1 A G R E E M E N T
THIS AGREEMENT, dated for purposes of identification only this _____ day
of __________________, 2023, is made and entered into by and between the CITY OF ANAHEIM, a municipal corporation, hereinafter referred to as "ANAHEIM,"
A
N
D
GREAT AMERICAN INSURANCE COMPANY, an Ohio corporation,
hereinafter referred to as "GAIC."
W I T N E S S E T H:
WHEREAS, ANAHEIM entered into a construction contract on March 18, 20 23 ("Original Contract"), with HYM ENGINEERING, INC. ("Contractor"), for construction of the Brookhurst Community – Teen Center Addition (the "Project"); and WHEREAS, GAIC as surety and HYM ENGINEERING, INC., as principal, executed unto ANAHEIM, as obligee, its Performance Bond No. 4054731 dated March 18, 2023 , in connection with said construction contract; and
WHEREAS, HYM ENGINEERING , INC. has defaulted under the terms of said contract, and ANAHEIM has sought performance of the remaining work required under the contract from GAIC, as the surety; and
WHEREAS, GAIC is proceeding to solicit bids or otherwise arrange for completion of said work in accordance with the conditions of said Performance Bond and Project Manual and has advised ANAHEIM with respect thereto without prejudice to any of its rights and without waiver of its defenses in connection therewith; and WHEREAS, this agreement is being made and entered into between ANAHEIM and GAIC pursuant to the applicable Statutes of the State of California and the applicable rules and 2 regulations of the public agency and in accordance with and pursuant to its authority for the purpose of facilitating completion of said work required by said construction contract in accordance with all of the ter ms and conditions thereof, except as previously amended or modified, and upon the express conditions ANAHEIM will immediately pay to GAIC all contract funds now due , if any, but being held by ANAHEIM and that ANAHEIM will pay GAIC, in the manner prescribed in said construction contract as provided hereinafter.
NOW, THEREFORE, in consideration of the mutual covenants and agreements, the parties hereto do contract and agree as follows:
1. GAIC will arrange for completion of the work required by said construction contract in accordance with the terms and conditions of said construction contract, EXCEPT as may have been previously modified by change order and as hereinafter modified and in accordance with its Performance Bond, and ANAHEIM agrees and promises to pay GAIC in the manner provided in said construction contract. GAIC agrees to undertake and complete the Project as described under the scope of the Original Contract work, including any work previously performed or commenced by Contractor. The scope of the Original Contract work is fully described in the plans and speci fications for the Project, which is incorporated herein by this reference and made a part hereof.
2. It is agreed and understood that the completion of the work under said Original Contract shall be performed by a mutually acceptable contractor ("Takeover Contractor").
3. It is understood and agreed that GAIC's Takeover Contractor will proceed as soon after the Effective Date of this Agreement as practicably possible to complete the work under the aforementioned Original Contract, subject to any appropriate extensions of time and other bases for increased performance time resulting from weather conditions, or otherwise as set 3 forth in said contract. GAIC agrees to complete the work under the Original Contract within forty-five (45) calendar days after this Agreement is fully executed or a Notice to Proceed is issued to GAIC, whichever is later.
4. It is understood and agreed that GAIC will immediately be paid all presently due amounts earned under the Original Contract , if any, and now being held by ANAHEIM.
Further, ANAHEIM will pay the Contract Balance, presently being the sum of Eighty-Six Thousand, Seven Hundred Seventy -Six Dollars and No/100 Cents ($86,776.00) , upon the satisfactory completion of the bid items of work as f urther described in the scope of the Original Contract work, together with all additional amounts which may be added by approved change orders to GAIC, subject to the t erms of the Original Contract. Anaheim will waive any claims for liquidated damages through 60 days after the execution of this contract. GAIC will waive any claims it has as to the administration of the contract by ANAHEIM, including the demand for additional stucco work, potential claims for overpayment and failure to inspect.
5. The CITY shall not withhold payment of any amount on account of liens or claims made by subcontractors and suppliers to Contractor for work performed and/or labor furnished prior to the date of termination. Such liens or claims, if any, shall be refer red to GAIC to be handled under the Payment Bond, which shall remain in full force and effect.
6. The CITY agrees that GAIC and its agents and contractors shall have the right to use, without charge, any materials, supplies, equipment, or personal prop erty furnished or supplied to or by Contractor which are stored on the premises of the Project.
7. GAIC, by execution of this Agreement, does not waive, modify or extend the penal limit of the Bonds issued by it. GAIC’s maximum liability under this Agreement and bond is the bond penalty in the amount of $985.435.00. If GAIC expends an amount equal to the bond 4 penalty, it will have no further liability to ANAHEIM with respect to the work per the Original Contract. It is further understood and agreed that GAIC, by entering into this Agreement, is not acting as a contractor but merely in its capacity as performance bond surety; and that no rights under this contract, or otherwise, shall inure to the benefit of any third party except as otherwise expressly provided by law. It is understood that this Agreement is for the sole benefit of and shall inure only to the benefit of ANAHEIM.
8. GAIC hereby designates the Takeover Contractor as its agent for purposes of completion of the work on this project, the pro cessing of change orders or extra work orders and other negotiations in connection with the completion of the work and presentation of actual quantities for purposes of payment to GAIC on the various bases set forth in the underlying construction contract.
9. ANAHEIM estimates that the unpaid balance of said Original Contract is in the present amount of $86,776.00. ANAHEIM will pay GAIC in accordance with the terms of the construction contract EXCEPT as modified herein. ANAHEIM shall not withhold payment for any of the following reasons:
a. Claims, suits, liens, or demands Original Contractor or its legal representatives, successors, assigns, or creditors, including claims from the Internal Revenue Service, and related penalties and interest; and
b. Claims, suits, liens, or demands by any persons or entity furnishing labor, equipment, or material Original
Contractor or an y of its original subcontractors on the Project.
5 10. To the extent of amounts paid to it hereunder, plus any penalties and interest adjudged against ANAHEIM in favor of the Internal Revenue Service , Department of Labor, Department of Industrial Relations, or any other governmental agency, for wrongful payment of funds hereunder, GAIC will indemnify and hold harmless ANAHEIM from all claims for which ANAHEIM agrees not to withhold payment, as described above.
11. GAIC will undertake to be responsible for any valid warranty items which may appear in connection with the construction work in accordance with the terms and conditions of the original or underlying construction contract.
12. GAIC shall remain liable under its payment bond to all subcontractors and material suppliers to Contractor and Takeover Contractor in connection with the Original Contract, its bond, and applicable law, to satisfactory completion of the Original Contract. GAIC will expend such of its own funds as may from time to time be necessary to pay valid labor and material claims in pursuit of the completion of said Original Contract, and any warranty items as described above; provided, however, that GAIC's obligations shall extend to the satisfactory completion of all Project-related activities.
13. The parties shall mutually cooperate to ensure smooth transition in and performance of the work to complete the Project in accordance with the Original Contract
14. This Agreement shall not be deemed or construed to be an admission or concession of liability by GAIC or the CITY. Nothing in this Agreement shall be deemed to be a waiver of any claims, rights or defenses that have been or may be asserted by the CITY or the GAIC in any litigation.
15. If requested, the CITY will make available for copying and inspection by GAIC or its Takeover Contractor; (i) all contract data in its possession that the CITY is required to 6 provide by the terms of the contract; and (ii) a complete set of all shop drawings, plans, specifications, and material submissions previously received by the C ITY and/or the designated architects, engineers or agents.
16. Any notices which are required to be given by the terms of this Agreement or the Bonds shall be made as follows:
To CITY:
City of Anaheim
City Clerk
200 S. Anaheim Blvd, 2nd Floor
Anaheim, CA 92805
With a Copy To:
City of Anaheim
Department of Public Works
Attention: Rudy Emami
200 S. Anaheim Blvd., Suite 276
Anaheim, CA 92805
To the Surety:
Great American Insurance Group
Attention: Mike Mason
301 East Fourth Street, 24th Floor
Cincinnati, Ohio 45202
17. This Agreement shall not be modified or amended except by a written document duly executed by the parties or their successors. This Agreement is binding upon the parties hereto, their representatives, successors and a ssigns; provided, however, that no rights shall accrue hereunder to or for the use or benefit of any person or entity other than the parties hereto, their respective successors or assigns. The provisions of this Agreement shall be applied and 7 interpreted in a manner consistent with each other so as to carry out the purposes and mutual intent of the parties, but if for any reason any provision is unenforceable or invalid, such provision shall be deemed severed from this Agreement, and the remaining provisions shall be carried out with the same force and effect as if the severed provision had not been a part of this Agreement.
18. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California. The exclusive venue for any action arising from this Agreement shall be in the Superior Court of the County of Orange.
19. This document may be executed in counterparts.
20. The Effective D ate of this Agreement shall be the date it is approved by ANAHEIM.
[Signatures Appear on the next page]
8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth
CITY OF ANAHEIM,
a municipal corporation
DATE OF EXECUTION:
_______________________ By__________________________________ Rudy Emami, Director of Public Works
DATE OF EXECUTION: ATTEST:
_________________________ ________________________________ City Clerk
"ANAHEIM"
GREAT AMERICAN INSURANCE
COMPANY, an Ohio corporation
DATE OF EXECUTION: By______________________________
_____________________ Printed Name____________________
Title___________________________
"GAIC"
APPROVED AS TO FORM:
BRYN MORLEY, CITY ATTORNEY
By__________________________
Date________________________
149441