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perform such construction on a pro rata basis in proportion to <br /> each party's percentage contribution. If the Hansen Line is not <br /> built, K&L and Safeway shall not be entitled to any refund of the <br /> Four Hundred Thousand Dollars ($400, 000) advanced to the City for <br /> design of the Hansen Line, except to the extent any balance of <br /> such amount is held by the City following completion of the <br /> Hansen Line or the Alternative Means, or abandonment of <br /> construction thereof. <br /> (d) Security. In fulfillment of the obligation to <br /> contribute their respective percentages of the K&L/Safeway Share <br /> as set forth in Paragraph 4 (c) above, K&L and Safeway shall each <br /> deliver a letter of credit substantially in the form attached <br /> " hereto as Exhibit E for the benefit of the City to secure each <br /> such party's payment of its percentage of the K&L/Safeway Share <br /> less the Credit. Such letters of credit shall be in a form <br /> acceptable to the City and shall be delivered on or before the <br /> date (the "Delivery Date") that K&L or Safeway first receives <br /> Sewage Services through the Corral Hollow Line. Such letters of <br /> credit shall be maintained or renewed by K&L and Safeway for a <br /> Period of seven7 <br /> ( ) Years from the Delivery Date. All draws <br /> against the letters of credit shall be made <br /> rainst <br /> letters of credit in amounts corresponding tothe aK&LaPercentageh <br /> and the Safeway Percentage. The City shall draw upon the letters <br />� E. of credit only if: (i) K&L and/or Safeway have failed, within <br /> i fifteen (15) days of the City' s written request therefor, to <br /> deposit with the City funds in the amount of their respective <br /> percentages of the K&L/Safeway Share less the Credit, and (ii) <br /> the City intends to award the contract for construction of the <br /> Hansen Line (or the Alternative Means) within fifteen (15) days <br /> of such draw. In the event the contract for construction of the <br /> Hansen Line (or the Alternative Means) is not awarded within <br /> thirty -(30) days of any draw on the letters of credit, all funds <br /> drawn against the letters of. credit shall be refunded to K&L and <br /> Safeway at such time as the letters of credit are reinstated by <br /> K&L or Safeway, provided, however, that either K&L or Safeway <br /> shall at any time have the option to place its respective <br /> contribution in an account in the name of the City with interest <br /> accruing for the benefit of K&L or Safeway, <br /> The immediatelypreceding as the case may be. <br /> resulting from failure to renewsornextend shallanletterot loftcreditain <br /> accordance with the requirements of this Agreement, in which case <br /> the latest date which the City shall be entitled to hold any <br /> funds so drawn without commencing construction of the Hansen Line <br /> or the Alternative Means shall be the date (the "Outside Date" <br /> which is seven (7) years from delivery of the letters of credit. <br /> The City shall promptly refund to K&L and Safeway the remaining <br /> balance of the amounts drawn against the letters of credit or <br /> placed in the accounts) described above, if any, upon the <br /> earlier of the completion of the Hansen Line or the Outside Date <br /> (unless the City is constructing the Hansen Line or the <br /> Alternative Means on such date, in which case the City may retain <br /> sb\mhw\watersup.agr <br />