Common use of Security for Improvements Clause in Contracts

Security for Improvements. The Developer’s obligation to construct Improvements depicted within the Approved Plans shall be secured by a Performance and Warranty Guarantee. A. The Developer shall obtain a Performance Guarantee which shall be furnished to the City prior to the issuance of any construction permit. The type of Performance Guarantee chosen by the Developer shall be in accordance with all applicable provisions of the Standards and Specifications, the Code, and as required by Section 3.00 herein, except as provided in Section 5.06 of this Agreement. In addition, any Improvements within existing improved rights-of-way require a security deposit in the form of a letter of credit in the amount of one hundred percent (100%) of the estimated cost for such improvements as identified in the Cost Estimate and in accordance with Section 2- 272(f)(3)(a) of the Code. B. The entity issuing the Performance and Warranty Guarantee shall have at least an "A" rating from Xxxxx'x, or an equivalent rating as designated by a nationally recognized ratings firm, and be included in the most recent listing of companies holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies, Department of Treasury, Circular 570. C. If, at any time prior to the City’s acceptance of the Public Improvements, the Performance Guarantee expires or the entity issuing the Performance Guarantee fails to meet the requirements of this Section 4.04, or the estimated construction costs of the Improvements are reasonably determined by the City to be greater than the amount of the Performance Guarantee provided, then the City shall furnish the Developer with written notice of such condition, and within twenty (20) calendar days of the date of such notice the Developer shall provide the City with a substitute Performance Guarantee, or increase the Performance Guarantee to achieve one hundred percent (100%) of the estimated construction cost of Improvements other than Landscaping Improvements, which shall be secured at one hundred fifty percent (150%) of the estimated costs as set forth in Section 5.06. If such Performance Guarantee is not furnished, as set forth herein, the City reserves the right to issue a stop work order as defined in the Standards and Specifications, and may declare the Developer in default of this Agreement in accordance with Section 15.00. D. The Developer providing the Performance Guarantee shall have no direct or indirect ownership interest in or managerial control over an entity issuing any type of Performance Guarantee. E. Upon the receipt and approval of the Performance Guarantee by the City, the Developer and the Developer's successor shall be eligible to apply for building permits pursuant to the City's applicable procedures and regulations then in effect. Receipt of the Performance Guarantee does not release the Developer of the conditions outlined in Section