Common use of Commercial Letter of Credit Clause in Contracts

Commercial Letter of Credit. In Lieu of cash escrow, the Seller herewith furnishes the Escrow Agent, and said Agent acknowledges the receipt thereof, an irrevocable Letter of Credit (No. ) drawn upon the , a commercial banking institution, for the account of identified as Seller herein, which said Letter of Credit is payable to said Agent in the amount of $ and the terms of which are by reference thereto hereby incorporated herein and made a part hereof and which letter shall be drawn on by the Agent in accordance with its terms, and which said Letter of Credit shall hereinafter be referred to as the "Fund". The Escrow Agent further acknowledges that the Escrow Agent has examined the said Letter of Credit and as a result of such examination has determined that the said Letter of Credit is a valid and binding obligation of the said issuing bank in accordance with the terms of said Letter of Credit; and Escrow Agent further acknowledges the receipt of opinions of the General Counsel of the issuing bank and the General Counsel of Escrow Agent, which are attached hereto and made a part hereof, which opinions state that the Letter of Credit has been examined, that the issuance of said Letter of Credit is within the authority of the issuing bank, and that the Letter of Credit is a valid and binding obligation of the issuing bank. (1) Escrow Agent agrees that upon completion by Seller of a part or all of the construction in accordance with the plans and specifications referred to above and upon Seller presenting to "Escrow Agent" satisfactory evidence to assure that no mechanics' liens are outstanding or can attach on account of such work and improvements, Escrow Agent shall, upon receipt of written approval of such completed work from the Loan Guaranty Officer, return said "Fund" of $ to Seller. or part thereof without interest (2) In the event Seller fails to complete or cause to be completed the improvements specified herein, and fails to deliver to Escrow Agent the written approval of said work by the Department of Veterans Affairs, Escrow Agent shall, upon receiving written approval from the Loan Guaranty Officer, proceed to complete the said work and pay the cost thereof, including all costs and charges of Escrow Agent, from monies derived from the "Fund" deposited with it pursuant to paragraph 4B of this agreement and for this purpose Seller hereby irrevocably authorizes and empowers Escrow Agent to do and perform for it, the Seller, and in its name, place and stead, all matters and things which Escrow Agent shall in its judgment deem necessary and proper to be done to effectuate the completion of the said work and to apply monies derived from said "Fund" to the payment of debts contracted or incurred for work done or for materials furnished therefor, or either, in and about said work and for all expenses, costs and charges in connection therewith, and for Escrow Agent so doing, this warrant of attorney shall be its full and sufficient authority and the orders so given and signed by Xxxxxx Agent as attorney-in-fact shall be good and sufficient vouchers for all payments made by virtue thereof. Further, in such event Seller hereby irrevocably authorizes and empowers Escrow Agent to enter into and upon the said premises and take charge thereof, together with all materials and appliances thereunto belonging, and thereupon in the name of the Seller, as its attorney-in-fact, to call upon and require the several contractors to proceed to complete the said work and to do whatsoever, in Escrow Agent's judgment, it shall deem necessary be done to secure the completion of the said work in accordance with the plans and specifications referred to above subject to the prior approval of the Department of Veterans Affairs. (3) Escrow Agent agrees that in the event the work is completed by Xxxxxx Agent in accordance with the provisions hereof and written approval of said work is given by the Department of Veterans Affairs, any unexpended balance of the sum of money deposited with the Escrow Agent, pursuant to paragraph 4B of this agreement, shall thereupon be returned by Escrow Agent to Seller without interest. (4) Seller agrees that in the event the sum herewith deposited proves insufficient for any reason to effectuate completion of said work and improvements by Xxxxxx Agent, the Escrow Agent may make demands upon Seller to deposit any additional sum needed to effect its completion and Seller hereby agrees to supply Escrow Agent any and all sums needed over and above the amount of this deposit to complete said work and improvements. (5) Seller agrees that it is personally liable to purchasers of such dwellings for the satisfactory completion of the improvements free and clear of all liens and that this undertaking is additional to and not in lieu of the Seller's express covenant with the agent.

Commercial Letter of Credit. In Lieu To secure completion of cash escrowthese improvements on or before the specified completion date, the Seller herewith furnishes the Escrow Agentundersigned has accepted from 2107:PR_BldrName , and said Agent acknowledges the receipt thereofbuilder, an irrevocable Letter letter of Credit (No. ) credit drawn upon the -32998:DB1307, a commercial banking institutionbank, for the account of identified as Seller hereindated -32997:DB1306, which said Letter of Credit is payable to said Agent in the amount of $ -33022:DB1308, which letter will make available to the undersigned $ -33023:DB1304, for the completion of these improvements, and the terms undersigned agrees to not release the right to draw upon said letter of which are by reference thereto hereby incorporated herein and made a part hereof and which letter shall be drawn on by the Agent in accordance with its termscredit, and which said Letter of Credit shall hereinafter be referred to as the "Fund"," until a representative of the undersigned has made a personal inspection of the work and found that all items have been satisfactorily completed and there is evidence satisfactory to the undersigned that there are no liens or possibilities of liens in connection with said improvements on the premises covered by the above. The Escrow Agent undersigned further acknowledges engages and confirms, if a letter of credit constitutes the "Fund," that the Escrow Agent has examined the issuing bank will honor said Letter letter of Credit and as a result of such examination has determined credit or that the undersigned will, itself, honor said Letter letter of Credit credit. The undersigned agrees to notify the Field Office when final disbursement is made, and further agrees that, in the event of offering the credit and security instruments to the above-numbered case for sale or transfer prior to such final disbursement or release of the letter of credit, it will notify the prospective purchaser thereof in full detail. It is understood that HUD will not release the original mortgagee from its responsibility unless the transferee assumes the responsibilities of the transferor either by execution of a valid new form, or by making a proper endorsement on the existing form to the effect that it accepts the new agreement and binding assumes the responsibility of the transferor. The undersigned further agrees that as further consideration for issuance of a Mortgage Insurance Certificate in this case, this instrument shall constitute a primary obligation of the said issuing bank undersigned to complete these improvements in accordance a manner satisfactory to comply with the terms of said Letter of Credit; and Escrow Agent further acknowledges the receipt of opinions requirements of the General Counsel Compliance Inspection Report or HUD Commitment For Insurance identified above regardless of the issuing bank and the General Counsel adequacy for such completion of Escrow Agent, which are attached hereto and made a part hereof, which opinions state that the Letter of Credit has been examined, that the issuance of said Letter of Credit is within the authority of the issuing bank, and that the Letter of Credit is a valid and binding obligation of the issuing bank. (1) Escrow Agent agrees that upon completion by Seller of a part or all of the construction in accordance with the plans and specifications referred to above and upon Seller presenting to "Escrow Agent" satisfactory evidence to assure that no mechanics' liens are outstanding or can attach on account of such work and improvements, Escrow Agent shall, upon receipt of written approval of such completed work from the Loan Guaranty Officer, return said "Fund" of $ to Seller. or part thereof without interest (2) In the event Seller fails to complete or cause to be completed the improvements specified herein, and fails to deliver to Escrow Agent the written approval of said work by the Department of Veterans Affairs, Escrow Agent shall, upon receiving written approval from the Loan Guaranty Officer, proceed to complete the said work and pay the cost thereof, including all costs and charges of Escrow Agent, from monies derived from the "Fund." deposited with it pursuant Date: Signature & Title of Mortgagee' s Official: For Direct Endorsement Underwriters Only: Mark the Box & Enter Your ID No. X Part 1 - Original to paragraph 4B HUD Case Binder Mortgagee - After completing the form, ref. Handbook 4145. 1 Mortgagee' s Name, Address, & Zip Code: FHA Case No.: Mortgagor: Property Location: (Mark the HUD Commitment appropriate box) Form HUD-92051 Date: Completion Date: Amount of this Escrow Fund: $ -30320:DB10618 Such assurance of completion represents an agreement solely between HUD and for this purpose Seller hereby irrevocably authorizes and empowers Escrow Agent to do and perform for it, the SellerMortgagee, and in its namedoes not relieve the Mortgagee of responsibility for assuring itself, place and steadby supplemental agreement or otherwise, all matters and things which Escrow Agent shall in its judgment deem necessary and proper to be done to effectuate the completion of the said work and to apply monies derived from said "Fund" to the payment of debts contracted or incurred for work done or for materials furnished therefor, or either, in and about said work and for all expenses, costs and charges in connection therewith, and for Escrow Agent so doing, this warrant of attorney shall be its full and sufficient authority and the orders so given and signed by Xxxxxx Agent as attorney-in-fact shall be good and sufficient vouchers for all payments made by virtue thereof. Further, in such event Seller hereby irrevocably authorizes and empowers Escrow Agent to enter into and upon the said premises and take charge thereof, together with all materials and appliances thereunto belonging, and thereupon in the name of the Seller, as its attorney-in-fact, to call upon and require the several contractors to proceed to complete the said work and to do whatsoever, in Escrow Agent's judgment, it shall deem necessary be done to secure the completion of the said work in accordance with the plans and specifications referred to above subject to the prior approval of the Department of Veterans Affairs. (3) Escrow Agent agrees that in the event the work is completed by Xxxxxx Agent in accordance with the provisions hereof and written approval of said work is given if not performed by the Department Mortgagor. The Mortgagee is held responsible even if the stipulated escrow amount proves to be insufficient. Date: Signature & Title of Veterans AffairsMortgagee' s Official: For Direct Endorsement Underwriters Only: Mark the Box & Enter Your ID No. X Part 2 - HUD Tickler File Copy Return to the Mortgagee if Part 4 is not received on time. ref. Handbook 4145. 1 Mortgagee' s Name, any unexpended balance Address, & Zip Code: FHA Case No.: Mortgagor: Property Location: (Mark the HUD Commitment appropriate box) Form HUD-92051 Date: Completion Date: Amount of Escrow Fund: $ -30320:DB10618 A. Cash Escrow: To secure completion of these improvements on or before the specified completion date, the undersigned agrees to hold the sum of money deposited with the Escrow Agent, pursuant to paragraph 4B of this agreement, shall thereupon be returned by Escrow Agent to Seller without interest. (4) Seller agrees that in the event the sum herewith deposited proves insufficient for any reason to effectuate completion of said work and improvements by Xxxxxx Agent, the Escrow Agent may make demands upon Seller to deposit any additional sum needed to effect its completion and Seller hereby agrees to supply Escrow Agent any and all sums needed over and above the amount of this deposit to complete said work and improvements. (5) Seller agrees that it is personally liable to purchasers of such dwellings for the satisfactory completion of the improvements free and clear of all liens and that this undertaking is additional to and not in lieu of the Seller's express covenant with the agent.of