Common use of Letter of Credit or Cash Bond Clause in Contracts

Letter of Credit or Cash Bond. Developer shall provide ACHD with an irrevocable and unconditional letter of credit in favor of ACHD in an amount equal to one hundred and ten percent (110%) of the total of the contract price of the Project Costs minus the Reimbursable Project Costs for the purpose of assuring ACHD that Developer will perform its obligations hereunder. The letter of credit shall be issued by either a national bank with a branch in Ada County, Idaho or another financial institution acceptable to ACHD and include a provision that ACHD may present documents for any draws on the letter of credit at the local branch. The letter of credit shall be delivered to ACHD prior to Developer’s execution of the construction contract. In lieu of a letter of credit, the Developer may provide a cash bond (cash deposit to ACHD) in the same amount, or pledge other security acceptable to ACHD of equal value. When all Developer’s contractors for the Project have been paid and ACHD has issued its certificate of completion of the Project, such assurance shall be released to Developer. In its sole discretion, ACHD may allow the reduction of the assurance as payments of Costs of the Project are made during the course of construction.

Letter of Credit or Cash Bond. Developer shall provide ACHD with an irrevocable and unconditional letter of credit in favor of ACHD in an amount equal to one hundred and ten percent (110%) of the total of the contract price of the Project Costs minus the Reimbursable Project Costs for the purpose of assuring ACHD that Developer will perform its obligations hereunder. The letter of credit shall be issued by either a national bank with a branch in Ada County, Idaho or another financial institution acceptable to ACHD and include a provision that ACHD may present documents for any draws on the letter of credit at the local branch. The letter of credit shall be delivered to ACHD prior to Developer’s execution of the construction contract. In lieu of a letter of credit, the Developer may provide a cash bond (cash deposit to ACHD) in the same amount, or pledge other security acceptable to ACHD of equal value. When all Developer’s contractors for the Project have been paid and ACHD has issued its certificate of completion of the Project, such assurance shall be released to Developer. In its sole discretion, ACHD may allow the reduction of the assurance as payments of Costs of the Project are made during the course of construction.