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perform such construction on a pro rata basis in proportion to each party ' s percentage contribution. If the Hansen Line is not built, K&L and Safeway shall not be entitled to any refund of the Four Hundred Thousand Dollars ($400 , 000) advanced to the City for design of the Hansen Line, except to the extent any balance of such amount is held by the City following completion of the Hansen Line or the Alternative Means, or abandonment of construction thereof. (d) Security. In fulfillment of the obligation to contribute their respective percentages of the K&L/Safeway Share as set forth in Paragraph 4 (c) above, K&L and Safeway shall each deliver a letter of credit substantially in the form attached hereto as Exhibit E for the benefit of the City to secure each such party' s payment of its percentage of the K&L/Safeway Share less the Credit. Such letters of credit shall be in a form acceptable to the City and shall be delivered on or before the date (the "Delivery Date") that K&L or Safeway first receives Sewage Services through the Corral Hollow Line. Such letters of credit shall be maintained or renewed by K&L and Safeway for a period of seven (7) years from the Delivery Date. All draws against the letters of credit shall ':)e made pro rata against both letters of credit in amounts corresponding to the K&L Percentage and the Safeway Percentage. The City shall draw upon the letters of credit only if: (i) K&L and/or Safeway have failed, within fifteen (15) days of the City' s written request therefor, to deposit with the City funds in the amount of their respective percentages of the K&L/Safeway Share less the Credit, and (ii) the City intends to award the contract for construction of the Hansen Line (or the Alternative Means) within fifteen (15) days of such draw. In the event the contract for construction of the Hansen Lane (or the Alternative Means) is not awarded within thirty (30) days of any draw on the letters of credit, all funds drawn against the letters of credit shall be refunded to K&L and Safeway at such time as the letters of credit are reinstated by K&L or Safeway, provided, however, that either K&L or Safeway shall at any time have the option to place its respective contribution in an account in the name of the City with interest accruing for the benefit of K&L or Safeway, as the case may be. The immediately preceding provisions shall not apply to a draw resulting from failure to renew or extend a letter of credit in accordance with the requirements of this Agreement, in which case the latest date which the City shall be entitled to hold any funds so drawn without commencing construction of the Hansen Line or the Alternative Means shall be the date (the "Outside Date") which is seven (7) years from delivery of the letters of credit. The City shall promptly refund to K&L and Safeway the remaining balance of the amounts drawn against the letters of credit or placed in the account (s) described above, if any, upon the earlier of the completion of the Hansen Line or the Outside Date (unless the City is constructing the Hansen Line or the Alternative Means on such date, in which case the City may retain sb\mhw\watersup.agr 8