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Home My WebLink About12-18 Resolution No. 12-18 RESOLUTION AUTHORIZING EXECUTION OF A SETTLEMENT AGREEMENT WITH THE CONTINENTAL INSURANCE COMPANY REGARDING THE WATERFORD SUBDIVISION PERFORMANCE BONDS (Neighborhood 5 and Neighborhood 6) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and directed to execute a Settlement Agreement with The Continental Insurance Company on behalf of the City of Elgin regarding the Waterford Subdivision performance bonds relating to Neighborhood 5 and Neighborhood 6, a copy of which is attached hereto and made a part hereof by reference. s/ David J. Kaptain David J. Kaptain, Mayor Presented: January 25, 2012 Adopted: January 25, 2012 Omnibus Vote: Yeas: 6 Nays: 0 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk SETTLEMENT AGREEMENT This Settlement Agreement is made and entered into as of the 25th day of January, 2012, by and between the City of Elgin, Illinois, an Illinois municipal corporation(the "City"), and The Continental Insurance Company ("CNA"). RECITALS WHEREAS, Kimball Hill Homes, Inc. ("Kimball Hill") undertook to develop certain real property in Elgin, Illinois, commonly known as the Waterford Subdivision, which Waterford Subdivision is divided into Neighborhoods for the purpose of development; and WHEREAS, to secure the construction of certain improvements in the Waterford Subdivision, Kimball Hill procured and delivered to the City certain performance bonds including the following performance bonds issued by CNA as surety: Bond No. 929297376 dated July 25, 2003, for certain onsite grading improvements for Neighborhood 6 of the Waterford Subdivision; Bond No. 929297377 dated July 25, 2003, for certain onsite grading improvements for Neighborhood 5 of the Waterford Subdivision; Bond No. 929297413 dated September 26, 2003, for certain public improvements for Neighborhood 6 of the Waterford Subdivision; and Bond No. 929297414 dated September 26, 2003, for certain offsite watermain improvements related to Neighborhood 6 of the Waterford Subdivision (such four bonds being hereinafter collectively referred to as the "CNA Bonds"); and WHEREAS, Elgin has notified CNA that Kimball Hill was in default of its bonded obligations and made demand upon the CNA Bonds; and WHEREAS, the City and CNA have agreed to settle all issues involving the CNA Bonds in accordance with the terms and conditions set forth in this Settlement Agreement. NOW, THEREFORE, for and in consideration of the mutual undertakings as set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and CNA agree as follows: 1. The foregoing recitals are incorporated into this Agreement. 2. CNA shall pay to the City within ten (10) days of the execution of this Settlement Agreement the sum of Five Hundred Five Thousand Dollars ($505,000) in full satisfaction of all obligations under the CNA Bonds. 3. In consideration of the aforesaid payment of$505,000 from CNA to the City, the City hereby completely, fully and finally releases, remises, acquits and forever discharges The Continental Insurance Company, together with its parent, subsidiary and affiliated corporations, their officers, directors, shareholders, employees, agents, attorneys and consultants, from any and all claims, known or unknown, which have been or could have been asserted against any of them directly or indirectly to the CNA Bonds, each of which named Kimball Hill Homes as principal and related to the Waterford Subdivision Neighborhoods 5 and 6. 4. In further consideration of the aforesaid payment of $505,000 from CNA to the City, the City hereby assigns to CNA its rights and remedies that it may have against Kimball Hill with respect to the Neighborhood 5 or 6 improvements to the extent of such payment made by CNA to the City. CNA agrees not to assert claims, including lien claims, against any party or entity (other than against Kimball Hill) with respect to the payment made by CNA to the City. 5. CNA for itself, its parent, subsidiary and affiliated corporations, and successors and assigns, and any and all persons or entities claiming through CNA, jointly and severally, hereby fully and irrevocably releases and discharges the City, its attorneys, agents, contractors, assigns, officers, officials, council members and employees, jointly and severally, from all manner of liability or loss, claims, liens, causes of actions or demands, of any nature, whether in - 2 - law or in equity, known or unknown, which CNA now has or may have arising out of or related to the CNA Bonds or the Waterford Subdivision. CNA further agrees not to assert any claims, including lien claims, against any party or entity (other than Kimball Hill) with respect to payments made by CNA with respect to the CNA Bonds. 6. The City agrees to deliver to counsel for CNA the original CNA bonds within thirty (30) days after the receipt by the City of the aforesaid payment from CNA of$505,000. 7. The City may use the aforesaid payment of$505,000 for any lawful purposes that it deems appropriate, in its sole discretion, including, but not limited to, with respect to improvements, costs and expenses in connection with the Waterford Subdivision. 8. This Settlement Agreement contains the entire understandings and agreements of the parties hereto with respect to the subject matter hereof. All oral or written agreements prior to the effective date of this Settlement Agreement and which relate to the Settlement Agreement and the matters set forth herein are declared null and void. Any modification of this Settlement Agreement must be made in writing and executed by the parties hereto. 9. Any notice related to this Settlement Agreement shall be deemed made if either party emails such notice or mails such notice by first class mail, postage prepaid, as follows: As to the City of Elgin: William A. Cogley Corporation Counsel City of Elgin 150 Dexter Court Elgin, IL 60120-5555 Tel.: (847) 931-5659 Fax: (847) 931-5665 e-mail:co ley w cr,cityofelgin.org - 3 - As"to The Continental Insurance Company: Jerome C. Gardocky, Esq. Senior,Claims Counsel .333 South Wabash Avenue 4151 Floor Chicago, Illinois 60604-4107 Tel: (312) 822-3673 Fax: (312) 755-7276 e-(nail:jerome.gardocky @cnasurety.com With,,a,copy to: Ilarold E. McKee Riordan McKee&.Piper, LLC 20 N. Wacker Drive Suite 910 Chicago, Illinois 60606 e=mail: hmckee a,rmp-llc.com 10. It is understood and agreed by the City and CNA that this Settlement Agreement shall be construed without regard to any presumption or other rule requiring construction against the drafting party. 11. This Settlement Agreement may be executed in counterparts. Signatures transmitted by facsimile or e-mail shall have the same legal effect as an original signature. 12. The parties agree that no third party shall have any rights under.this Agreement. 13. This agreement shall be governed by the laws of the State of Illinois. IN WITNESS WHEREOF,the parties have executed this Settlement Agreement as of the date and year first written above. CITY OF ELGIN, an.Illinois municipal THE CONTINENTAL INSURANCE Corporation, COMPANY, By: By: Its Mayor ts- ATTEST: City Clerk F:Legal QepBAgreementl5etilemenr Agreement-CNA(Kimball Hill)-Waterford Nbads5&6.doc - 4 - As to The Continental Insurance Company: • Jerome C. Gardock Y Es q. .q Senior Claims Counsel 333 South Wabash Avenue 41" Floor Chicago, Illinois 60604-4107 Tel: (312) 822-3673 Fax: (312) 755-7276 e-mail:jerome.gardocky @cnasurety.com With a copy to: Harold E. McKee Riordan McKee & Piper, LLC 20 N. Wacker Drive Suite 910 Chicago, Illinois 60606 e-mail: hmckee@,rmp-llc.com 10. It is understood and agreed by the City and CNA that this Settlement Agreement shall be construed without regard to any presumption or other rule requiring construction against • the drafting party. 11. This Settlement Agreement may be executed in counterparts. Signatures transmitted by facsimile or e-mail shall have the same legal effect as an original signature. 12. The parties agree that no third party shall have any rights under this Agreement. 13. This agreement shall be governed by the laws of the State of Illinois. IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as of the date and year first written above. CITY OF ELGIN, an Illinois municipal THE CONTINENTAL INSURANCE Corporatio COMPANY, By: By: Its Mayory Its ATTE T: • City Clerk FAUgal Dept\Agreement\Settlement Agreement-CNA(Kimball Hill)-Waterford Nbads 5&6.doc - 4 -