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HomeMy WebLinkAboutThibodo Construction; 1984-04-27;ESCROW AGREEMENT SUBSTITUTION OF SECURITIES FOR FUNDS WITHHELD . THIS ESCROW AGREEMENT is made and entered into by and between the COSTA REAL MUNICIPAL WATER DISTRICT, hereinafter referred to as "District ,I' THIBODO CONSTRUCTION CO. -4 9 hereinafter referred to as "Contractor ,I' and BANK OF AMERICA NATIONAL TRUST AND S'AVINGS ASSOCIATION, a National Banking Assn. as "Escrow Agent." District and Contractor have entered into a contract dated April 27 '- 1984 , for the construction of: LA COSTA HI RESERVOIR (t he "Co nt r ac t . I' ) Under Article C-lO(h) of the General Provisions of the. Contract, Contractor desires to substitute securities ("Securities") for moneys withheld or to be - withheld under Article C-lO(d) of such General Provisions. District, Contractor 'and Escrow Agent, for the consideration named hereinafter, agree as foll ows: I. Deposit of Securities and Release of Withheld Funds (1) An escrow shall be established upon execution hereof ("Escrow'), with reference to the Securities substituted by Contractor pursuant to this -1- Escrow Agreement Agreement. Escrow Agent. The term "Securities" includes singular and plural. Contractor shall open such Escrow by depositing the Securities with (2) The Securities delivered to Escrow Agent by Contractor shall be securities approved by District and (a) eligible for investment 1 as listed in California Government Code Section 16430 or (b) certificates of deposit issued by banks or savings and loan associations, which are authorized to transact business in California and are members of Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance "Corporation (FSL IC), respectively . i Non-negotiable certificates of deposit shall be made payable to the order of Escrow Agent as Trustee under this Escrow Agreement. Any' certificates of deposit del ivered to Escrow Agent hereunder shall be accompanied by evidence satisfactory to Escrow Agent and District that the issuing bank will honor any request for redemption prior to maturity and that such redemption will be accompanied in a manner that payment will be made to Escrow Agent without any rights of third parties being permitted to intervene. (3) Contractor shall maintain on deposit at all. times, prior to termination of the Escrow created by this Agreement, Securities as specified in Section (2) hereof, having a combined present market value of not less than the amount to be paid to Contractor under the terms of this Agreement, including additional amounts for extra work. District shall release withheld funds only to the extent Securities of value equivalent to the amounts released are then on deposit, and to the extent of any shortfall, shall resume withholding until additional Securities are deposited with Escrow Agent. If at any time Escrow Agent determines that the value of the Securities on deposit has diminished to an amount lower than sums which have been released, Escrow Agent shall -2- Escrow Agreement immediately require Contractor to deposit additional Securities to increase the combined value to an amount equal, in Escrow Agent's opinion, to funds that have been released. Contractor agrees to comply with such demands. (4) Upon receipt of notice from Escrow Agent that the Securities have been deposited by Contractor with Escrow :Agent, District shall then release to Contractor, subject to Sectio? 3, any sums previously withheld, and at the . time of each progress payment, shall release to Contractor funds equivalent to -4 the amount which would otherwise have been withheld therefrom, until the total of funds released equals the value as established by Escrow Agent of the Securities then on deposit. 11. Contractor's Expenses and Duties (5) Contractor agrees to pay all charges made by Escrow Agent for services rendered by it as such Escrow Agent, including, but not limited to, service fees and out-of-pocket expenses, and agrees to bear any penalty incurred in the sale or conversion of Securities under Article IV hereof. (6) Contractor agrees to pay all charges made by District for services performed by it to effect this Agreement, including, but not -limited to, start-up charges and monthly transaction charges. (7) Contractor agrees to deposit with Escrow Agent, concurrently with the deposit of each of the Securities, such documents as are, in the opinion of Escrow Agent, necessary to enable Escrow Agent to sell or redeem deposited Securities. Contractor agrees to promptly deposit with Escrow Agent -3- Escrow Agreement further or supplemental documents for such purpose if and when determined necessary by Escrow Agent. (8) Contractor agrees to pay any and all costs incurred by District or Escrow Agent, including, but not limited to, reasonable attorneys' fees, in any legal or arbitration proceedings challengihg the right of District or Escrow Agent to possess or dispose of Securities. (9) Contractor agrees that District may direct Escrow Agent to .4 sell or redeem Securities deposited with Escrow Agent under the terms of this Agreement as may be necessary under Article IV hereof. agrees that District.may, at its sole option, deduct the amount of any such charges payable to District hereunder from amounts to be released by District into the Escrow. In addition, Contractor 111. Escrow Aaent (10) Escrow Agent agrees to hold the Securities in trust for the benefit of District until such time as the Escrow created hereunder is terminated by District. alteration or addition to the terms of the Contract, the plans and specifications, or to the work to be performed thereunder. Escrow shall not be affected by any change, extension of time, (11) Escrow Agent agrees to obtain from Contractor such documents as are, in the opinion of Escrow Agent, necessary to enable Escrow Agent to sell or redeem the Securities deposited hereunder. (12) Escrow Agent agrees to review the market value of Securities held in said Escrow monthly as of the close of business on the first banking -4- Escrow Agreement . I. i day of each month and promptly notify the Contractor to post additional Securities and to notify the District whenever said market value is less than the retention value under the Contract. (13) Escrow Agent agrees to make no charge to District for. any services or out-of-pocket expenses incurred in carrying out its duties and obligations under this Agreement. (14) Escrow Agent agrees that it.holds said Securities as Trustee for District, as security for payment of moneys which would otherwise be held by District pursuant to the requirements of the Contract and that the rights of District to said Securities are superior to any lien (or claim of lien) which Escrow Agent claims or may in the future claim against said Securities. IV. Application of Securities (15) District may, at any time, demand that Escrow agent sell, redeem or otherwise convert to cash the Securities or such portions thereof as, in District's discretion, may be necessary to cover any of the purposes set forth in the Contract relative to fulfillment of the Contract, correction of work or payment of stop notice claims and other claims, expenses, deductions and forfeitures, including, but not limited to, the purposes described in Articles C-6(j), C-7(b), C-9(e), C-9(g) and C-lO(c) of the General Provisions of the Contract, and may direct Escrow Agent to apply the proceeds thereof to such purposes in the manner permitted in the applicable article(s) of the Contract and provisions of law; provided, however, that Contractor shall be given not less than two (2) working days' written notice by District of its intent to make such demand upon Escrow Agent, and within said two (2) working -5- Escrow Agreement .- days, Contractor may deliver to Escrow Agent, in cash, the demanded amount, which District shall first utilize prior to directing the sale, redemption or conversion of any of the Securities. (16) Escrow Agent agrees to promptly, but in any event within no more than two (2) banking days following receipt of notice from District to do so, sell, redeem or convert to cash the Securities or sufficient portions thereof and to hold proceeds of such sale, redemption or conversion for disbursement at the direction of District, pursuant to Section 16 hereof. -4 Any proceeds remaining after such disbursement shall continue to be held by Escrow to Agent and may be converted by Escrow Agent, Securities of equivalent or better value. as it shall determine, back (17) District shall include in ny written demand made to E crow Agent under Section 16 a statement of the purpose for which the demanded amount is to be used, but Escrow Agent shall have no duty to ascertain the validity or sufficiency of said purpose or consistency thereof with the Contract, nor except as hereinafter provided, the correctness of the amount demanded, and District and Contractor specifically relieve Escrow Agent from any li-ability therefor. Escrow Agent is also relieved by District and Contractor from any duty to ascertain whether District has given notice and opportunity to Contractor to provide cash to District under said Section 16, but District shall advise Escrow Agent of the giving of said notice at the time of making demand as provided therein. loss or forfeiture of interest which might be sustained by reason of the Securities being liquidated prior to maturity. Neither Escrow Agent nor District shall be liable for any -6- Escrow Agreement (18) The foregoing notwithstanding, District shall not demand, and Escrow Agent shall not pay to District or its order, any amount in excess of the amount which District would be entitled to have withheld, up to the date of said demand, from sums due Contractor as security for performance as provided in the Contract, but has instead been paid to Escrow Agent for Contractor under . this Agreement. V. Miscellaneous (19) Escrow Agent shall roll over the Securities at any maturity date(s) that occur prior to close of Escrow, and/or shall take all other such steps as are prudent-and necessary to maintain and preserve the value of the Securities until the close of Escrow. Escrow Agent shall mail to District and Contractor on the twenty-fifth (25th) day of each month during the Escrow, or if the twenty-fifth (25th) falls on a holiday or weekend, the next banking day, a statement of the total amount of the Securities and/or funds held in this Escrow on the date of such statement. Securities shall be selected in accordance with the escrow instructions of the Escrow Agent in this transaction. The person named herein may also give instructions as to the order in which Securities should be converted in the event of a conversion under Article IV, but in the absence of such instructions, Escrow Agent shall make such determination in its discretion. (20) It is agreed that neither District nor Escrow Agent shall in any case or event be liable for the failure of any of the conditions of this Escrow or damage caused by the exercise of Escrow Agent's discretion in any particular manner, or for any other reason, except their respective gross -7- Escrow Agreement negligence or willful misconduct with reference to the said Escrow. IT IS UNDERSTOOD that fees and usual charges agreed upon for Escrow Agent's services hereunder shall be considered compensation for its ordinary services as contemplated by these instructions, and in the event that it renders any service hereunder not provided for in the preceding i nstructi ons, or that there is any assignment of any interest in the subject matter of this Escrow, or that any controversy irises hereunder, or that Escrow Agent is made . a party to, or intervenes in, any litigation pertaining to this Escrow or the subject matter thereof, Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses occasioned by -4 such def aul t , controversy or 1 it i gati on, the Contractor hereby promi si ng to pay such sums upon demand. Any sums paid hereunder to Escrow Agent are the responsibility of Contractor and are not chargeable against moneys or the Securities on deposit in Escrow. (21) The Contractor shall be the beneficial owner of the Securities and shall receive any interest thereon. No Securities deposited with Escrow Agent pursuant to this Escrow Agreement shall be deposited or pledged by I Contractor to any other person or for any other purpose or obligation-until such Securities are released to Contractor under the terms hereof. (22) This Escrow shall terminate and Escrow Agent shall return to Contractor all Securities held in its custody promptly upon receipt of written notice from District that said Securities may be released. The determination that all work has been completed and all claims have been resolved will be at the sole discretion of District. District agrees to provide such notice promptly upon its determination that the period for making final payment under Article -8- Escrow Agreement .V . 'I C-lO(f) of the General Provisions of the Contract has concluded and all claims have been resolved. (23) Any notices, instruments or payments permitted or required to . .. be given hereunder shall be deemed received upon personal del ivery or twenty-four (24) hours after depositing the. same in the U.S. Mail , postage prepaid, registered or certified, addressed to the party for whom intended, as follows: DISTRICT: CONTRACTOR: Costa'.Real Municipal Water District 5950 El Camino Real Carlsbad, CA 92008 Thibodo Construction Co. 960 Quails Trail Vista, California 92083 (619) 727-3111 ESCROW AGENT: Bank of America NT &.SA 220 S. Escondido Blvd. P.O. Box 967 Escondido, California 92025 (619) 489-2129 (24) Except as otherwise specifically provided in this Agreement, in the event of any declaratory or other legal or equitable action instituted between or among any of the parties hereto in connection with this Escrow Agreement, the prevailing party shall be entitled to recover from the losing 7 party all of its costs and expenses, including court costs and reasonable attorneys ' fees. (25) This Escrow Agreement shall be governed by all the tekms, definitions and provisions of the Contract, which are made a part hereof as though fully set forth herein. The provisions hereof shall not in any way add to, limit or negate any of District's rights under the Contract to withhold and make application of amounts due the contractor. -9- Escrow Agreement c IN WITNESS WHEREOF, four (4) counterparts of this Escrow Agreement, each of which shall for all purposes be deemed an original hereof, have been duly executed by the parties on the date first hereinabove written. . . (ATTACH ACKNOWLEDGEMENTS) YONTRACTOR~I THIBODO CONSTRUCTION CO. I r" /; (Contractor: P1 ease complete &&e / #H 3- hfi+ -i blanks in Section 23.) v .'- / 'I E S C ROW AGENT It (Escrow Agent: blanks in Section 23.) P1 ease compl ete Approved as to Form 0 I'D I S TR I C T I' COSTA REAL MUNICIPAL WATER DISTRICT && 1 for District - 10 - Escrow Ag reement , .. t c c ]ss. San Diego 1 STATE OF CALIFORNIA COUNTY OF '-f On- March 29, 1985 , before me, the undersigned, a Notary Public in and for and aJ , .I- -c - said Slate, personally appeared 1 L Thi bode n/a .personally known to me (or proved to me on the u ___ E" I ibodo Construction zg 2 basis of satisfactory evidence) lo be the persons who execuled the within instrument as SI X President and n/a Secretary, on behalf of Th LiE - 0 "> -0 Co., Inc. -_ ON o UI I the corporalion therein named, and acknowledged to me that suchcorporationexeculed thewithininstrument pursuant toits by-laws or n resolution of ils board of directors. a5 0,s - .. XJ T? 'D, cv Signature N r3 ca 121 Notary Public - Caliiornia 4. .. (This area for official notarial seal) 1.