CONCESSION AGREEMENT for the PRESIDIO PARKWAY PROJECT

16.3.2.1 Be a direct pay, standby letter of credit;16.3.2.2 Be issued by a financial institution in the form of Appendix14 and acceptable to the Department’s Chief Financial Officer. If the bank issuing theletter of credit fails to maintain an unsecured long-term debt rating of at least [“A”] fromone of the major national rating agencies, Developer shall provide a substitute letter ofcredit issued by a qualified financial institution within [30] days of the date that the priorfinancial institution failed to maintain compliance with the requirements of this Section16.3 or otherwise furnish additional security acceptable to the Department’s ChiefFinancial Officer as may be required from time to time to protect the interests of theDepartment;16.3.2.3 Be consistent with the requirements of this Section 16.3;16.3.2.4 Be payable immediately, conditioned only on writtenpresentment from the Department to the issuer of a sight draft drawn on the letter ofcredit and a certificate stating that the Department has the right to draw under the letterof credit in the amount of the sight draft, up to the amount due to the Department,without requirement to present the original letter of credit;16.3.2.5 Be in place for the entire period of time for which the letterof credit is providing security. Letters of credit with an expiration date shall provide forautomatic renewal no later than [30] days prior to the expiration date;16.3.2.6 Allow for multiple draws; and16.3.2.7 Name the Department as payee. The letter of credit shallnot provide for dual or multiple beneficiaries.16.3.3 The Department shall have the right to draw on the letter of credit, without priornotice unless otherwise expressly provided in the Contract Documents with respect to the letterof credit, and use and apply the proceeds as provided in the Contract Documents for such letterof credit, if (a) Developer has failed to pay or perform when due the duty, obligation or liabilityunder the Contract Documents for which the letter of credit is held or (b) Developer for anyreason fails to deliver to the Department a new or replacement letter of credit, on the sameterms, by not later than [14] days before such expiration date, unless the applicable terms of theContract Documents expressly require no further letter of credit with respect to the duty,obligation or liability in question. For all draws conditioned on prior written notice from theDepartment to Developer, no such notice shall be required if it would preclude draw before theexpiration date of the letter of credit. Draw on the letter of credit shall not be conditioned onprior resort to any other security of Developer.16.3.4 Developer’s sole remedy in connection with the improper presentment orpayment of sight drafts drawn under letters of credit shall be to obtain from the Department arefund of the proceeds which are misapplied and the reasonable costs Developer incurs as aresult of such misapplication; provided that at the time of such refund Developer increases theamount of the letter of credit to the amount (if any) then required under applicable provisions ofthis Agreement. Developer acknowledges that the presentment of sight drafts drawn upon aletter of credit could not under any circumstances cause Developer injury that could not beremedied by an award of money damages, and that the recovery of money damages would bean adequate remedy. Accordingly, Developer covenants (a) not to request or instruct the issuerCALIFORNIA DEPARTMENT OF TRANSPORTATION - 82 - DraftPresidio Parkway ProjectCONCESSION AGREEMENTContract # [XXXXXX]Financial Management # [XXXXXXXXXX]