CONTRACT 6864A AmendmentAgreement No, m-6 8 6.....4.......
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CONTRACT FOR SI+:CURITY DEPOSITS IN LIEU OF RETENTION
[PURSUANT TO PUBLIC CONTRACTS CODE § 223001
This AGREEMENT is entered into this 8"' day of May, 2024, by and between the CITY
OF EI, SLGUNDO, a California general law city and municipal corporation ("CITY"), MORILLO
CONSTRUCTION, INC., a California corporation ("CONTRACTOR"), and AMERICAN
BUSINESS BANK, a California state -chartered bank ("AGENT').
1. RECITALS. This Agreement is made with reference to the following facts and objectives:
A. On or about March 6, 2024, CITY and CONTRACTOR entered into a public works
contract (Specifications No. PW 24-02) for the Urho Saari Swim Stadium / Plunge
Renovation Project ("Contract").
I3. 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. IDcposit 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, AG1Nl' 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 Six
hundred forty-nine Thousand lour IIundred ($649,400.00). Securities will be held
in the name of the City of E1 Segundo, and will designate the CONTRACTOR as
the beneficial owner of such securities; or
13. 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 AG1Nf, AGENT will hold them for the benefit of CONTRACTOR
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until the time that the escrow created under this Agreement is terminated. CONTRACTOR may
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
AGI ,NT.
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 CTTY to AGENT that CITY consents to the withdrawal of the
amount sought to be withdrawn by CONTRACTOR.
S. 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
CTTY, and not earlier than the first working day following 35 days after the Notice of Completion
was recorded, AGE'N'I' 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 AGrENT; IIOLD 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:
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686
For CITY: Elias Sassoon, Director of Public Works
City of El Segundo
350 Main Street
El Segundo, CA 90245
c <1s C or i @sa 't 1.o
310-524-2356
For CONTRACTOR: Pierre B. Morillo, Vice President
Morillo Construction, Inc.
227 N. Holliston Avenue
Pasadena, CA 91106
is 71(i), 11-10ri4loconstructIoil .coIn
626-796-3800
For AGENT: Elainc Lopez, F VP, Client Experience Administrator
American Business Bank
400 S. TIope Street, Suite 300
Los Angeles, CA 90071
�'1c:
213-430-5121
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. AUTIIORITY/MODIFICA T ION. 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. CI'I'Y's
city manager, or designee, may execute any such amendment on behalf of CITY.
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16. COUNTERPARTS; ACCEPTANCE OF ELECTRONIC SIGNATURES. This
Agreement may be executed by the Parties on any number of separate counterparts, and all such
counterparts so executed constitute one Agreement binding on all the Parties notwithstanding that
all the Parties are not signatories to the same counterpart. In accordance with Government Code 5
16.5, the Parties agree that this Agreement will be considered signed when the signature of a party
is delivered by electronic transmission. Such electronic 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.
18. SIGNATURE AUTHORITY. Each party warrants that its signatory (or signatories, as
applicable) to this Agreement has the legal authority to enter this Agreement and bind it
accordingly.
ISIGNATURI S ON FOLLOWING PAGE I
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IN WITNESS WIIERIOla the parties hereto have executed this contract the day and year
first hereinabove written.
CITY Ol,' L'L SEGUNDO, MORILLO CONSTRUCTION, INC.
a municipal corpona6 in.
Darrell Gc
orge, City Managcr Namc. l ierori re B, Mto
Title: Vice President
Taxpayer ID No. i 7
AME, CAN I t�MNI"'SS 13ANK
awa
Lopez
Title: FVP, Client 1;xpericnce Administrator
"Taxpayer II) No. 91..-.,1�9072.2.0...__... � ......�..............��....-
AMEIUCAN WiSINESS BANK
SIGNATURE GUARANTEE
For �,2Z
By
w Name _ .r'
City Clerk
APPROVED AS TO FORM:
MARK D. IIENSLEY, City Attorney
13Y. Joaquin Vazquez,
Assistant City Attorney
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