08 Plat approval, variance, easement acceptance and subdivision improvements

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is not unreasonably withheld, then the City shall be entitled to immediately draw down the proceeds of the original Letter of Credit (or previously reduced Letter of Credit). This provision shall not be construed to require that the City accept the new Letter of Credit if Developer is in default and the City has elected to draw down from the proceeds of the original Letter of Credit (or previously reduced Letter of Credit). (b) Within ten (10) days following the City's issuance of written acceptance of the Public Improvements, the Developer shall deliver to the City another Letter of Credit equal in amount to fifteen percent (15%) of the original Letter of Credit, unless the City Attorney or his/her designee approves in writing changes to this Letter of Credit, which approval is not unreasonably withheld. This Letter of Credit shall be for a period of one (1) year and shall be security to insure against defects during the warranty period specified in Article II of this Agreement. However, if this Letter of Credit is not delivered to the City at least thirty (30) days before the expiration of the original Letter of Credit (or the additional new Letter of Credit as described above), then the City shall be entitled to draw down on fifteen percent (15%) of the proceeds of such existing Letter of Credit. The letter of credit shall be held by the City and used as security against defects during the warranty period. In lieu of the Letter of Credit provided for in this subparagraph (b), the City Engineer may accept a Maintenance Bond as provided for in subparagraph (d) of this Section 3.02. (c) From time to time as portions of the Public Improvements are completed in accordance with the Standard Specifications and the Engineering Plans, the Developer may make application to the City Engineer to reduce the amount of the original Letter of Credit or Cash Escrow. If the City Engineer is satisfied that such portion of the completed Public Improvements has been substantially completed in accordance with the Standard Specifications and Engineering Plans, he/she may (but is not required to) cause the amount of the Letter of Credit or Cash Escrow to be reduced by such amount that he/she in his/her reasonable discretion deems is appropriate so that the remaining amount of the Letter of Credit or Cash Escrow adequately ensures the completion of the remaining Public Improvements. If the City Engineer has approved the reduction and the issuing bank will not reduce the Letter of Credit without issuing a new Letter of Credit, the City will accept a new Letter of Credit for such reduced amount, if it substantially conforms with the provisions of this Article III. The decision of the City Engineer to reduce the amount of the Letter of Credit or Cash Escrow shall in no way be construed as an acceptance by the City of the completed Public Improvements. (d) When Cash Escrow is used as the security, all accrued interest shall become a part of the Cash Escrow and shall be used as security for the completion of the Public Improvements. The term "Cash Escrow" used in this Agreement includes accrued interest. After final acceptance of the Public Improvements by the City, the Cash Escrow shall be reduced to fifteen percent (15%) of the original Cash Escrow amount. The remaining fifteen percent (15%) Cash Escrow shall be retained by City for a period of one (1) year after acceptance of the Public Improvements as security to SUBDIVISION IMPROVEMENT AGREEMENT PAGE 5 45 K.