CONTRACT 5162E Other CLOSEDEscrow No.: 2420 Account No.: 14- 916670
Agreement No. 5162E
CONTRACT FOR SECURITY DEPOSITS IN LIEU OF RETENTION
[PURSUANT TO PUBLIC CONTRACTS CODE § 223001
This AGREEMENT is entered into this 27th day of September, 2016, by and between the
CITY OF EL SEGUNDO, a general law city and municipal corporation ( "CITY "), Sialic
Contractors Corp. dba Shawnan ( "CONTRACTOR "), and Community Bank ( "AGENT ").
1. RECITALS. This Agreement is made with reference to the following facts and objectives:
A. On or about August 23, 2016, CITY and CONTRACTOR entered into a public
works contract (Specifications No. PW 16 -10) for Imperial Highway Overlay
Project ( "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 Two Thousand, One Hundred Twenty Seven Dollars and Twenty Five
Cents ($42,127.25). 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
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5162E
CONTRACTOR 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 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:
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5162E
For CITY: Stephanie Katsouleas, Director of Public Works
350 Main Street
E1 Segundo, CA 90245
Facsimile: (310) 640 -0489
For CONTRACTOR: Shawn A. Smith, President
Sialic Contractors Corp. dba Shawnan
12240 Woodruff Ave.
Downey, CA 90241
Facsimile: (562) 803 -9955
For AGENT: Brian Sinclair — Escrow # 2420
Community Bank
460 Sierra Madre Villa Ave.
Pasadena, CA 91107
Facsimile: (626) 568 -2115
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.
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5162E
17. TIME IS OF ESSENCE. Time is of the essence for each and every provision of this
Agreement.
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.
CITY O " EL SEGUNDO,
a mu ipal c oration, „
rpent9f, City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorney
..... _ ....... w U,
BY: David II Kik,
Assistant .N,ty Attorney
SIALIC CONTI' S CORP. DBA,
SHAWNAN
w�Ik, President
COMMUNITY BANK
7—F scrow # e...........�..
2420
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