HSR, Inc. - Escrow Agreement
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186~) Suttc...'r Boulevard
\1organllill. C/\ 9:,()37
City Project No. 08-CDD-154
Contractor Project No. 0802
Escrow No. 162205
ESCROW AGREEMENT for SECURITY
DEPOSITS IN LIEU OF RETENTION
This Escrow Agreement is made and entered into as of June 5, 2008 by and between
CITY OF GilROY, whose address is 7351 Rosanna Street, Gilroy, CA 95020,
hereinafter called "City"; and HSR, INC. whose address is 530 Aldo Avenue, Santa
Clara, CA 95054, hereinafter called "Contractor" and HERITAGE BANK OF
COMMERCE, whose address is 18625 Sutter Boulevard, Morgan Hill, CA 95037,
hereinafter called "Escrow Agent".
For the consideration hereinafter set forth, the City, Contractor, and Escrow Agent agree as
follows:
1. Pursuant to Section 22300 of the Public Contract code of the State of California,
Contractor has the option to deposit securities with Escrow Agent as a substitute for
retention earnings required to be withheld by City pursuant to the Construction
Contract entered into between the City of Gilroy and Contractor for the Camino
Arroyo Bridge Project - Phase II in the amount of $4,877,862.00 dated May 1, 2008,
hereinafter referred to as "Contract". Alternatively, on written request of the
Contractor, the City 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 the City 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 the City and Contractor. Securities shall be held in the name of
the City and shall designate the Contractor as the beneficial City.
2. City shall make progress payments to the Contractor for such funds which otherwise
would be withheld from progress payments pursuant to the Contract provisions,
provided that the Escrow Agent holds securities in the form and amount specified
above.
3. When the City makes payment of retention earned directly to Escrow Agent, the
Escrow Agent shall hold them in benefit of the Contractor until such time as the
escrow created hereunder is terminated.
4. The 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 the City pays the Escrow Agent directly.
5. Contractor shall be responsible for paying all fees for the expenses incurred by
Escrow Agent in administering the Escrow Account. These expenses and payment
terms shall be determined by the City, Contractor and Escrow Agent.
6. The interest earned on the securities or the money market accounts held in escrow
and all interest earned on that interest shall be for the sole account of Contractor and
shall be subject to withdrawal by Contractor at any time and from time to time without
notice to the City.
shall be subject to withdrawal by Contractor at any time and from time to time without
notice to the City.
7. 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 City to the Escrow Agent that City consents to the withdrawal of
the amount sought to be withdrawn by Contractor.
8. The City shall have a right to draw upon the securities in the event of default by the
Contractor. Upon seven (7) days' written notice to the Escrow Agent from the City of
the default, the Escrow Agent shall immediately convert the securities to cash and
shall distribute the cash as instructed by City.
9. Upon receipt of written notification from the City certifying that the Contract is final
and complete, and that the Contractor has complied with all requirements and
procedures applicable to the Contract, Escrow Agent shall release to Contractor all
securities and interest on deposits less escrow fees and charges of the Escrow
Agent. The escrow shall be closed immediately upon disbursement of all moneys
and securities on deposit and payments of fees and charges.
10. Escrow Agent shall rely upon the written notification from the City and Contractor
pursuant to Sections (6) to (8) inclusive, of this Agreement and the City and
Contractor shall hold Escrow Agent harmless from Escrow Agent's release and
disbursement of the securities and interest as set forth above.
11. Escrow Agent shall render to each party a monthly statement showing all escrow
account transactions and an account of securities held by it, together with a
description of the investments made and their value including interest or other
income earned and paid.
12 The names of the persons who are authorized to give written notice or to receive
written notice on behalf of the City and on behalf of the Contractor in connection with
the foregoing, and exemplars of their respective signatures are as follows:
On behalf of City:
On behalf of Contractor:
e 12..... " >. "0 IV..) J
Title:
R.oss ~ UDf(.. ~A
Nam~
~
Signature
City Anmini~tr~tor
Title:
am .
Signature
7351 Rosanna Street
Gilroy, CA. 95020
Phone: 4 08 - 8 4 6 - 0 4 5 1
Fax: 408 - 846 - 0429
530 Aldo Avenue
Santa Clara, CA 95054
Phone: 408-562-8956 X 15
Fax: 408-562-9957
2
On Behalf of the Escrow Agent:
Title: Senior Vice President
Name: Chloe A. Flo~~E1 f~~
~.~~ Q '~'/~
Heritage Bank of Commerce
Corporate Escrow Services
18625 Sutter Boulevard
Morgan Hill, CA 95037
408-782-5264
At the time the Escrow Account is opened, the City and Contractor shall deliver to the 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.
City:
City Administrator
Title::
Thomas Haglund
On Behalf of Escrow Agent:
HERITAGE BANK OF COMMERCE
Chloe A. Flowers
Senior Vice President /
c:~ ~~
Chloe A. Flowers
WHEN PREPARING RETENTION CHECKS PLEASE
MAKE CHECKS PAYABLE TO AND MAil AS FOllOWS:
HERITAGE BANK OF COMMERCE
ATTN: Chloe Flowers Escrow 162205
Corporate Escrow Services
18625 Sutter Boulevard
Morgan Hill, CA 95037
3
Contractor:
f a..e.5 '" DE-N -/-
Title:
R D.s ~ 1(, l:::> 0 l2...s A
Name:
~
Signature: