Common use of CAW Letter of Credit Clause in Contracts

CAW Letter of Credit. On or before the Effective Date, CAW shall obtain a letter of credit in form, on terms and from an issuer reasonably acceptable to MCWD and MCWRA in the amount of $12,000,000.00 (the “Letter of Credit”) which may be drawn upon by MCWD and MCWRA to reimburse such Party for Cover Damages it incurs as a result of a CAW Event of Default hereunder. The Letter of Credit shall have a term to and be effective until the first anniversary of the Acceptance Date. If the Letter of Credit is an annual letter of credit, it shall either automatically renew annually by its terms or shall be renewed annually by CAW prior to its expiration date. From and after the one year anniversary of the Acceptance Date, CAW shall cancel the Letter of Credit and MCWD's and MCWRA's right to draw upon the Letter of Credit shall cease. CAW's costs of obtaining the Letter of Credit shall be a CAW Regional Desalination Project Related Expense.

CAW Letter of Credit. On or before the Effective Date, CAW shall obtain a letter of credit in form, on terms and from an issuer reasonably acceptable to MCWD and MCWRA in the amount of $12,000,000.00 (the “Letter of Credit”) which may be drawn upon by MCWD XXXX and MCWRA to reimburse such Party for Cover Damages it incurs as a result of a CAW Event of Default hereunder. The Letter of Credit shall have a term to and be effective until the first anniversary of the Acceptance Date. If the Letter of Credit is an annual letter of credit, it shall either automatically renew annually by its terms or shall be renewed annually by CAW prior to its expiration date. From and after the one year anniversary of the Acceptance Date, CAW shall cancel the Letter of Credit and MCWD's and MCWRA's right to draw upon the Letter of Credit shall cease. CAW's costs of obtaining the Letter of Credit shall be a CAW Regional Desalination Project Related Expense.