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HomeMy WebLinkAboutA042 - Letter to Mayor and Council from Keith Arneson dated February 28, 2012, regarding intersection improvements at Dotson and Lincoln Way �r � ls� Q ACT � ` 1 o Q � O x y 0 GG O � r. a U � �n 'c ° v1 U r FIRST fit✓ ' 5©urit FoRK, Isr AA�r�o� BANK CAN IRREVOCABLE 1207 Central Avenue-Box 798-Fort Dodge,IA W501 CITY OF AMES LETTER OF 515-573-2154-Fax 515-573-8582 "UNDER" CREDIT 515 CLARK AVENUE NO.: 10081978 AMES, IA 50010 7 QliePr{c�Ng,FI©; Ib ...11 [)CIN-N UST "< I tpllu .0N#3AT� . TERRA FIRMA, L.P. This Letter of Credit shall expire upon the earlier of: 1. the close of business on JULY 27, 2003 and all drafts and accompanying statements or documents must be presented to Lender on or before that time;or AplDktSS 200 STANTON AVE 2. the day that Lender honors a draw under which the full AMES, IA 50014 - amount of this Letter of Credit is drawn. FEtE�!H .n[c� #D�r�itPtCTexN6. ...... Lender indicated above ('Lender) hereby establishes at the request and for the account of Customer an Irrevocable Letter of Credit in favor of Beneficiary for a sum or sums not exceeding the aggregate amount of THIRTY-ONE THOUSAND FIVE HUNDRED AND N01100 Dollars ($ 31,500.00 ). These funds shall be made available to Beneficiary against Lender's receipt from Beneficiary of drafts drawn at sight on Lender at its address indicated above (or such other address that Lender may provide Beneficiary with written notice of in the future) during regular business hours and accompanied by the signed written statements or documents indicated below. WARNING TO BENEFICIARY: PLEASE EXAMINE THIS LETTER OF CREDIT AT ONCE. IF YOU FEEL UNABLE TO MEET ANY OF ITS REQUIREMENTS, EITHER SINGLY OR TOGETHER, YOU SHOULD CONTACT YOUR CUSTOMER IMMEDIATELY TO SEE IF THE LETTER OF CREDIT CAN BE AMENDED. OTHERWISE, YOU WILL RISK LOSING PAYMENT UNDER THIS LETTER OF CREDIT FOR FAILURE TO COMPLY STRICTLY WITH ITS TERMS AS WRITTEN. 1. DRAFT TERMS AND CONDITIONS Lender shall honor the drafts submitted by Beneficiary under the following terms and conditions: EACH DRAFT MUST STATE THAT IT IS "DRAWN UNDER FIRST A14ERICAN BANK OF AMES LETTER OF CREDIT NO. 10081978 DATED JANUARY 27, 2003 FOR THE ACCOUNT OF TERRA FIRMA, L.P." THE BANK AGREES WITH THE DRAWER, ENDORSERS, AND BONA FIDE HOLDERS OF ALL DRAFTS UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE LETTER OF CREDIT THAT SUCH DRAFTS WILL BE HONORED UPON PRESENTATION TO THE DRAWER. THE ORIGINAL LETTER OF CREDIT AS FIRST REQUIRED DOCUMENT WILL BE REPLACED BY YOUR SIGNED STATEMENT WHICH WILL RED, "THE ORIGINAL LETTER OF CREDIT HAS NOT BEEN ENDORSED BY ANY PARTY FOR PAYMENT OF ANY PRIOR DRAFT." THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORMS, CUSTOMS & PRACTICE FOR DOCUMENTARY CREDIT (1983 REV.) INT. Upon Lender's honor of such drafts and payment to the Beneficiary, Lender, once the full amount of credit available under this Letter of Credit has been drawn,shall be fully discharged of its obligations under this Letter of Credit and shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such demand for payments to Beneficiary or any other person. If a non-conforming demand is made,Lender shall notify Beneficiary of its dishonor on or before the time mentioned in Section 5 below. Beneficiary shall have no recourse against Lender for any amount paid under this Letter of Credit after Lender honors any draft or other document which complies strictly with this Letter of Credit, and which on its face appears otherwise in order but which is signed, issued, or presented by any party or under the name of any party purporting to act for Beneficiary, purporting to claim through Beneficiary,or posing as Beneficiary. By paying to Beneficiary an amount demanded in accordance with this Letter of Credit, Lender makes no representation as to the correctness of the amount demanded and Lender shall not be liable to Beneficiary or any other person for or in respect to any amount so paid or disbursed for any reason whatsoever, including, without limitation, any nonapplication or misapplication by Beneficiary of the proceeds of such payment. By presenting upon Lender or a confirming bank, Beneficiary certifies that Beneficiary has not and will not present upon the other, unless and until Beneficiary meets with dishonor. Beneficiary promises to return to Lender or a confirming bank any funds received by Beneficiary in excess of the Letter of Credit's maximum drawing amount. 2. USE RESTRICTIONS All drafts must be marked"DRAWN UNDER FIRST AMERICAN BANK IRREVOCABLE LETTER OF CREDIT NO. 10081978 DATED JANUARY 27, 2003 °, and the amount of each draft shall be marked on the draft. Only Beneficiary or Beneficiary's Transferee(only if transferable) may complete a draft and accompanying statements or documents required by this Letter of Credit and make a draw under this Letter of Credit. This original Letter of Credit must accompany any draft drawn hereunder. Partial draws Fil are permitted ❑ are not permitted under this Letter of Credit. Lender's honor of a partial draw shall correspondingly reduce the amount of credit available under this Letter of Credit. Following a partial draw, Lender shall return this original Letter of Credit to Beneficiary with the partial draw noted thereon; in the alternative, and in its sole discretion, Lender may issue a substitute Letter of Credit to Beneficiary in the amount shown above less any partial draw(s). 3. PERMITTED TRANSFEREES © This Letter of Credit may be transferred by Beneficiary upon providing Lender with prior written notice of the transfer. The Transferee shall be deemed the new Beneficiary of this Letter of Credit and the documents of the Transferee, including drafts required under this Letter of Credit, are to be processed by Lender (or any intermediary) without the original Beneficiary's intervention and without any further responsibility on Lender's part to the original Beneficiary. ❑ The right to draw under this Letter of Credit shall be nontransferable,except for: A. A transfer(in its entirety, but not in part) by direct operation of law to the original Beneficiary's administrator, executor, bankruptcy trustee,receiver, liquidator,successor,or other representatives at law; and B. The first immediate transfer (in its entirety, but not in part) by such legal representative to a third party after express approval of a governmental body Qudicial,administrative,or executive). LP-IA602 ©FormAtion Technologies,Inc. (3/10/93) (800)937-3799 4. TRANSFEREE'S REQUIRED DOCUMENTS . When the presenter is a permitted Transferee under paragraph 3 above,the documents required for a draw shall include: A. All documents required elsewhere in this Letter of Credit, except that such documents may be in the name of either the original Beneficiary or the presenter permitted by paragraph 3; and B. When the presenter is a permitted Transferee under paragraph &A or a third parry under 3.13, a certified copy of the one or more documents which show the presenter's authority to claim through or to act with authority for the original Beneficiary. 5. TIMING OF DISHONOR Under no circumstances shall Lender be precluded from relying upon any reason for dishonor given in a communication which Beneficiary or the presenter receives within three (3) Banking Days after Lender has received the last document forming part of Beneficiary's presentment(the"Three-Day Period"). Lender shall be entitled to rely upon any such reason without regard to either(i)the timing of any presentment made before the Expiry Date, or (ii) the timing inside the Three-Day Period of any preliminary communication(s)from Lender concerning the dishonor decision itself or any reason for dishonor. For any such reason so given during the Three-Day Period, Lender shall be conclusively deemed to have met the "reasonable time", "without delay", and other timing requirements as the U.C.P. may impose. The Expiry Date shall not be extended to accommodate a presentment made with less than three (3) Banking Days to go before the Expiry Date, and Beneficiary shall not be entitled to submit a draw request or provide Lender with any documents in support of a draw after the expiration date hereof. Nor shall Lender ever be required to communicate a dishonor decision or its reasons within a time less than the Three-Day Period. "Banking Day" shall mean any day on which commercial banks located in the state of Lender's address are either not authorized or are not required to close. 6. COMPLIANCE BURDEN Under no circumstances shall Lender be held responsible for any impossibility or other difficulty in achieving strict compliance with the requirements of this Letter of Credit precisely as written. Beneficiary understands and acknowledges: (i)that unless and until the present wording of this Letter of Credit is amended with Lender's prior written consent, the burden of complying strictly with such wording remains solely upon Beneficiary; and (ii)that Lender is relying upon the lack of such amendment as constituting Beneficiary's initial and continued approval of such wording. 7. NON-SEVERABILITY If any aspect of this Letter of Credit is ever declared unenforceable for any reason by any court or governmental body having jurisdiction, Lender's entire engagement under this Letter of Credit shall be deemed null and void ab initio, and both Lender and Beneficiary shall be restored to the position each would have occupied with all rights available as though this Letter of Credit had never occurred. This non-severability provision shall override all other provisions in this Letter of Credit, no matter where such provision appears within the Letter's body. 8. CHOICE OF LAW/JURISDICTION The Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (hereinafter called the"UCP") shall in all respects be deemed a part hereof as fully as if incorporated herein and shall apply to this Letter of Credit. This Agreement shall be governed by and construed in accordance with the laws of the State of IOWA , United States of America, except to the extent such laws are inconsistent with the UCP. Lender and Beneficiary consent to the jurisdiction and venue of any court located in the State of IOWA in the event of any legal proceeding under this Letter of Credit. 9. EXPIRY Lender hereby agrees with Beneficiary that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Lender on or before the Expiration Date. Dated: JANUARY 27, 2003 LENDER:/FIRST AMERICAN BANK BY. <� A. THILGES TITLE: VICE PRESIDENT ENDORSEMENT OF DRAFTS DRAWN: Amount Amount Date Negotiated By In Words In Figures LP-IA602 ©FormAtion Technologies,Inc. (3/10/93) (800)937-3799 Lt City Clerk's Office 515 Clark Avenue,P. O.Box 811 CaHng k Ames,IA 50010 etianal Servrvice`y '8"°Ew Phone: 515-239-5105 Farep Fax: 515-239-5142 January 15, 2003 Terra Firma, L.P. 207 Stanton Avenue Ames, Iowa 50014 Attention David Keller RE: South Fork Subdivision, I"Addition Dear Mr. Keller: 4 � At their meeting of January 14, 2003, the Ames City Council adopted Resolution No. 03-012 accepting completion of the installation of street lights required in the above-named Subdivision. Subsequently, the security to ensure completion of the asphalt street surface paving has been lessened to $31,500. Please provide a new Letter of Credit in the that amount at your earliest convenience. Thank you, in advance, for your cooperation. Sincerely, Diane Voss City Clerk /dry Copy to: First American Bank f RESOLUTION NO. 03-012 RESOLUTION ACCEPTING PARTIAL COMPLETION OF PUBLIC IMPROVEMENTS REQUIRED FOR SOUTH FORK SUBDIVISION, 1ST ADDITION, FOR THE CITY OF AMES, IOWA BE IT RESOLVED, by the City Council of the City of Ames, Iowa: Section One. In accordance with the Certificate of the Public Works Department,the street lights required as a condition for approval of the final plat of the above-named Subdivision have been completed in an acceptable manner. Section Two. The bond given to secure performance of the public improvements is hereby lessened to $31,500 for the remaining work that includes asphalt street surface paving. Done this 14th day of January, 2003. Diane R. Voss, City Clerk Ted Tedesco, Mayor Introduced by: Cross Seconded by: Goodhue Voting aye: Cross, Goodhue, Hoffman, Mahayni, Vegge, Wirth Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 14'day of January, 2003. ElJ IGIARIf C FIRST ^— AMERICAN REF: SOUTH: FORK SUBDIVISION, 1st ADDITION IRREVOCABLE BANK 1207 Central Avenue-Box 798-Fort Dodge,IA 50501 CITY OF AMES LETTER OF 515-573-2154-Fax 515-573-8582 "LENDER" CREDIT 515 CLARK AVENUE NO.: 10072647 AMES, IA 50010 TELEPHONE N©': IDgNTIP11 ATION:NO . Ci;ISTOCWh»Ft 3:)P..''T. N TERRA FIRMA, L.P. This Letter of Credit shall expire upon the earlier of: 1. the close of business on DECEMBER 1, 2002 and all drafts and accompanying statements or documents �pqs must be presented to Lender on or before that time; or 207 STANTON AVE 2. the day that Lender honors a draw under which the full AMES, IA 50010 amount of th ICkT is Letter of Credit is drawn. TELEAk1DNE NO EDENTIF [ON:NO Lender indicated above ("Lender") hereby establishes at the request and for the account of Customer an Irrevocable Letter of Credit in favor of Beneficiary for a sum or sums not exceeding the aggregate amount of FIFTY-ONE THOUSAND FIVE HUNDRED AND N0/100 Dollars ($ 51,500.00 ), These funds shall be made available to Beneficiary against Lender's receipt from Beneficiary of drafts drawn at sight on Lender at its address indicated above (or such other address that Lender may provide Beneficiary with written notice of in the future) during regular business hours and accompanied by the signed written statements or documents indicated below. WARNING TO BENEFICIARY: PLEASE EXAMINE THIS LETTER OF CREDIT AT ONCE. IF YOU FEEL UNABLE TO MEET ANY OF ITS REQUIREMENTS, EITHER SINGLY OR TOGETHER, YOU SHOULD CONTACT YOUR CUSTOMER IMMEDIATELY TO SEE IF THE LETTER OF CREDIT CAN BE AMENDED. OTHERWISE, YOU WILL RISK LOSING PAYMENT UNDER THIS LETTER OF CREDIT FOR FAILURE TO COMPLY STRICTLY WITH ITS TERMS AS WRITTEN. 1. DRAFT TERMS AND CONDITIONS Lender shall honor the drafts submitted by Beneficiary under the following terms and conditions: EACH DRAFT MUST STATE THAT IT IS "DRAWN UNDER FIRST AMERICAN BANK OF AMES LETTER OF CREDIT NO. 10072647 DATED SEPTEMBER 30, 2002, FOR THE ACCOUNT OF TERRA FIRMA, L.P." THE BANK AGREES WITH THE DRAWER, ENDORSERS, AND BONA FIDE HOLDERS OF ALL DRAFTS UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE LETTER OF CREDIT THAT SUCH DRAFTS WILL BE HONORED UPON PRESENTATION TO THE LENDER. THE ORIGINAL LETTER OF CREDIT AS FIRST REQUIRED DOCUMENT WILL BE REPLACED BY YOUR SIGNED STATEMENT WHICH WILL READ, "THE ORIGINAL LETTER OF CREDIT HAS NOT BEEN ENDORSED BY ANY PARTY FOR PAYMENT OF ANY PRIOR DRAFT." THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORMS, CUSTOMS & PRACTICE FOR DOCUMENTARY CREDIT (1983 REV.) INT. Upon Lender's honor of such drafts and payment to the Beneficiary, Lender, once the full amount of credit available under this Letter of Credit has been drawn,shall be fully discharged of its obligations under this Letter of Credit and shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such demand for payments to Beneficiary or any other person. If a non-conforming demand is made, Lender shall notify Beneficiary of its dishonor on or before the time mentioned in Section 5 below. Beneficiary shall have no recourse against Lender for any amount paid under this Letter of Credit after Lender honors any draft or other document which complies strictly with this Letter of Credit, and which on its face appears otherwise in order but which is signed, issued, or presented by any parry or under the name of any party purporting to act for Beneficiary, purporting to claim through Beneficiary,or posing as Beneficiary. By paying to Beneficiary an amount demanded in accordance with this Letter of Credit, Lender makes no representation as to the correctness of the amount demanded and Lender shall not be liable to Beneficiary or any other person for or in respect to any amount so paid or disbursed for any reason whatsoever, including, without limitation, any nonapplication or misapplication by Beneficiary of the proceeds of such payment. By presenting upon Lender or a confirming bank, Beneficiary certifies that Beneficiary has not and will not present upon the other, unless and until Beneficiary meets with dishonor. Beneficiary promises to return to Lender or a confirming bank any funds received by Beneficiary in excess of the Letter of Credit's maximum drawing amount. 2. USE RESTRICTIONS All drafts must be marked"DRAWN UNDER FIRST AMERICAN BANK IRREVOCABLE LETTER OF CREDIT NO. 10072647 DATED AUGUST 28 2002 ", and the amount of each draft shall be marked on the draft. Only Beneficiary or Beneficiary's Transferee(only if transferable) may complete a draft and accompanying statements or documents required by this Letter of Credit and make a draw under this Letter of Credit. This original Letter of Credit must accompany any draft drawn hereunder. Partial draws 141 are permitted ❑ are not permitted under this Letter of Credit. Lender's honor of a partial draw shall correspondingly reduce the amount of credit available under this Letter of Credit. Following a partial draw, Lender shall return this original Letter of Credit to Beneficiary with the partial draw noted thereon; in the alternative, and in its sole discretion, Lender may issue a substitute Letter of Credit to Beneficiary in the amount shown above less any partial draw(s). 3. PERMITTED TRANSFEREES © This Letter of Credit may be transferred by Beneficiary upon providing Lender with prior written notice of the transfer. The Transferee shall be deemed the new Beneficiary of this Letter of Credit and the documents of the Transferee, including drafts required under this Letter of Credit, are to be processed by Lender (or any intermediary) without the original Beneficiary's intervention and without any further responsibility on Lender's part to the original Beneficiary. ❑ The right to draw under this Letter of Credit shall be nontransferable,except for: A. A transfer (in its entirety, but not in part) by direct operation of law to the original Beneficiary s administrator, executor, bankruptcy trustee, receiver, liquidator,successor,or other representatives at law; and B. The first immediate transfer (in its entirety, but not in part) by such legal representative to a third party after express approval of a governmental body(judicial,administrative,or executive). LP-IA602 ©ForrnAtion Technologies,Inc. (3/10/93) (800)937-3799 4. TRANSFEREE'S REQUIRED DOCUMENTS When the presenter is a permitted Transferee under paragraph 3 above,the documents required for a draw shall include: A. All documents required elsewhere in this Letter of Credit, except that such documents may be in the name of either the original Beneficiary or the presenter permitted by paragraph 3; and B. When the presenter is a permitted Transferee under paragraph 3.A or a third party under 3.13, a certified copy of the one or more documents which show the presenter's authority to claim through or to act with authority for the original Beneficiary. 5. TIMING OF DISHONOR Under no circumstances shall Lender be precluded from relying upon any reason for dishonor given in a communication which Beneficiary or the presenter receives within three (3) Banking Days after Lender has received the last document forming part of Beneficiary's presentment(the"Three-Day Period"). Lender shall be entitled to rely upon any such reason without regard to either(i)the timing of any presentment made before the Expiry Date, or (ii) the timing inside the Three-Day Period of any preliminary communication(s)from Lender concerning the dishonor decision itself or any reason for dishonor. For any such reason so given during the Three-Day Period, Lender shall be conclusively deemed to have met the "reasonable time", "without delay", and other timing requirements as the U.C.P. may impose. The Expiry Date shall not be extended to accommodate a presentment made with less than three (3) Banking Days to go before the Expiry Date, and Beneficiary shall not be entitled to submit a draw request or provide Lender with any documents in support of a draw after the expiration date hereof. Nor shall Lender ever be required to communicate a dishonor decision or its reasons within a time less than the Three-Day Period. "Banking Day' shall mean any day on which commercial banks located in the state of Lender's address are either not authorized or are not required to close. 6. COMPLIANCE BURDEN Under no circumstances shall Lender be held responsible for any impossibility or other difficulty in achieving strict compliance with the requirements of this Letter of Credit precisely as written. Beneficiary understands and acknowledges: (i) that unless and until the present wording of this Letter of Credit is amended with Lender's prior written consent, the burden of complying strictly with such wording remains solely upon Beneficiary; and (ii)that Lender is relying upon the lack of such amendment as constituting Beneficiary's initial and continued approval of such wording. 7. NON-SEVERABILITY If any aspect of this Letter of Credit is ever declared unenforceable for any reason by any court or governmental body having jurisdiction, Lender's entire engagement under this Letter of Credit shall be deemed null and void ab initio,and both Lender and Beneficiary shall be restored to the position each would have occupied with all rights available as though this Letter of Credit had never occurred. This non-severability provision shall override all other provisions in this Letter of Credit, no matter where such provision appears within the Letter's body. 8. CHOICE OF LAW/JURISDICTION The Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (hereinafter called the"UCP") shall in all respects be deemed a part hereof as fully as if incorporated herein and shall apply to this Letter of Credit. This Agreement shall be governed by and construed in accordance with the laws of the State of IOWA , United States of America, except to the extent such laws are inconsistent with the UCP. Lender and Beneficiary consent to the jurisdiction and venue of any court located in the State of IOWA in the event of any legal proceeding under this Letter of Credit. 9. EXPIRY Lender hereby agrees with Beneficiary that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Lender on or before the Expiration Date. Dated: AUGUST 28, 2002 LENDER: FIRST AMERIC BANK BY: ERIC . TITLE: VICE PRESIDENT ENDORSEMENT OF DRAFTS DRAWN: Amount Amount Date Negotiated By In Words In Figures LP-IA602 ©FormAtion Technologies,Inc. (3/10/93) (800)937-3799 City Clerk's Office 515 Clark Avenue,P. O.Box 811 Ca.iagPropk Ames,IA 50010 P,a9 Phone: 515-239-5105 ewes Service Fax: 515-239-5142 October 8, 2002 TO WHOM IT MAY CONCERN: I,Diane R.Voss,hereby certify that I have this date received from Terra Firma,L.P.,a Letter of Credit in the amount of$51,500. Said instrument has been placed on file in the Ames City Clerk's Office, 515 Clark Avenue, for the completion of street lights ($20,000) and asphalt street surface paving ($31,500) in the South Fork Subdivision, 1 st Addition, to the City of Ames, Iowa. By: Diane R. Voss Title: City Clerk City Clerk's Office 515 Clark Avenue,P.O.Box 811 asp-vk Ames,IA 50010 Q-1in P-g— Phone: 515-239-5105 Ewepda"Zemke Fax:515-239-5142 August 1, 2002 TO WHOM IT MAY CONCERN: I, Jill L. Ripperger, hereby certify that I have this date received from Terra Firma LP, an Irrevocable Standby Letter of Credit No. 10049610 from First American Bank in the amount of$230,000.00. Said instrument has been placed on file in the Ames City Clerk's Office, 515 Clark Avenue, for the development of street paving, bike path, streetlights public improvements in The South Fork Subdivision, Pt Addition, City of Ames, Iowa. Jill L. Ripperger Title: Deputy City Clerk - City Clerk's Office 515 Clark Avenue,P. 0. Box 811 Ames,IA 50010 QQuatuy r,a"��wgra„u Phone: 515-239-5105 �p;�a� Fax: 515-239-5142 January 28, 2002 TO WHOM IT MAY CONCERN: I,Diane R.Voss,hereby certify that I have this date received from Terra Firma,L.P.,a Letter of Credit in the amount of$596,000. Said instrument has been placed on file in the Ames City Clerk's Office, 515 Clark Avenue, for the completion of the sanitary sewer,water main,storm sewer,street paving,alley paving,and inspection services in the South Fork Subdivision, 1st Addition, to the City of Ames, Iowa. By: Diane R. Voss Title: City Clerk BANK LETTER OF 1207 Central Avenue-Box 798-Fort Dodge,IA 50501 CITY OF AMES 515-573.2154-Fax 515-573-8582 •LENDER" CREDIT AO00 S: : 515 CLARK AVENUE NO.: 10049610 AMES, IA 50010 i�tEPH4NNQ ID€NIIptGArIGtNP. C, cusra�na illr €nlrr>» TERRA FIRMA, L.P. This Letter of Credit shall expire upon the earlier of: 1. the close of business on DECEMBER 31, 2002 and all drafts and accompanying statements or documents A1►pHSSS must be presented to Lender on or before that time; or 207 STANTON AVENUE 2. the day that Lender honors a draw under which the full AMES, IA 50010 - amount of this Letter of Credit is drawn. io Lender indicated above("Lender") hereby establishes at the request and for the account of Customer an Irrevocable Letter of Credit in favor of Beneficiary for a sum or sums not exceeding the aggregate amount of TWO HUNDRED THIRTY THOUSAND AND NO/100 Dopes ($ 230,000.00 ), These funds shall be made available to Beneficiary against Lender's receipt from Beneficiary of drafts drawn at sight on Lender at its address indicated above (or such other address that Lender may provide Beneficiary with written notice of in the future) during regular business hours and accompanied by the signed written statements or documents indicated below. WARNING TO BENEFICIARY: PLEASE EXAMINE THIS LETTER OF CREDIT AT ONCE. IF YOU FEEL UNABLE TO MEET ANY OF ITS REQUIREMENTS, EITHER SINGLY OR TOGETHER, YOU SHOULD CONTACT YOUR CUSTOMER IMMEDIATELY TO SEE IF THE LETTER OF CREDIT CAN BE AMENDED. OTHERWISE, YOU WILL RISK LOSING PAYMENT UNDER THIS LETTER OF CREDIT FOR FAILURE TO COMPLY STRICTLY WITH ITS TERMS AS WRITTEN. 1. DRAFT TERMS AND CONDITIONS Lender shall honor the drafts submitted by Beneficiary under the following terms and conditions: EACH DRAFT MUST STATE THAT IT IS "DRAWN UNDER FIRST AMERICAN BANK OF AMES LETTER OF CREDIT NO. 10049610 DATED JANUARY 28, 2002 FOR THE ACCOUNT OF TERRA FIRMA, L.P." THE BANK AGREES WITH THE DRAWER, ENDORSERS, AND BONA FIDE HOLDERS OF ALL DRAFTS UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE LETTER OF CREDIT THAT SUCH DRAFTS WILL BE HONORED UPON PRESENTATION TO THE DRAWER. THE ORIGINAL LETTER OF CREDIT AS FIRST REQUIRED DOCUMENT WILL BE REPLACED BY YOUR SIGNED STATEMENT WHICH WILL READ, "THE ORIGINAL LETTER OF CREDIT HAS NOT BEEN ENDORSED BY ANY PARTY FOR PAYMENT OF ANY PRIOR DRAFT." THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORMS, CUSTOMS & PRACTICE FOR DOCUMENTARY CREDIT (1983 REV.) INT. Upon Lender's honor of such drafts and payment to the Beneficiary, Lender, once the full amount of credit available under this Letter of Credit has been drawn,shall be fully discharged of its obligations under this Letter of Credit and shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such demand for payments to Beneficiary or any other person. If a non-conforming demand is made, Lender shall notify Beneficiary of its dishonor on or before the time mentioned in Section 5 below. Beneficiary shall have no recourse against Lender for any amount paid under this Letter of Credit after Lender honors any draft or other document which complies strictly with this Letter of Credit, and which on its face appears otherwise in order but which is signed, issued, or presented by any party or under the name of any party purporting to act for Beneficiary,purporting to claim through Beneficiary,or posing as Beneficiary. By paying to Beneficiary an amount demanded in accordance with this Letter of Credit, Lender makes no representation as to the correctness of the amount demanded and Lender shall not be liable to Beneficiary or any other person for or in respect to any amount so paid or disbursed for any reason whatsoever, including, without limitation, any nonapplication or misapplication by Beneficiary of the proceeds of such payment. By presenting upon Lender or a confirming bank, Beneficiary certifies that Beneficiary has not and will not present upon the other, unless and until Beneficiary meets with dishonor. Beneficiary promises to return to Lender or a confirming bank any funds received by Beneficiary in excess of the Letter of Credit's maximum drawing amount. 2. USE RESTRICTIONS All drafts must be marked"DRAWN UNDER FIRST AMERICAN BANK IRREVOCABLE LETTER OF CREDIT NO. 10049610 DATED JULY 29, 2002 ", and the amount of each draft shall be marked on the draft. Only Beneficiary or Beneficiary's Transferee(only if transferable) may complete a draft and accompanying statements or documents required by this Letter of Credit and make a draw under this Letter of Credit. This original Letter of Credit must accompany any draft drawn hereunder. Partial draws ® are permitted ❑ are not permitted under this Letter of Credit. Lender's honor of a partial draw shall correspondingly reduce the amount of credit available under this Letter of Credit. Following a partial draw, Lender shall return this original Letter of Credit to Beneficiary with the partial draw noted thereon; in the alternative, and in its sole discretion, Lender may issue a substitute Letter of Credit to Beneficiary in the amount shown above less any partial draw(s). 3. PERMITTED TRANSFEREES ® This Letter of Credit may be transferred by Beneficiary upon providing Lender with prior written notice of the transfer. The Transferee shall be deemed the new Beneficiary of this Letter of Credit and the documents of the Transferee, including drafts required under this Letter of Credit, are to be processed by Lender (or any intermediary) without the original Beneficiary s intervention and without any further responsibility on Lender's part to the original Beneficiary. ❑ The right to draw under this Letter of Credit shall be nontransferable,except for: A. A transfer (in its entirety, but not in part) by direct operation of law to the original Beneficiary's administrator, executor, bankruptcy trustee, receiver,liquidator,successor,or other representatives at law;and B. The first immediate transfer (in its entirety, but not in part) by such legal representative to a third party after express approval of a governmental body(judicial,administrative,or executive). LP.IA602 0 FormAtion Technologies,Inc. (3/10/93) (800)937.3799 •• •• `"`" +. .�,u.� i—lullQU o1J00110I1Z ul aus t_errer or t.�realt, except that such documents may be in the name of either the origi Beneficiary or the presenter permitted by paragraph 3;and B. When the presenter is a permitted Transferee under paragraph 3.A or a third parry under 3.6, a certified copy of the one or me documents which show the presenter's authority to claim through or to act with authority for the original Beneficiary. 5. TIMING OF DISHONOR Under no circumstances shall Lender be precluded from relying upon any reason for dishonor given in a communication whi Beneficiary or the presenter receives within three (3) Banking Days after Lender has received the last document forming part Beneficiary's presentment(the"Three-Day Period"). Lender shall be entitled to rely upon any such reason without regard to either(i)tl timing of any presentment made before the Expiry Date, or (ii) the timing inside the Three-Day Period of any preliminE communication(s)from Lender concerning the dishonor decision itself or any reason for dishonor. For any such reason so given durif the Three-Day Period, Lender shall be conclusively deemed to have met the `reasonable time", "without delay', and other timir requirements as the U.C.P. may impose. The Expiry Date shall not be extended to accommodate a presentment made with less th, three (3) Banking Days to go before the Expiry Date, and Beneficiary shall not be entitled to submit a draw request or provide Lend with any documents in support of a draw after the expiration date hereof. Nor shall Lender ever be required to communicate a dishorn decision or its reasons within a time less than the Three-Day Period. "Banking Day" shall mean any day on which commercial banl located in the state of Lender's address are either not authorized or are not required to close. 6. COMPLIANCE BURDEN Under no circumstances shall Lender be held responsible for any impossibility or other difficulty in achieving strict compliance with tl requirements of this Letter of Credit precisely as written. Beneficiary understands and acknowledges: (i) that unless and until the prese wording of this Letter of Credit is amended with Lender's prior written consent, the burden of complying strictly with such wordir remains solely upon Beneficiary, and (ii)that Lender is relying upon the lack of such amendment as constituting Beneficiary's initial ar continued approval of such wording. 7. NON-SEVERABILITY If any aspect of this Letter of Credit is ever declared unenforceable for any reason by any court or governmental body having jurisdiction Lender's entire engagement under this Letter of Credit shall be deemed null and void ab initio, and both Lender and Beneficiary shall b restored to the position each would have occupied with all rights available as though this Letter of Credit had never occurred. Thi non-severability provision shall override all other provisions in this Letter of Credit, no matter where such provision appears within th Letter's body. 8. CHOICE OF LAW/JURISDICTION The Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (hereinafter called the"UCP") shall in all respects be deemed a part hereof as fully as if incorporated herein and shall apply to this Lette of Credit. This Agreement shall be governed by and construed in accordance with the laws of the State of IOWA United States of America, except to the extent such laws are inconsistent with the UCP. Lender and Beneficiary consent to the jurisdiction and venue of any court located in the State of IOWA in the event of any legal proceeding unde, this Letter of Credit. 9. EXPIRY Lender hereby agrees with Beneficiary that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Lender on or before the Expiration Date. Dated: JULY 29, 2002 LENDER: FIRST AMBRIC B r-- BY:. ERIC T.WILSO TITLE: VICE PRESIDENT ENDORSEMENT OF DRAFTS DRAWN: Amount Date Negotiated By In Words In Figures LP-IA602 ©FormAtion Technologies,Inc. (3/10/93) (800)937-3799 NIM FIRST MAAMERICAN BANK IRREVOCABLE 1207 Central Avenue-Box 798-Fort Dodge,IA 50501 CITY OF AMES LETTER OF 515-573-2154-Fax 515-573-&W2 `LENDER' CREDIT ........... ....... .......... ..................... ............. ............... 515 CLARK AVENUE AMES, IA 50010 NO.: 10049610 ...........:...... ....... ........ w xx CUSTOMER MT ........... TERRA FIRMA, L.P. This Letter of Credit shall expire upon the earlier of RE: SOUT[l FORK SUBDIVISION, ZEaVjOADDM= 1. the close of business on FIRST ADDITION JULY 1, 2002 and all drafts and accompanying statements or documents ........ must be presented to Lender on or before that time;or . ........... 207 STANTON AVENUE 2. the day that Lender honors a draw under which the full AMES, IA ...5.9010 amount of this Letter of Credit is drawn. Lender indicated above("Lender") hereby establishes at the request and for the account of Customer an Irrevocable Letter of Credit in favor of Beneficiary for a sum or sums not exceeding the aggregate amount of FIVE HUNDRED NINETY-SIX THOUSAND AND NO/100 Dollars ($— 596,000.00 These funds shall be made available to Beneficiary against Lender's receipt from Beneficiary of drafts drawn at sight on Lender at its address indicated above (or such other address that Lender may provide Beneficiary with written notice of in the future) during regular business hours and accompanied by the signed written statements or documents indicated below. WARNING TO BENEFICIARY: PLEASE EXAMINE THIS LETTER OF CREDIT AT ONCE. IF YOU FEEL UNABLE TO MEET ANY OF ITS REQUIREMENTS, EITHER SINGLY OR TOGETHER, YOU SHOULD CONTACT YOUR CUSTOMER IMMEDIATELY TO SEE IF THE LETTER OF CREDIT CAN BE AMENDED. OTHERWISE, YOU WILL RISK LOSING PAYMENT UNDER THIS LETTER OF CREDIT FOR FAILURE TO COMPLY STRICTLY WITH ITS TERMS AS WRITTEN. 1. DRAFT TERMS AND CONDITIONS Lender shall honor the drafts submitted by Beneficiary under the following terms and conditions: EACH DRAFT MUST STATE THAT IT IS "DRAWN UNDER FIRST AMERICAN BANK OF AXES LETTER OF CREDIT NO. 10049610 DATED JANUARY 28, 2002 FOR THE ACCOUNT OF TERRA FIRMA, L.P." THE BANK AGREES WITH THE DRAWER, ENDORSERS, AND BONA FIDE HOLDERS OF ALL DRAFTS UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE LETTER OF CREDIT THAT SUCH DRAFTS WILL BE HONORED UPON PRESENTATION TO THE DRAWER. THE ORIGINAL LETTER OF CREDIT AS FIRST REQUIRED DOCUMENT WILL BE REPLACED BY YOUR SIGNED STATEMENT WHICH WILL READ, "THE ORIGINAL LETTER OF CREDIT HAS NOT BEEN ENDORSED BY ANY PARTY FOR PAYMENT OF ANY PRIOR DRAFT." THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORMS, CUSTOMS & PRACTICE FOR DOCUMENTARY CREDIT (1983 REV.) INT. Upon Lender's honor of such drafts and payment to the Beneficiary, Lender,once the full amount of credit available under this Letter of Credit has been drawn,shall be fully discharged of its obligations under this Letter of Credit and shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such demand for payments to Beneficiary or any other person. If a non-conforming demand is made, Lender shall notify Beneficiary of its dishonor on or before the time mentioned in Section 5 below. Beneficiary shall have no recourse against Lender for any amount paid under this Letter of Credit after Lender honors any draft or other document which complies strictly with this Letter of Credit, and which on its face appears otherwise In order but which is signed, issued, or presented by any party or under the name of any party purporting to act for Beneficiary,purporting to claim through Beneficiary,or posing as Beneficiary. By paying to Beneficiary an amount demanded in accordance with this Letter of Credit, Lender makes no representation as to the correctness of the amount demanded and Lender shall not be liable to Beneficiary or any other person for or in respect to any amount so paid or disbursed for any reason whatsoever, including, without limitation, any nonapplication or misapplication by Beneficiary of the proceeds of such payment. By presenting upon Lender or a confirming bank, Beneficiary certifies that Beneficiary has not and will not present upon the other, unless and until Beneficiary meets with dishonor. Beneficiary promises to return to Lender or a confirming bank any funds received by Beneficiary in excess of the Letter of Credit's maximum drawing amount. 2. USE RESTRICTIONS All draft must be marked*DRAWN UNDER FIRST AMERICAN BANK IRREVOCABLE LETTER OF CREDIT NO. 10049610 DATED JANUARY 28, 2002 and the amount of each draft shall be marked on the draft. Only Beneficiary or Beneficiary's Transferee(only if transferable) may complete a draft and accompanying statements or documents required by this Letter of Credit and make a draw under this Letter of Credit. This original Letter of Credit must accompany any draft drawn hereunder. Partial draws 7X are permitted 0 are not permitted under this Letter of Credit. Lenders honor of a partial draw shall correspondingly reduce the amount of credit available under this Letter of Credit. Following a partial draw, Lender shall return this original Letter of Credit to Beneficiary with the partial draw noted thereon; in.the alternative, and in its sole discretion, Lender may issue a substitute Letter of Credit to Beneficiary in the amount shown above less any partial draw(s). 3. PERMITTED TRANSFEREES KI This Letter of Credit may be transferred by Beneficiary upon providing Lender with prior written notice of the transfer. The Transferee shall be deemed the new Beneficiary of this Letter of Credit and the documents of the Transferee, including drafts required under this Letter of Credit, are to be processed by Lender (or any intermediary) without the original Beneficiary's intervention and without any further responsibility on Lender's part to the original Beneficiary. El The right to draw under this Letter of Credit shall be nontransferable,except for: A. A transfer (in its entirety, but not in part) by direct operation of law to the original Beneficiary's administrator, executor, bankruptcy trustee,receiver, liquidator,successor,or other representatives at law, and B. The first immediate transfer (in its entirety, but not in part) by such legal representative to a third party after express approval of a governmental body(judicial,administrative,or executive). LP-IA802 4D FormAtion Technologies,Inc. (3/10/93) (800)937-3799 4. TRANSFEREE'S KFUUIRtU UUI;UMtN I S When the'presertter is a permitted Transferee under paragraph 3 above,the documents required for a draw shall include: ` A. All documents required elsewhere in this Letter of Credit, except that such documents may be in the name of either the original Beneficiary or the presenter permitted by paragraph 3;and B. When the presenter is a permitted Transferee under paragraph 3.A or a third party under 3.6, a certified copy of the one or more documents which show the presenter's authority to claim through or to act with authority for the original Beneficiary. 5. TIMING OF DISHONOR Under no circumstances shall Lender be precluded from relying upon any reason for dishonor given in a communication which Beneficiary or the presenter receives within three (3) Banking Days after Lender has received the last document forming part of Beneficiary's presentment(the"Three-Day Period"). Lender shall be entitled to rely upon any such reason without regard to either(i)the timing of any presentment made before the Expiry Date, or (ii) the timing inside the Three-Day Period of any preliminary communication(s)from Lender concerning the dishonor decision itself or any reason for dishonor. For any such reason so given during the Three-Day Period, Lender shall be conclusively deemed to have met the "reasonable time", "without delay", and other timing requirements as the U.C.P. may impose. The Expiry Date shall not be extended to accommodate a presentment made with less than three (3) Banking Days to go before the Expiry Date, and Beneficiary shall not be entitled to submit a draw request or provide Lender with any documents in support of a draw after the expiration date hereof. Nor shall Lender ever be required to communicate a dishonor decision or its reasons within a time less than the Three-Day Period. "Banking Day" shall mean any day on which commercial banks located in the state of Lender's address are either not authorized or are not required to close. 6. COMPLIANCE BURDEN Under no circumstances shall Lender be held responsible for any impossibility or other difficulty in achieving strict compliance with the requirements of this Letter of Credit precisely as written. Beneficiary understands and acknowledges: (i)that unless and until the present wording of this Letter of Credit is amended with Lender's prior written consent, the burden of complying strictly with such wording remains solely upon Beneficiary; and (ii)that Lender is relying upon the lack of such amendment as constituting Beneficiarys initial and continued approval of such wording. 7. NON-SEVERABILITY If any aspect of this Letter of Credit is ever declared unenforceable for any reason by any court or governmental body having jurisdiction, Lender's entire engagement under this Letter of Credit shall be deemed null and void ab initio,and both Lender and Beneficiary shall be restored to the position each would have occupied with all rights available as though this Letter of Credit had never occurred. This non-severability provision shall override all other provisions in this Letter of Credit, no matter where such provision appears within the Letter's body. 8. CHOICE OF LAW/JURISDICTION The Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (hereinafter called the"UCP') shall in all respects be deemed a part hereof as fully as if incorporated herein and shall apply to this Letter of Credit. This Agreement shall be governed by and construed in accordance with the laws of the State of IOWA , United States of America, except to the extent such laws are inconsistent with the UCP. Lender and Beneficiary consent to the jurisdiction and venue of any court located in the State of IOWA in the event of any legal proceeding under this Letter of Credit. 9. EXPIRY Lender hereby agrees with Beneficiary that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Lender on or before the Expiration Date. Dated: JULY 29, 2002 LENDER: FIRST ANERIC B BY: ERIC T. WILSO TITLE: VICE PRESIDENT ENDORSEMENT OF DRAFTS DRAWN: Amount Amount Date Negotiated By In Words In Figures LP-MM ©FormAtlon Technologies,Inc. (3/10/93) (800)937-3799