The attached sample LOG should be used whenever agreement from the issuing bank can be obtained.
10. Bracketed provisions will change depending on circumstances. ;'