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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 Page 1 of 4 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: Page 2 of 4 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. Page 3 of 4 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 Page 4 of 4