CONTRACT 6124 Other CLOSEDAgreement No. 6124
6741109474
Agreement No. 2700
CONTRACT FOR SECURITY DEPOSITS IN LIEU OF RETENTION
[PURSUANT TO PUBLIC CONTRACTS CODE § 223001
This AGREEMENT is entered into this 3rd day of June, 2021, by and between the CITY
OF EL SEGUNDO, a general law city and municipal corporation ("CITY"), ALL AMERICAN
ASPHALT ("CONTRACTOR"), and CITIZENS BUSINESS BANK ("AGENT").
1. RECITALS. This Agreement is made with reference to the following facts and objectives:
A. On or about March 3, 2021, CITY and CONTRACTOR entered into a public works
contract (Specifications No. PW 21-01) for FY 20/21 Pavement Rehabilitation
("Contract").
B. The Contract allows CITY to withhold a portion of the monies due to
CONTRACTOR to help ensure CONTRACTOR's performance of the Contract.
C. The Contract, in accordance with Public Contracts Code ("PCC") § 22300, allows
CONTRACTOR to substitute securities for the retention amount or establish an
escrow account for monies withheld by CITY.
2. SECURITY DEPOSITS IN LIEU OF RETENTION. In accordance with PCC § 22300,
CONTRACTOR may
A. Deposit securities with AGENT as a substitute for retention earnings required to be
withheld by CITY pursuant to the Contract. When CONTRACTOR deposits the
securities as a substitute for Contract earnings, AGENT will notify CITY within
ten (10) days of the deposit. The market value of the securities at the time of the
substitution will be at least equal to the cash amount then required to be withheld
as retention under the terms of the Contract. Such amount is calculated to be Forty -
Four Thousand Six Hundred ($44,600). Securities will be held in the name of the
City of El Segundo, and will designate the CONTRACTOR as the beneficial owner
of such securities; or
B. Upon written notice, request CITY to make payments of the retention earnings
directly to AGENT.
3. PROGRESS PAYMENTS; SECURITIES. CITY will make progress payments to
CONTRACTOR for those funds which otherwise would be withheld from progress payments
pursuant to the Contract provisions, provided that the AGENT holds securities in the form and
amount specified above.
4. RETENTION EARNINGS; ESCROW ACCOUNT. When CITY makes payment of
retention earnings directly to AGENT, AGENT will hold them for the benefit of CONTRACTOR
until the time that the escrow created under this Agreement is terminated. CONTRACTOR may
Page 1 of 4
Agreement No. 6124
direct the investment of the payments into securities. All terms and conditions of this agreement
and the rights and responsibilities of the parties will be equally applicable and binding when CITY
pays AGENT directly.
5. CONTRACTOR'S EXPENSE. CONTRACTOR will be responsible for paying all fees for
the expenses incurred by AGENT in administering the Escrow Account and all of CITY's
expenses. These expenses and payment terms will be determined by CITY, CONTRACTOR, and
AGENT.
6. INTEREST; SECURITIES. The interest earned on the securities or the money market
accounts held in escrow and all interest earned on that interest will be for the sole account of
CONTRACTOR and will be subject to withdrawal by CONTRACTOR at any time and from time
to time without notice to CITY.
7. INTEREST; ESCROW ACCOUNT. CONTRACTOR will have the right to withdraw all or
any part of the principal in the Escrow Account only by written notice to AGENT accompanied
by written authorization from CITY to AGENT that CITY consents to the withdrawal of the
amount sought to be withdrawn by CONTRACTOR.
8. DEFAULT BY CONTRACTOR; SECURITIES. CITY will have a right to draw upon the
securities in the event of CONTRACTOR's default of the Contract. Upon seven (7) days' written
notice to AGENT from CITY of the default, AGENT will immediately convert the securities to
cash and will distribute the cash as instructed by CITY.
9. RELEASE OF ESCROW. After receiving a copy of the recorded Notice of Completion from
CITY, and not earlier than the first working day following 35 days after the Notice of Completion
was recorded, AGENT will release to CONTRACTOR all securities and interest on deposit less
escrow fees and charges of the Escrow Account. The escrow will be closed immediately upon
disbursement of all moneys and securities on deposit and payments of fees and charges.
10. NOTIFICATIONS TO AGENT; HOLD HARMLESS. AGENT will rely on the written
notifications from CITY and CONTRACTOR pursuant to this Agreement and CITY and
CONTRACTOR will hold AGENT harmless from AGENT's release and disbursement of the
securities and interest as set forth above.
11. RESPONSIBLE PERSONS. The names of the persons who are authorized to give written
notice or to receive written notice on behalf of CITY and on behalf of CONTRACTOR in
connection with the foregoing, and exemplars of their respective signatures are as follows:
Page 2 of 4
Agreement No. 6124
For CITY: Elias Sassoon, Director of Public Works
City of El Segundo
350 Main Street
El Segundo, CA 90245
For CONTRACTOR: Mark Luer, President
All American Asphalt
400 E Sixth St.
Corona, CA 92878
For AGENT: Claudia Cuadra
Citizens Business Bank
505 E Colorado Blvd.
Pasadena, CA 91101
12. INTERPRETATION. This Agreement was drafted in, and will be construed in accordance
with the laws of the State of California, and exclusive venue for any action involving this
agreement will be in Los Angeles County.
13. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the parties.
There are no other understandings, terms or other agreements expressed or implied, oral or written.
This Agreement will bind and inure to the benefit of the parties to this Agreement and any
subsequent successors and assigns.
14. SEVERABILITY. If any portion of this Agreement is declared by a court of competent
jurisdiction to be invalid or unenforceable, then such portion will be deemed modified to the extent
necessary in the opinion of the court to render such portion enforceable and, as so modified, such
portion and the balance of this Agreement will continue in full force and effect.
15. AUTHORITY/MODIFICATION. The Parties represent and warrant that all necessary action
has been taken by the Parties to authorize the undersigned to execute this Agreement and to engage
in the actions described herein. This Agreement may be modified by written amendment. CITY's
city manager, or designee, may execute any such amendment on behalf of CITY.
16. ACCEPTANCE OF FACSIMILE SIGNATURES. The Parties agree that this Agreement,
agreements ancillary to this Agreement, and related documents to be entered into in connection
with this Agreement will be considered signed when the signature of a party is delivered by
facsimile transmission. Such facsimile signature will be treated in all respects as having the same
effect as an original signature.
17. TIME IS OF ESSENCE. Time is of the essence for each and every provision of this
Agreement.
Page 3 of 4
Agreement No. 6124
18. COUNTERPARTS. This Agreement may be executed in any number or counterparts, each
of which will be an original, but all of which together will constitute one instrument executed on
the same date. At the time the Escrow Account is opened, CITY and CONTRACTOR will deliver
to the AGENT a fully executed counterpart of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this contract the day and year
first hereinabove written.
CIF1 OF EL SEGUNDO, ALL AMERICAN ASPHALT
a ar cipal corporatio
...........
o Mit:nick, City Manager Name: Mark A Luer
Title: President
ATTEST:
j"lerk
.__ _.....
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorney
/-?-
BY77 David H. Kir &
Assistant City Attorney
Name:Claud� A Cuadra
TitleVP Specialty Banking Operations Manager
Page 4 of 4