Letter of Indemnity Sample American Contractors Indemnity Company  9841 AIRPORT BOULEVARD 9TH FLOOR by mie20532

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									                    American Contractors Indemnity Company                                                           

                            9841 AIRPORT BOULEVARD, 9TH FLOOR, LOS ANGELES, CA 90045 649-0990
                                  601 S. Figueroa St., Suite 1600, Los Angeles, CA 90017 (310) (310) 649-0990

                                                                                            BOND NO. ____________________
                                          SAMPLE SET ASIDE LETTER PREMIUM ____________________
                                          MAINTENANCE BOND
              typed on Bank stationary _____________________________________________________
Sample: To be BY THESE PRESENTS, That we, and returned to the Company’s Branch Office servicing
the account.
________________________________________________________________________________ (hereinafter
called Principal), as Principal, and AMERICAN CONTRACTORS INDMNITY COMPANY, a corporation, organized
and existing under the laws of the State of California and authorized to transact a general surety business in the State of
_____________________________________, (hereinafter called Surety), as Surety, are held and firmly bound unto

To: American Contractors Indemnity Company
    9841 Airport Blvd., 9th Floor
(hereinafter called Obligee), in the sum of ________________________________________________________________
    Los Angeles, CA 90045
___________________________________________________________________ DOLLARS ($__________________),
lawful money of the United States of America, to be paid to the said Obligee, or its successors or assigns, to the payment
Re: (Name of Principal) to be made, we do bind ourselves, our heirs, executors, administrators, successors and
of which sum well and truly
assigns, jointly and severally, firmly by these presents.
WHEREAS, the Principal entered into a contract with the said Obligee, dated ___________________________________,

(Name of Bank) has arranged financing for (Name of Borrower) in the amount of $________________ for the
for ______________________________________________________________________________________________
construction of___________________________________ and the adjacent improvements in tract______________.
In consideration of the execution by AMERICAN CONTRACTORS INDEMNITY COMPANY, hereinafter referred to as
Surety, of bond(s) in the approximate amount of $_________________________ on behalf of (Name of Principal)
guaranteeing the (Name of Municipal Body/County) completion of certain public improvements in said tract
______________________________________________________________________________________________ and,
___________ and as a direct inducement to Surety to execute said bond(s), (Name of Bank) agrees that immediately
WHEREAS, the Obligee requires that these presence be pay into or before impound account a acceptance of said
upon recordation of the construction loan it willexecuted on a specialthe final completion and sum of not less than
$___________. This impound account is to be opened at the______________ office of (Depository) and will be
contract and
WHEREAS said contract was completed and accepted on the _____________________________________________ day

of _____________________________________, ______________.
The agreement covering the project will provide that the funds in said impound account are subject to withdrawal upon
NOW, THEREFORE, THE of Borrower), and OBLIGATION IS SUCH, that if the for payment of the subdivision
the approval of (Name CONDITION OF THIS said funds are to be disbursedPrincipal shall remedy
improvements mentioned above and only after (Name of Bank) has satisfied itself that the work paid for has actually
been performed. Obligee, any defects which may develop during a period of __________________________________
without cost to the
from the date of completion and acceptance of the work performed under the contract, caused by defective or inferior
materials or workmanship, then this that in the be void; is necessary be institute foreclosure proceedings against
(Name of Bank) further agreesobligation shall event itotherwise it shallto and remain in full force and effect.
(Name of Borrower) on the property legally described herein, it will immediately notify AMERICAN
SIGNED, SEALED INDEMNITY COMPANY and further, take all necessary steps to protect the interests of
CONTRACTORS AND DATED THIS _______________ DAY OF ___________________________, ____________.
AMERICAN CONTRACTORS INDEMNITY COMPANY as respects its liability on surety bond(s) issued
pursuant to this letter howsoever AMERICAN CONTRACTORS INDEMNITY COMPANY'S liability may be affected       Principal
by said foreclosure.                                       By: __________________________________________

In the event (Name of Borrower/Principal) fails to complete and/or pay for improvements or meet COMPANY
                                                            AMERICAN CONTRACTORS INDEMNITY its obligations to
parties with which (Name of Principal) has contracted to do the work (as required by the City/County under said bond(s)
                                                             By: __________________________________________
described herein) all funds remaining in said impound account shall be immediately available to AMERICAN
CONTRACTORS INDEMNITY COMPANY to complete and pay the costs of said improvements, and in such    Attorney-in-Fact
event, (Name of Borrower) waives any claim or interest in the remaining funds. AMERICAN CONTRACTORS
INDEMNITY COMPANY shall not in any way be obligated to repay said funds so used to (Name of Bank).

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                                                                                                                                 HCCSZZ524A06/04 pg1
(Name of Bank) acknowledges that the surety is relying on the availability of funds under such lending agreement
with (Name of Borrower) pledged for its use and benefit and as a condition to the issuing of any bond obligations
entered into on behalf of (Name of Principal), as surety on the above described project and as such (Name of Bank)
agrees that in the event that the final lending agreement referenced herein with (Name of Borrower) is not entered
into, the (Name of Bank) shall, within 24 hours of its determining that the final lending agreement shall not be
entered into, notify the surety, by certified mail, that it has not and will not enter into such a lending agreement and
the surety shall within 48 hours of receipt of such notice return the set aside letter to (Name of Bank).

This is an irrevocable commitment of funds which is not subject to recall or offset by (Name of Bank).

We agree and consent to the foregoing agreement:

                                    (NAME OF BANK)


                                    Typed Name and Title

                                    AMERICAN CONTRACTORS INDEMNITY COMPANY


                                    Typed Name and Title

                                    (NAME OF BORROWER)


                                    Typed Name and Title

                                                                                                                           HCCSZZ524A06/04 pg2

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