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HomeMy WebLinkAboutContracts & Agreements_80-2014_CCv0001.pdf ESCROW AGREEMENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION This escrow agreement for security deposits in lieu of retention ("Agreement'`) is made and entered into this 20"day of May, 2014, by and among the City of Redlands, whose address is Post Office Box 3005, Redlands, CA 92373 ("Owner"), MCC Equipment Rentals Inc. whose address is Post Office Box 1730, Yucaipa, CA 92399 ("Contractor"), and US Bank whose address is 633 West Fifth Street, 30'h floor, Los Angeles, CA 90071 ("Escrow Agent"). WHEREAS, the Owner and Contractor desire to establish an escrow account with Escrow Agent (the "Escrow Account") pursuant to Section 22300 of the California Public Contract Code; NOW THEREFORE, for the consideration hereinafter set forth, the Owner,Contractor, and Escrow Agent agree as follows: I, Pursuant to Section 22300 of the California Public Contract Code,Contractor has the option to deposit securities with Escrow Agent as a substitute for retention earnings required to be withheld by Owner pursuant to the Construction Contract entered into between Owner and Contractor dated April 2, 2014, for Owner's 2013 CIP Water Pipeline Replacement Project, Phase 2,Project No. 71251 in the amount of$2,680,366.76 ("Contract"). Alternatively, on written request of Contractor, Owner shall make payments of the retention earnings directly to the Escrow Agent. When Contractor deposits the securities as a substitute for Contract earnings, the Escrow Agent shall notify Owner within 10 days of the deposit. The market value of the securities at the time of the substitution shall be at least equal to the cash amount then required to be withheld as retention under the terms of the Contract between Owner and Contractor. Securities shall be held in the name of City of Redlands, and shall designate Contractor as the beneficial owner. 2. Owner shall make progress payments to Contractor for those funds which otherwise would be withheld from progress payments pursuant to the Contract provisions, provided that Escrow Agent holds securities in the form and amount specified above. 3. When Owner makes payment of retentions earned directly to Escrow Agent. Escrow Agent shall hold the for the benefit of Contractor until the time that the escrow created under this Agreement is terininated. 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 shall be equally applicable and binding when Owner pays Escrow Agent directly. 4. Contractor shall be responsible for paying all fees for the expenses incurred by Escrow Agent in administering the Escrow Accourn and all expenses of Owner. These expenses and payment terms shall be determined by Owner, Contractor, and Escrow Agent. 5. The interest earned on the securities or the money market accounts held in the Escrow Account and all interest earned on the,interest shall be for the sole account of Contractor - I - Escrow Agreement for 2013 CIP Water Pipeline Replacement Project,Phase 2,Project No.71251 Page-2-of 3 and shall be subject to withdrawal by Contractor at any time and from time to time without notice to Owner. 6. Contractor shall have the right to withdraw all or any part of the principal in the Escrow Account only by written notice to Escrow Agent accompanied by written authorization from Owner to Escrow Agent that Owner consents to the withdrawal of the amount sought to be withdrawn by Contractor. 7. Owner shall have a right to draw upon the securities in the event of default by Contractor. Upon seven days' written notice to Escrow Agent from Owner of the default, Escrow Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by Owner. 8. Upon receipt of written notification from Owner certifying that the Contract is final and complete, and that Contractor has complied with all requirements and procedures applicable to the Contract, Escrow Agent shall release to Contractor all securities and interest on deposit less escrow fees and charges of the Escrow Account. The Escrow Account shall be closed immediately upon disbursement of all moneys and securities on deposit and payments of fees and charges. 9. Escrow Agent shall rely on the written notifications from Owner and Contractor pursuant to Sections 5 to 8, inclusive, of this Agreement and Owner and Contractor shall hold Escrow Agent harmless from Escrow Agent's release and disbursement of the securities and interest as set forth above. 10. The names of the persons who are authorized to give written notice or to receive written notice on behalf of Owner and on behalf of Contractor in connection with the foregoing,and exemplars of their respective signatures are as follows: On behalf of Owner: On behalf of Contractor: City of Redlands MCC Equipment Rentals Inc. Title: Finance Director Title: President Name: Tina T. Kundig Name: Ken Munoz Address: Post Office Box 3005 Address, Post Office Box 1730 Redlands,CA 92373 Yucaipa, CA 92399 On behalf of Escrow Agent: US Bank Title: Relationship Manager-Deposit&Payment Solutions Name: Dorothy N. Kimura Address: 633 West Fifth Street, 3e floor Los Angeles,CA 90071 -2 - H:,N4yDtxumen&-PROJECTSkAgrements'liscrow Agreements\NICO-MCC Equipment Rentals 201-33 Phase 2 C Escrow Agreement(from Dan),doc Escrow Agreement for 2013 CIP Water Pipeline Replacement Project,Phase 2,Project No,71251 Page-3 -of 3 At the time the Escrow Account is opened, Owner and Contractor shall deliver to Escrow Agent a fully executed counterpart of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the date first set forth above. OWNER: CONTRACTOR: City of Redlands MCC Equipment Rentals Inc. Signature. Signature: Pete Aguilar, Mayor Ken Ifnoz,President ESCROW AGENT Attest: US Bank Sig-nature:_ZA Signature: Sam •in, ity Clerk Dorothy N. Kimura, Relationship Manager- Deposit&Payment Solutions - 3 - ILMy Druin ents'vPROJECTS,,kgreenients'll-scrcw Rentals 2013 Phase'-)CIP Escrow Agreement(from Dan).doc