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HomeMy WebLinkAboutA7250 - VAVRINEK, TRINE, DAY & CO., LLP (VTD) - NON-AUDIT SVCS FOR CASH COLLECTION SITES CONTRACT SERVICES AGREEMENT Non-Audit Services for Cash Collection Sites Vavrinek,Trine,Day& Co., LLP aka VTD &Co.,LLP T ISG EMENT FOR CONTRACT SERVICES ("Agreement") is made and entered into on Ia -, 2019, by and between the City of Palm Springs, a California charter city and municipal corporation ("City"), and Vavrinek, Trine, Day & Co., LLP, a Certified Public Accounts, ("Contractor"). City and Contractor are individually referred to as "Party" and are collectively referred to as the"Parties". RECITALS A. City requires the services of Certified Public Accounts, for non-audit services of cash collection sites throughout the City, ("Project") as defined by Government Auditing Standards issued by the Comptroller General of the United States. B. Contractor has submitted to City a proposal to provide non-audit services of cash collection sites,to City under the terms of this Agreement. C. Based on its experience, education, training, and reputation, Contractor is qualified and desires to provide the necessary services to City for the Project. D. City desires to retain the services of Contractor for the Project. In consideration of these promises and mutual agreements, City agrees as follows: AGREEMENT 1. CONTRACTOR SERVICES 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Contractor shall provide non-audit services of cash collection sites throughout the City, services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and incorporated by reference (the "services" or "work"). Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees. Contractor warrants that all services and work shall be performed in a competent, professional, and satisfactory manner consistent with prevailing industry standards. In the event of any inconsistency between the terms contained in the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern. 1.2 Compliance with Law. Contractor services rendered under this Agreement shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders,rules, and regulations. 1.3 Licenses and Permits. Contractor shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. 720599.1 1 ORIGINAL BID Revised:1/31/18 AND/OR AGREEMENT 1.4 Familiarity with Work. By executing this Agreement, Contractor warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this Agreement. 2. TIME FOR COMPLETION The time for completion of the services to be performed by Contractor is an essential condition of this Agreement. Contractor shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit "A." Contractor shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Contractor. Delays shall not entitle Contractor to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONTRACTOR 3.1 Compensation of Contractor. Contractor shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit "A". The total amount of Compensation shall not exceed $15,000.00 (fifteen thousand dollars). 3.2 Method of Payment. In any month in which Contractor wishes to receive payment, Contractor shall submit to City an invoice for services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for authorized services performed. City shall pay Contractor for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty (30) days of receipt of Contractor's invoice. 3.3 Chanaes. In the event any change or changes in the Scope of Services/Work is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into: A. To provide for revisions or modifications to documents, work product, or work,when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Contractor's profession. 3.4 Appropriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made,this Agreement shall automatically terminate without penalty to City. 4. PERFORMANCE SCHEDULE Agreement. 4.1 Time of Essence. Time is of the essence in the performance of this p 2 Revised:1/31/18 720599.1 4.2 Schedule of Performance. All services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time period extension must be approved in writing by the Contract Officer. 4.3 Force Maieure. The time for performance of services to be rendered under this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Contractor, if Contractor notifies the Contract Officer within ten (10) days of the commencement of such condition. Unforeseeable causes include, but are not limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather. After Contractor notification, the Contract Officer shall investigate the facts and the extent of any necessary delay, and extend the time for performing the services for the period of the enforced delay when and if, in the Contract Officer's judgment, such delay is justified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement,this Agreement shall continue in full force and effect for a period of four(4)months, commencing on February 11, 2019, and ending on June 30, 2019, unless extended by mutual written agreement of the parties. 4.5 Termination Prior to Expiration of Term. City may terminate this Agreement �- at any time, with or without cause, upon thirty (30) days written notice to Contractor. Where termination is due to the fault of Contractor and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Contractor shall immediately cease all services except such as may be specifically approved by the Contract Officer. Contractor shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer after such notice. Contractor may terminate this Agreement,with or without cause,upon thirty(30)days written notice to City. 5. COORDINATION OF WORK 5.1 Representative of Contractor. The following principal of Contractor is designated as being the principal and representative of Contractor authorized to act and make all decisions in its behalf with respect to the specified services and work: Jessica Andersen, Partner. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the services under this Agreement. The foregoing principal may not be changed by Contractor without prior written approval of the Contract Officer. 5.2 Contract Officer. The Contract Officer shall be the City Manager er or his/her designee "Contract Officer"). Contractor shall be responsible for keeping the Contract Officer tm ( ) p p g fully informed of the progress of the performance of the services. Contractor shall refer any 3 Revised:1/31/18 720599.1 decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer. 5.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, education, capability, and reputation of Contractor, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Contractor shall not contract with any other individual or entity to perform any services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 5.4 Independent Contractor. This section does not apply to the Contractor's working papers or audit documentation which are the property of the Contractor in accordance with professional auditing standards. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Contractor, its agents or employees, perform the services required, except as otherwise specified. Contractor shall perform all required services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Contractor's work product, result, and advice. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 5.5 Personnel. Contractor agrees to assign the following individuals to perform the services in this Agreement. Contractor shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager,the City shall have the unrestricted right to order the removal of any personnel assigned by Contractor by providing written notice to Contractor. Name: Title: Jessica Andersen Partner 6. INSURANCE Contractor shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit"B", incorporated herein by reference. 7. INDEMNIFICATION. To the fullest extent permitted by law, Contractor shall defend (at Contractor's sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, agents, and volunteers (collectively the "Indemnified Parties"), from and against any and all liabilities, actions, suits, claims, demands, losses, costs,judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively "Claims"), including but not limited to Claims arising from injuries to or death of persons (Contractor's employees included), for damage to property, including property owned by City, from any violation of any federal, state, or local law or 4 Revised:1/31/18 720599.1 ordinance, and from errors and omissions committed by Contractor, its officers, employees, representatives, and agents, that arise out of or relate to Contractor's performance under this Agreement. This indemnification clause excludes Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, agents, and volunteers. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit Contractor's indemnification obligation or other liability under this Agreement. Contractor's indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if an action is timely filed, until such action is final. This provision is intended for the benefit of third party Indemnified Parties not otherwise a party to this Agreement. 8. RECORDS AND REPORTS 8.1 Reports. Contractor shall periodically prepare and submit to the Contract Officer reports concerning the performance of the services required by this Agreement, or as the Contract Officer shall require. 8.2 Records. Contractor shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Contractor shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 8.3 Ownership of Documents. This section does not apply to the Contractor's working papers or audit documentation which are the property of the Contractor in accordance with professional auditing standards. All drawings, specifications, reports, records, documents, and other materials prepared by Contractor in the performance of this Agreement shall be the property of City. Contractor shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Contractor shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Contractor may retain copies of such documents for Contractor's own use. Contractor shall have an unrestricted right to use the concepts embodied in such documents. 8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Contractor in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 8.5 Cost Records. Contractor shall maintain all books, documents,papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement. Contractor shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City and copies shall be promptly furnished to City upon request. 5 Revised:1/31/18 720599.1 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including,without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs. 9.3 Waiver. No delay or omission in the exercise of any right or remedy of a non- defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Contractor. Any waiver by either party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement. 9.4 Riahts and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 9.5 Leaal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of this Agreement. 10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City Officers and Employees. No officer or employee of City shall be personally liable to the Contractor, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Contractor or its successor, or for breach of any obligation of the terms of this Agreement. 10.2 Conflict of Interest. Contractor acknowledges that no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement nor shall Contractor enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Contractor warrants that Contractor has not 6 Revised:1/31/18 720599.1 paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement. 10.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin(i.e.,place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a "prohibited basis"). Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City's lawful capacity to enter this Agreement, and in executing this Agreement, Contractor certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Contractor activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship; and further,that Contractor is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, , including without limitation the provision of benefits, relating to non-discrimination in city contracting. 11. MISCELLANEOUS PROVISIONS 11.1 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set forth below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing if mailed as provided in this Section. Either party may change its address by notifying the other party of the change of address in writing. To City: City of Palm Springs Attention: City Manager/City Clerk 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 To Contractor: Vavrinek, Trine,Day&Co., LLP Certified Public Accountants Attention: Jessica Andersen 10681 Foothill Blvd. Suite 300 Rancho Cucamonga, CA 91730 11.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and supersedes all other written agreements. 11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties. 7 Revised:1/31/18 720599.1 11.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses,paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties. 11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party to this Agreement. 11.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that s,4ch Party is bound, for purposes of this Agreement,by the same. 11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement. 8 Revised:1/31/18 720599.1 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: David H. Ready,PhD City Manager APPROVED AS TO FORM: ATTEST qd By ward Z. Kotkin, thony J. 'ia,M C City Attorney City Clerk (y� "CONTRACTOR" tll`! �_I 1a50 Vavrinek, Trine,Day& Co.,LLP aka VTD Date: I By: MM ica Andersen Ofirtner Not To Exceed$ Without The Express � — Authorization p f The ritten Manager. City 9 Revised:1/31/18 720599.1 CALHVBA ALL4n)RPOSE CIVIL CODE§1189 _ .. �..a....c' r of r-+.+ti•�,-s+u.r»- ttxa ec �e• -•X ,c•-d r ... =„..>ny,raxxe...b�.�e sx A storey pubic or other dke conupleerg#a cero'lkme verilliee ardy to ida lay d to individual who agreed the dom my t to whch the oaf a atlachecf.end not the truftkwa.aorarecyt or veirity of dva docun rvL State of Caifarnis } Cor,arty of on bekxe me. Dde Here kumt Afame art TrBe of the Officer why appeared AbmsM at1 who proved to me an the basis of ashafach"evidence to be the peter mx*)whose rurrne(s) is/are sufm c ribed to the withhn irad ument and edmowtedged llo me Dud hefsheAhey executed the same in ho:AwwAtuev ardhorized aapecity(m).and that by hishuerAhe`aignahma(s)on the w abunw A the person(s). or the entity upon beheff of which the penKmXa)acted,sweated the irrdnarrent. I cerbl'y carder PENALTY OF PHiJLRY under the laws of the Side of Cal'hfnrrin Dud the txegaing paragraph is true and ohxreot WITNESS my hand and of6iciel seal. SiWkshee Signairrs of Notary Pu6dtc Planate Notary Seal Above QPI)UTAL4L Though this aechon is nipbormL coral bhrg fl o information can deter aferabon of the document or h a idulerd of this form to an unattended doc Earmnf Dmmnpbon of Attached Dominant Tdle or Type of Document Documerd Dais: Number of Pages Si pmga)O tear Then Named Above. CaParaty(ee)Clamed by Signerte) Sigrar's Name: Signora Name: ❑Corponde Off——Tite(a): ❑0-pa ds OfTi——Tiia(s}: ❑pastier— ❑United ❑Gerheral ❑Partrrer— ❑LktfW ❑(general ❑Inrik*kn I ❑Attorney in Fad ❑IncMil al ❑Attorney in Fad ❑Trustee ❑Guardian or Censer adw ❑Trustee ❑(guardian or Conservator ❑€)that ❑O dw- SV—Is Represarrlirg: Signer Is Representing: W0i4 Na6md Nobvy Assmiew•www. .ahg-1-8t1411S NDTARY(t-800-8764227) kwm ti5W I� 10 Revised:1/31/18 720599.1 EXHIBIT "A" CONTRACTOR'S SCOPE OF SERVICES/WORK Including, Schedule 1 of Fees And Schedule of Performance 11 Revised:1/31/18 720599.1 U"M 64W rl VAA'i RINEK,TRINE, 'Y N CO., LLP VALUE THE k#W^C& Certified Public Accountants February 7,2019 Nancy Pauley,Director of Finance and Treasurer City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Dear Ms.Pauley, As a follow up to our recent discussion,this engagement letter summarizes the proposed non-audit services to the City of Palm Springs (City). The standards to which Vavrinek Trine Day & Co., LLP (VTD) will conform are intended to maintain objectivity and independence for both audit work and non-audit work with our governmental clients. The standards for non-audit services for governmental audit clients are based on two overarching principles: • Auditors(VTD)should not perform management functions or make management decisions;and • Auditors (VTD) should not audit their own work or provide non-audit services in situations where the amounts or services involved are significant or material to the subject matter of the audit In light of these principles, and consideration of your needs, we have outlined below the following ways we can assist the City. We will provide you with professional accounting assistance within the engagement scope described below. OBJECTIVE OF THE ENGAGEMENT The City desires an in-depth review of cash collection procedures at key sites throughout the City. We can assist the City in this capacity and offer the scope of services outlined below. SCOPE OF SERVICES Specific services to be provided are as follows: • Visit cash collection sites throughout the City. The sites selected will be mutually agreed upon between VTD and the City(at the direction of the Director of Finance and Treasurer). • For each site,obtain an understanding of the processes in place to evaluate the key controls which safeguard assets and promote segregation of duties. We will note any areas of weakness or deficiency in City processes. We will gain this understanding through inquiry with those City personnel responsible for cash collections, as well as review of relevant documents and forms, to evaluate procedures to collect cash, prepare and record the cash deposits, record collection activity within the general ledger, reconciliation procedures, and segregation of duties. • We will review results of the site visits with the Director of Finance and Treasurer, and provide recommendations for improvements based on the results from above. 10681 Foothill Blvd.,Suite 300,Rancho Cucamonga,CA 91730 P 909.466.4410 F 909,466.4431 W vtdcpa.com City of Palm Springs 2018 Consulting Engagement Letter February 7,2019 Page 2 of 3 RESPONSIBILITY OF THE CLIENT The work will be non-audit services as defined by Government Auditing Standards issued by the Comptroller General of the United States. Our work will not constitute an audit or a review of transactions and should not be relied upon as such.The City is responsible for the appropriate recording and reporting of financial transactions and management decisions. Accordingly, all work will be conducted at the direction of the Director of Finance and Treasurer,to ensure that the work meets the City's objectives. Government Auditing Standards require that the City is responsible for the substantive outcomes of VTD work,and be in a position in fact and appearance to make an informed judgment on the results of the non-audit services, and that the City will: • Designate a knowledgeable management-level individual to be responsible and accountable for overseeing the non-audit services, • Establish and monitor the performance of the non-audit services to ensure that it meets management's objectives, • Make any decisions that involve management functions related to the non-audit services and accept full responsibility for such decisions,and • Evaluate the adequacy of the services performed and any findings that result. In connection with our engagement, we will make recommendations to strengthen internal control or improve operations and can discuss alternative approaches but,management is responsible for implementing any changes in the internal control. STAFFING Vavrinek Trine Day&Co.,LLP has owners that are not licensed as certified public accountants as permitted under Section 5079 of the California Business and Professions Code.Non-licensee owners may participate in performing professional services for the City. FEES We will provide the services outlined above at an estimate not to exceed$15,000. This reflects approximately 60 to 90 hours of time, depending on the hourly rates of the personnel assigned to the engagement. Our rates vary based on the degree of responsibility and the experience level of the personnel. For work beyond the initial scope and timing, we will communicate with you regarding the revised scope for additional services and the related estimated fees. Fees will be based on the hours worked. Our quoted hourly rates are as follows: Partner $240 Manager $185 Supervisor $165 Senior $13 5 Staff $105 Paraprofessional $65 We also may issue a separate engagement letter covering the additional services, if applicable. In the absence of any other written communication from us documenting such additional services, our services will continue to be governed by the terms of this engagement letter. Our invoices will be rendered each month as work progresses and are payable on presentation. City of Palm Springs 2018 Consulting Engagement Letter February 7,2019 Page 3 of 3 TIMING We will commence services immediately, with fieldwork anticipated in February and March 2019, as needed, at mutually agreed-upon dates. TERMINATION OF ENGAGEMENT,INDEPENDENT CONTRACTOR,AND INSURANCE Either party may terminate this engagement without cause.VTD is an independent contractor as defined by Federal and State taxing authorities. VTD will maintain current worker compensation and liability insurance policies. For any questions regarding this letter,please contact Jessica Andersen at(909)466-4410.If this engagement letter correctly states your understanding of the engagement,please sign below and return a copy for our files. Sincerely, Je eicAndersen,Partner Of Vavrinek, Trine,Day&Co.,LLP JA: scm 190176 Response: This letter correctly sets forth the understanding of the City of Palm Springs By: Title: Date: EXHIBIT "B" INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 12 Revised:1/31/18 720599.1 INSURANCE 1. Procurement and Maintenance of Insurance. Contractor shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Contractor's performance under this Agreement. Contractor shall procure and maintain all insurance at its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement. Contractor shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty(30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, agents, and volunteers as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Contractor's obligation to indemnify City, its elected officials, officers, agents, employees, and volunteers. 2. Minimum Scope of Insurance. The minimum amount of insurance required under this Agreement shall be as follows: 1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars ($2,000,000)general aggregate; 2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00)per occurrence; 3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000) annual aggregate is: X required is not required; 4. Workers' Compensation insurance in the statutory amount as required by the State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Contractor has no employees, Contractor shall complete the City's Request for Waiver of Workers' Compensation Insurance Requirement form. 3. Primary Insurance. For any claims related to this Agreement, Contractor's insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, agents, and volunteers shall be in excess of Contractor's insurance and shall not contribute with it. For Workers' Compensation and Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and 13 Revised:1/31/1 S 720599.1 contribution it may have against City, its elected officials, officers, employees, agents, and volunteers. 4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Contractor provides claims made professional liability insurance, Contractor shall also agree in writing either(1)to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Contractor's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Contractor's services under this Agreement. Contractor shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy. 5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best's Key Rating of B++, Class VII, or better,unless otherwise acceptable to the City. 6. Verification of Coverage. Contractor shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Contractor's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or(2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: 1. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured... " ("as respects City of Palm Springs Contract No. or 'for any and all work performed with the City"may be included in this statement). 2. "This insurance is primary and non-contributory over any insurance or self- insurance the City may have..." ("as respects City of Palm Springs Contract No. or 'for any and all workperformed with the City" may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration Holder thereof, the issuing company will mail 30 days written notice to the Certificate olde date f, g p y y named." Language such as, "endeavor to" mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out. 14 Revised:1/31/18 720599.1 4. Both the Workers' Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents, and volunteers. In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Contractor's obligation to provide them. 7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials, officers, employees, agents, and volunteers; or (2) Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self-insured retention under the policy. Contractor guarantees payment of all deductibles and self-insured retentions. 8. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 15 Revised:1/31/18 720599.1 ��...�., VAVRTRI-01 MA912705 ACURt7 TE(MM/DD/YYYY) CERTIFICATE OF LIABILITY INSURANCE DA02/13/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER License#OE77964 CONTACT Suzanne Posada Integro USA Inc.,dba:Integro Insurance Brokers jAHON EM);(949)419-1644 FAX, 3620 Birch Street No):(949)419-1674 E- Newport Beach,CA 92660 ADDRMAILE :suzanne.posada@integrogroup.com INSURERS AFFORDING COVERAGE NAIC q INSURERA:Federal Insurance Company 20281 INSURED INSURER B:EVEREST NATIONAL INSURANCE COMPANY 10120 Vavrinek,Trine,Day and Company,LLP INSURER C:Navigators Insurance Company 42307 10681 Foothill Blvd.,Suite#300 INSURERD: Rancho Cucamonga,CA 91730 INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE INSADDp SUBR WVD POLICY NUMBER POIDDY EFF POLICY EXP LIMITS A X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 CLAIMS-MADE a S( ,000 PR MI occurrence $OCCUR X 36029324WCE 05/13/2018 05/13/2019 DAMAGERENTED 1�O10- MED EXP An one person) $ 1 PERSONAL&ADV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000 X POLICY❑ JER& LOC PRODUCTS-COMP/OP AGG $ 2,000,000 OTHER: $ COMBINED SINGLE LIMIT 1,000,000 A AUTOMOBILE LIABILITY Ea accident $ JXANY AUTO 73593893 05/13/2018 05/13/2019 BODILY INJURY Perperson) $ OWNED SCHEDULED AUTOS ONLY AUTOS BODILYBODILY INJURY Per accident $ AURTOS ONLY X A�OS ONEDY Pe�PcatlentDAMAGE $ A X UMBRELLA LIAB X OCCUR EACH OCCURRENCE $ 10,000,000 EXCESS LIAB CLAIMS-MADE X 79887380 05/13/2018 05/13/2019 AGGREGATE $ 10,000,000 DED I X I RETENTION$ 0 $ B WORKERS COMPENSATION X PER OTH- ER AND EMPLOYERS'LIABILITY Y/N E.L.EACH ACCIDENT $CA10003013181 05/13/2018 05/13/2019 1,000,000 ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? N/A / 1,000,000 (Mandatory in NH) L/ E.L.DISEASE-EA EMPLOYE $ If yes,describe under 1,000,000 DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $ C E&O Liability CE19APLOBFDPVIC 01/01/2019 01/01/2020 Each Occurrence/Agg. 5,000,000 C E&O Liability CE19APLOBFDPVIC 01/01/2019 01/01/2020 Retention-Each Claim 100,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES (ACORD 101,Additional Remarks Schedule,may be attached if more space is required) Errors&Omissions Liability-Claims Made-Full Prior Acts Excess 1st Layer E&O Liability: Insurance Carrier:Aspen Specialty Insurance Co. Policy No.:LXA9ALH19 Policy Period:01/01/19 to 01/01/20 Limit:$5,000,000 Each Claim/Aggregate SEE ATTACHED ACORD 101 CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Palm Springs THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN tYACCORDANCE WITH THE POLICY PROVISIONS. Attention:City Manager/City Clerk 3200 E.Tahquitz Canyon Way Palm Springs,CA 92262 AUTHORIZED REPRESENTATIVE ACORD 25(2016/03) ©1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD AGENCY CUSTOMER ID:VAVRTRI-01 MA912705 LOC#: 1 AC(�>R O` ADDITIONAL REMARKS SCHEDULE Page 1 of 1 AGENCY License#OE77964 NAMED INSURED Iratero USA Inc.,dba: Irate ro Insurance Brokers Vavrinek,Trine Da and Comppany,LLP 9 9 10681 Foothill 61vd.Suite#300 POLICY NUMBER Rancho Cucamonga,CA 91730 EE PAGE 1 CARRIER NA IC CODE EE PAGE 1 SEE P 1 EFFECTIVE DATE:SEE PAGE 1 ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: ACORD 25 FORM TITLE: Certificate of Liability Insurance Description of Operations/LocationsNehicies: City of Palm Springs,its elected officials,officers,employees,agents,and volunteers are additional insured,per the attached form #80-02-2367(Rev.5-07)including Brimary non-contributory coverage,to the extent re uired by win en^contract,subject to policy terms and conditions.Separation-of Insureds apply,pert e a ac el—i d orm#80-02-2000 4-01,to the extent requires by written contract,subject to policy terms and conditions.Waiver of Subro-gation applies on the Workers'Corn ensation,per the attached form#WC 04 03 06(4-84),to the extent required by written contract,subject to policy terms an con Itlons.60 da s notice of ancellation.20 days for non-payment o p�m, per the attached form#80-02-9717 9-15,to the extent requirgcLby written contract, subject to policy terms and conditions. ACORD 101 (2008/01) ©2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD C H U B B® Liability Insurance Endorsement Policy Period MAY 13,2018 TO MAY 13,2019 Effective Date MAY 13,2018 Policy Number 3602-93-24 WCE Insured VAVRINEK,TRINE,DAY AND COMPANY,LLP Name of Company FEDERAL INSURANCE COMPANY Date Issued FEBRUARY 22,2018 This Endorsement applies to the following forms: GENERAL LIABILITY Under Who Is An Insured,the following provision is added Who is An Insured Additional Insured- Persons or organizations shown in the Schedule are insureds;but they are insureds only if you are Scheduled Person obligated pursuant to a contract or agreement to provide them with such insurance as is afforded by Or Organization this policy. However,the person or organization is an insured only: • if and then only to the extent the person or organization is described in the Schedule; • to the extent such contract or agreement requires the person or organization to be afforded status as an insured; • for activities that did not occur,in whole or in part,before the execution of the contract or agreement;and • with respect to damages,loss,cost or expense for injury or damage to which this insurance applies. No person or organization is an insured under this provision: • that is more specifically identified under any other provision of the Who Is An Insured section(regardless of any limitation applicable thereto). • with respect to any assumption of liability(of another person or organization)by them in a contract or agreement.This limitation does not apply to the liability for damages,loss,cost or expense for injury or damage,to which this insurance applies,that the person or organization would have in the absence of such contract or agreement. Liability Insurance Additional Insured-Scheduled Person Or Organization continued Form 80-02-2367(Rev.5-07) Endorsement Page 1 CHUBB" Liability Endorsement (continued) Under Conditions,the following provision is added to the condition titled Other Insurance. Conditions Other Insurance— If you are obligated,pursuant to a contract or agreement,to provide the person or organization Primary, Noncontributory shown in the Schedule with primary insurance such as is afforded by this policy,then in such case Insurance—Scheduled this insurance is primary and we will not seek contribution from insurance available to such person Person Or Organization or organization. Schedule Persons or organizations that you are obligated,pursuant to a contract or agreement,to provide with such insurance as is afforded by this policy. All other terms and conditions remain unchanged. Authorized Representative Liability Insurance Additional Insured-Scheduled Person Or Organization last page Form 80-02-2367(Rev.5-07) Endorsement Page 2 INSURED: Vavrinek, Trine, Day and Company, LLP L POLICY NO.: 36029324WCE Liability Insurance 1 r i. General Liability T y Table Of Contents Section Page No. Coverages 3 N Investigation, Defense And Settlements 4 T R . A Supplementary Payments 4 C T Coverage Territory 5 Who Is An Insured 5 Limits Of Insurance 9 Bodily Injury/Property Damage Exclusions 10 N, Advertising Injury/Personal Injury Exclusions 14 E!' R A Medical Expenses Exclusions 15 L Policy Exclusions 16 L I' A Conditions 20 B I' Definitions 25 L I' T Y Form 80-02-2000(Rev.401) contract Page 1 of 32 THIS PAGE INTENTIONALLY LEFT BLANK Form 80-02-2000(Rev.401) Contract Page 2 of 32 C H U B B® General Liability Contract Please read the entire policy carefully.The terms and conditions of this insurance include the various sections of this contract:Coverages;Investigation,Defense And Settlements; Supplementary Payments;Coverage Territory;Who Is An Insured;Limits Of Insurance; Exclusions;Conditions;and Definitions,as well as the Declarations,Common Policy Conditions and any Endorsements and Schedules made a part of this insurance. Throughout this contract the words"you"and"your"refer to the Named Insured shown in the Declarations and other persons or organizations qualifying as a Named Insured under this contract. The words"we,""us"and'bur"refer to the Company mp y providing this insurance. In addition to the Named Insured,other persons or organizations may qualify as insureds.Those persons or organizations and the conditions under which they qualify are identified in the Who Is An Insured section of this contract. Words and phrases that appear in bold print have special meanings and are defined in the Definitions section of this contract. Coverages Bodily Injury And Property Subject to all of the terms and conditions of this insurance,we will pay damages that the insured Damage Liability becomes legally obligated to pay by reason of liability: Coverage 0 imposed by law;or • assumed in an insured contract; for bodily injury or property damage caused by an occurrence to which this coverage applies. This coverage applies only to such bodily injury or property damage that occurs during the policy period. Damages for bodily injury include damages claimed by a person or organization for care or loss of services resulting at any time from the bodily injury. Other than as provided under the Investigation,Defense And Settlements and Supplementary Payments sections of this contract,we have no other obligation or liability to pay sums or perform acts or services under this coverage. I Advertising Injury And Subject to all of the terms and conditions of this insurance,we will pay damages that the insured Personal Injury Liability becomes legally obligated to pay by reason of liability: Coverage imposed by law;or • assumed in an insured contract; for advertising injury or personal injury to which this coverage applies. This coverage applies only to such advertising injury or personal injury caused by an offense that is first committed during the policy period. Other than as provided under the Investigation,Defense And Settlements and Supplementary Payments sections of this contract,we have no other obligation or liability to pay sums or perform acts or services under this coverage. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 3 of 32 Coverages (continued) Medical Expenses Subject to all of the terms and conditions of this insurance,we will pay medical expenses for Coverage bodily injury caused by an accident to which this coverage applies: • that takes place on premises rented to or owned by you;or • in connection with your operations; provided that such: • accident occurs during the policy period; • expenses are incurred and reported to us within three(3)years of the date of the accident; and • person who sustained such bodily injury submits to examination,at our expense,by physicians of our choice as often as we reasonably require. We will make these payments regardless of fault. We have no other obligation or liability under this coverage. Investigation, Defense Subject to all of the terms and conditions of this insurance,we will have the right and duty to And Settlements defend the insured against a suit,even if such suit is false,fraudulent or groundless. If such a suit is brought,we will pay reasonable attorney fees and necessary litigation expenses to defend: • the insured;and • if applicable,the indemnittee of the insured,provided the obligation to defend,or the cost of the defense of,such indemnittee has been assumed by such insured in an insured contract Such attorney fees and litigation expenses will be paid as described in the Supplementary Payments section of this contract. We have no duty to defend any person or organization against any suit seeking damages to which this insurance does not apply. We may,at our discretion,investigate any occurrence or offense and settle any claim or suit Our duty to defend any person or organization ends when we have used up the applicable Limit Of Insurance. Supplementary Subject to all of the terms and conditions of this insurance,we will pay,with respect to a claim we Payments investigate or settle,or a suit against an insured we defend: A. the expenses we incur. B. the cost of: 1. bail bonds;or 2. bonds required to: a. appeal judgments;or Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 4 of 32 C H U B B® General Liability Supplementary b. release attachments; Payments but only for bond amounts within the available Limit Of Insurance.We do not have to (continued) furnish these bonds. C. reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of such claim or suit,including actual loss of earnings up to$1000 a day because of time off from work. D. costs taxed against the insured in the suit,except any: 1. attorney fees or litigation expenses;or 2. other loss,cost or expense; in connection with any injunction or other equitable relief. E. prejudgment interest awarded against the insured on that part of a judgment we pay.If we make an offer to pay the applicable Limit Of Insurance,we will not pay any prejudgment interest based on that period of time after the offer. F. interest on the full amount of a judgment that accrues after entry of the judgment and before we have paid,offered to pay or deposited in court the part of the judgment that is within the applicable Limit Of Insurance. Supplementary Payments does not include any fine or other penalty. These payments will not reduce the Limits Of Insurance. Our obligation to make these payments ends when we have used up the applicable Limit Of Insurance. Coverage Territory This insurance applies anywhere,provided the insured's responsibility to pay damages,to which this insurance applies,is determined in a suit on the merits brought in the United States of America (including its possessions and territories),Canada or Puerto Rico,or in a settlement to which we agree. Who Is An Insured Sole Proprietorships If you are an individual,you and your spouse are insureds;but you and your spouse are insureds only with respect to the conduct of a business of which you are the sole owner. If you die: • persons or organizations having proper temporary custody of your property are insureds;but they are insureds only with respect to the maintenance or use of such property and only for acts until your legal representative has been appointed;and • your legal representatives are insureds;but they are insureds only with respect to their duties as your legal representatives.Such legal representatives will assume your rights and duties under this insurance. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 5 of 32 Who Is An Insured (continued) Partnerships Or Joint If you are a partnership(including a limited liability partnership)or a joint venture,you are an Ventures insured.Your members,your partners and their spouses are insureds;but they are insureds only with respect to the conduct of your business. Limited Liability If you are a limited liability company,you are an insured.Your members and their spouses are Companies insureds;but they are insureds only with respect to the conduct of your business.Your managers are insureds;but they are insureds only with respect to their duties as your managers. Other Organizations If you are an organization(including a professional corporation)other than a partnership,joint venture or limited liability company,you are an insured.Your directors and officers are insureds; but they are insureds only with respect to their dudes as your directors or officers.Your stockholders and their spouses are insureds;but they are insureds only with respect to their liability as your stockholders. Employees Your employees are insureds;but they are insureds only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However,no employee is an insured for: A. bodily injury,advertising injury or personal injury: 1. to you,to any of your directors,managers,members,officers or partners(whether or not an employee)or to any co-employee while such injured person is either in the course of his or her employment or while performing duties related to the conduct of your business; 2. to the brother,child,parent,sister or spouse of such injured person as a consequence of any injury described in subparagraph A.1.above;or 3. for which there is any obligation to share damages with or repay someone else who must pay damages because of any injury described in subparagraphs A.1.or A.2. above. With respect to bodily injury only,this limitation does not apply to: • you or to your directors,managers,members,officers,partners or supervisors as insureds;or • your employees,as insureds,with respect to such damages caused by cardio- pulmonary resuscitation or fast aid services administered by such an employee;or B. property damage to any property owned,occupied or used by you or by any of your directors,managers,members,officers or partners(whether or not an employee)or by any of your employees. This limitation does not apply to property damage to premises while rented to you or temporarily occupied by you with permission of the owner. Liability Insurance Form 60-02-2000(Rev.4-01) Contract Page 6 of 32 C H U B B® General Liability Who Is An Insured (continued) Volunteers Persons who are volunteer workers for you are insureds;but they are insureds only for acts within the scope of their activities for you and at your direction. Real Estate Managers Persons(other than your employees)or organizations acting as your real estate managers are insureds;but they are insureds only with respect to their duties as your real estate managers. Permissive Users Of With respect to mobile equipment registered in your name under a motor vehicle registration law: Mobile Equipment A. persons driving such public road with our permission are insureds;and equipment on a y B. persons or organizations responsible for the conduct of such persons described in subparagraph A.above are insureds;but they are insureds only with respect to the operation of the equipment and only if no other insurance of any kind is available to them However,no person or organization is an insured with respect to: • bodily injury to any co-employee of the person driving the equipment;or • property damage to any property owned or occupied by or loaned or rented to you,or in your charge or the charge of the employer of any person who is an insured under this provision. Vendors Persons or organizations who are vendors of your products are insureds;but they are insureds only with respect to their liability for damages for bodily injury or property damage resulting from the distribution or sale of your products in the regular course of their business and only if this insurance applies to the products-completed operations hazard. However,no such person or organization is an insured with respect to any: • assumption of liability by them in a contract or agreement.This limitation does not apply to the liability for damages for bodily injury or property damage that such vendor would have in the absence of such contract or agreement; • representation or warranty unauthorized by you; • physical or chemical change in your products made intentionally by the vendor; • repackaging,unless unpacked solely for the purpose of inspection,demonstration or testing, or the substitution of parts under instruction from the manufacturer and then repacked in the original container; • failure to make such inspections,adjustments,tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business in connection with the distribution or sale of your products; • demonstration,installation,servicing or repair operations,except such operations performed at the vendor's premises in connection with the sale of your products;or • of your products which,after distribution or sale by you,have been labeled or relabeled or used as a container,ingredient or part of any other thing or substance by or for the vendor. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 7 of 32 Who Is An Insured Vendors Further,no person or organization from whom you have acquired your products,or any container, (continued) ingredient or part entering into,accompanying or containing your products,is an insured under this provision. Lessors Of Equipment Persons or organizations from whom you lease equipment are insureds;but they are insureds only with respect to the maintenance or use by you of such equipment and only if you are contractually obligated to provide them with such insurance as is afforded by this contract. However,no such person or organization is an insured with respect to any: • damages arising out of their sole negligence;or • occurrence that occurs,or offense that is committed,after the equipment lease ends. Lessors Of Premises Persons or organizations from whom you lease premises are insureds;but they are insureds only with respect to the ownership,maintenance or use of that particular part of such premises leased to you and only if you are contractually obligated to provide them with such insurance as is afforded by this contract. However,no such person or organization is an insured with respect to any: • damages arising out of their sole negligence; • occurrence that occurs,or offense that is committed,after you cease to be a tenant in the premises;or • structural alteration,new construction or demolition operations performed by or on behalf of them Subsidiary Or Newly If there is no other insurance available,the following organizations will qualify as named insureds: Acquired Or Formed 0 a subsidiary organization of the first named insured shown in the Declarations of which,at Organizations the beginning of the policy period and at the time of loss,such first named insured controls, either directly or indirectly,more than fifty(50)percent of the interests entitled to vote generally in the election of the governing body of such organization;or • a subsidiary organization of the first named insured shown in the Declarations that such first named insured acquires or forms during the policy period,if at the time of loss such first named insured controls,either directly or indirectly,more than fifty(50)percent of the interests entitled to vote generally in the election of the governing body of such organization. Limitations On Who Is An A. Except to the extent provided under the Subsidiary Or Newly Acquired Or Formed Insured Organizations provision above,no person or organization is an insured with respect to the conduct of any person or organization that is not shown as a named insured in the Declarations. B. No person or organization is an insured with respect to the: 1. ownership,maintenance or use of any assets;or 2. conduct of any person or organization whose assets,business or organization; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 8 of 32 C H U B Be General Liability Who Is An Insured Limitations On Who Is An you acquire,either directly or indirectly,for any: Insured 0 bodily injury or property damage that occurred;or (continued) • advertising injury or personal injury arising out of an offense first committed; in whole or in part,before you,directly or indirectly,aquired such assets,business or organization. Limits Of Insurance The Limits Of Insurance shown in the Declarations and the rules below fix the most we will pay, regardless of the number of: • insureds; • claims made or suits brought;or • persons or organizations making claims or bringing suits. The Limits Of Insurance apply separately to each consecutive annual period and to any re period of less than twelve(12)months,starting with the beginning of the policy period shown in the Declarations,unless the policy period is extended after issuance for an additional period of less than twelve(12)months.In that case,the additional period will be deemed part of the last preceding period for purposes of determining the Limits Of Insurance. General Aggregate Limit Subject to the Each Occurrence Limit,the General Aggregate Limit is the most we will pay for the sum of: • damages for bodily injury and property damage,except damages included in the products-completed operations hazard;and • medical expenses. Products-Completed Subject to the Each Occurrence Limit,the Products-Completed Operations Aggregate Limit is the Operations Aggregate most we will pay for the sum of damages for bodily injury and property damage included in the Limit products-completed operations hazard. Advertising Injury And The Advertising Injury And Personal Injury Aggregate Limit is the most we will pay for the sum of Personal Injury Aggregate damages for advertising injury and personal injury. Limit Each Occurrence Limit The Each Occurrence Limit is the most we will pay for the sum of: • damages for bodily injury and property damage;and • medical expenses; arising out of any one occurrence. Any amount paid for damages or medical expenses will reduce the amount of the applicable aggregate limit available for any other payment. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 9 of 32 Limits Of Insurance Each Occurrence Limit If the applicable aggregate limit has been reduced to an amount that is less than the Each (continued) Occurrence Limit,the remaining amount of such aggregate limit is the most that will be available for any other payment. Damage To Premises Subject to the Each Occurrence Limit,the Damage To Premises Rented To You Limit is the most Rented To You Limit we will pay for the sum of damages for property damage to any one premises while rented to you or temporarily occupied by you with permission of the owner. Medical Expenses Limit Subject to the Each Occurrence Limit,the Medical Expenses Lin-At is the most we will pay for the sum of medical expenses,under Medical Expenses coverage,for bodily injury sustained by any one person. Bodily Injury/Property None of the following exclusions,except"Contracts",'Expected Or Intended Injury"and"Loss In Damage Exclusions Progress",apply to property damage to premises while rented to you or temporarily occupied by you with permission of the owner. Aircraft,Autos Or This insurance does not apply to bodily injury or property damage arising out of the ownership, Watercraft maintenance,use(use includes operation and loading or unloading)or entrustment to others of any: aircraft; • auto;or • watercraft; owned or operated by or loaned or rented to any insured. This exclusion does not apply to: A. a watercraft while ashore on premises owned by or rented to you; B. a watercraft you do not own,provided that it: 1. is less than fifty-five(55)feet long;and 2. does not transport persons or cargo for a charge; C. the parking of an auto on premises owned by or rented to you,provided the auto is not owned by or loaned or rented to you or the insured, D. the liability for damages assumed in an insured contract resulting from the ownership, maintenance or use,by others,of an aircraft or watercraft; E. the operation of the equipment described in subparagraphs F.2.or F.3.of the definition of mobile equipment;or F. an aircraft you do not own,provided that: 1. the pilot in command holds a currently effective certificate,issued by the duly constituted authority of the United States of America or Canada,designating that person as a commercial or airline transport pilot; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 10 of 32 C H U ass General Liability Bodily Injury/Property Damage Exclusions Aircraft,Autos Or 2. it is rented with a trained,paid crew;and Watercraft 3. it does not transport persons or cargo for a charge (continued) Alcoholic Beverage Type This insurance does not apply to bodily injury or property damage for which any insured may be Businesses held liable by reason of: • causing or contributing to the intoxication of any person; • furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol;or • any statute,ordinance or regulation relating to the sale,gift,distribution or use of alcoholic beverages. This exclusion applies only if you are in the business of manufacturing,distributing,selling,serving or furnishing alcoholic beverages. Contracts This insurance does not apply to bodily injury or property damage for which the insured is obligated to pay damages by reason of assumption of liability in a contract or agreement. This exclusion does not apply to the liability for damages: • that such insured would have in the absence of such contract or agreement;or • assumed in an oral or written contract or agreement that is an insured contact,provided the bodily injury or property damage,to which this insurance applies,occurs after the execution of such contract or agreement. Damage TO Alienated This insurance does not apply to property damage to any premises you sell,give away or abandon, Premises if the property damage arises out of any part of those premises. This exclusion does not apply if the premises are your work and were never occupied,rented or held for rental by you. Damage To Impaired This insurance does not apply to property damage to: Property Or Property Not impaired property;or Physically Injured • property that has not been physically injured; arising out of any: • defect,deficiency,inadequacy or dangerous condition in your product or your work;or Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 11 of 32 Bodily InjuredWropedy Damage Exclusions Damage To Impaired delay or failure by you or anyone acting on your behalf to perform a contract or agreement in Property Or Properly Not accordance with its terms and conditions. Physically Injured This exclusion does not apply to the loss of use of other tangible property resulting from sudden and (continued) accidental physical injury to your product or your work after it has been put to its intended use. Damage To Owned This insurance does not apply to property damage to any property owned by you. Property Damage To Various This insurance does not apply to property damage to any: Properly Of Others(Care, Control Or Custody) Personal property loaned or rented to you; • property held by you or on your behalf for sale or entrusted to you for safekeeping or storage; • property on your premises for purposes of performing operations on such property by you or on your behalf; • tools or equipment used by you or on your behalf in performing operations;or • property in your care,control or custody that will be erected,installed or used in construction operations by you or on your behalf. This exclusion does not apply to the liability for damages assumed in a sidetrack agreement. Damage To Your Product This insurance does not apply to property damage to your product arising out of it or any part of it. Damage To Your Work This insurance does not apply to property damage to your work arising out of it or any part of it and included in the products-completed operations hazard. This exclusion does not apply if the damaged work or the work causing the damage was performed on your behalf by a subcontractor. Employer's Liability A. This insurance does not apply to bodily injury to an employee of the insured arising out of and in the course of.- 1. employment by the insured;or 2. performing duties related to the conduct of the insured's business. B. This insurance does not apply to bodily injury to the brother,child,parent,sister or spouse of such employee as a consequence of any injury described in paragraph A.above. This exclusion applies: • whether the insured may be liable as an employer or in any other capacity;and • to any obligation to share damages with or repay someone else who must pay damages because of any injury described in paragraphs A.or B.above. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 12 of 32 C H U B B® General Liability Bodily Injured/Property Damage Exclusions Employer's Liability This exclusion does not apply to the liability for damages assumed by the insured in an insured (continued) contract. Expected Or Intended This insurance does not apply to bodily injury or property damage arising out of an act that: Injury 0 is intended by the insured;or • would be expected from the standpoint of a reasonable person in the circumstances of the Insured; to cause bodily injury or property damage,even if the actual bodily injury or property damage is of a different degree or type than intended or expected. This exclusion does not apply to bodily injury or property damage resulting from the use of reasonable force to protect persons or tangible property. Loss In Progress This insurance does not apply to bodily injury or property damage that is a change,continuation or resumption of any bodily injury or property damage known by you,prior to the beginning of the policy period,to have occurred. Bodily injury or property damage will be deemed to be known by you: A. if such injury or damage is known by,or should have been known from the standpoint of a reasonable person in the circumstances of, 1. you; 2. any of your directors,managers,members,officers(or their designees)or partners (whether or not an employee);and B. when any person described in paragraph A.above: 1. reports all,or any part,of any such injury or damage to us or any other insurer; 2. receives a claim or a demand for damages because of any such injury or damage;or 3. becomes aware that any such injury or damage has occurred or has begun to occur. Mobile Equipment This insurance does not apply to bodily injury or property damage arising out of the Transportation transportation of mobile equipment by an auto owned or operated by or loaned or rented to any insured. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 13 of 32 Advertising Injury/Personal Injury Exclusions Breach Of Contract This insurance does not apply to advertising injury or personal injury arising out of breach of contract. Continuing Offenses This insurance does not apply to advertising injury or personal injury that arises out of that part of an offense that continues or resumes after the later of the end of the policy period of. A. this insurance;or B. a subsequent,continuous renewal or replacement of this insurance,that: 1. is issued to you by us or by an affiliate of ours; 2. remains in force while the offense continues;and 3. would otherwise apply to advertising injury and personal injury. Contracts This insurance does not apply to advertising injury or personal injury for which the insured is obligated to pay damages by reason of assumption of liability in a contract or agreement. This exclusion does not apply to the liability for damages: • that such insured would have in the absence of such contract or agreement;or • assumed in a written contract or agreement that is an insured contract,provided the advertising injury or personal injury,to which this insurance applies,is caused by an offense first committed after the execution of such contract or agreement. Crime Or Fraud This insurance does not apply to advertising injury or personal injury arising out of any criminal or fraudulent conduct committed by or with the consent or knowledge of the insured. Expected Or Intended This insurance does not apply to advertising injury or personal injury arising out of an offense, Injury committed by or on behalf of the insured,that: • is intended by such insured;or • would be expected from the standpoint of a reasonable person in the circumstances of such insured; to cause injury. Failure To Conform To This insurance does not apply to advertising injury or personal injury arising out of the failure of Representations Or goods,products or services to conform with any electronic,oral,written or other representation or Warranties warranty of durability,fitness,performance,quality or use. Internet Activities This insurance does not apply to advertising injury or personal injury arising out of: • controlling,creating,designing or developing of another's Internet site; Liability Insurance Form 80-02-2000(Rev.4-01) contract Page 14 of 32 C H U B B® General Liability Advertising In jury/Personal Injury Exclusions Internet Activities 0 controlling,creating,designing,developing,determining or providing the content or material (continued) of anther's Internet site; • controlling,facilitating or providing,or failing to control,facilitate or provide,access to the Internet or another's Internet site;or • publication of content or material on or from the Internet,other than material developed by you or at your direction. in injury r ersonal in' arising out of an offense Media Type Businesses This insurance does not apply to advertising � ry o p ,fury g committed by or on behalf of an insured whose business is advertising,broadcasting,cablecasting, publishing,telecasting or telemarketing. This exclusion does not apply to personal injury caused by an offense described in subparagraphs A.,B.or C.of the definition of personal injury. Prior Offenses This insurance does not apply to advertising Injury or personal injury arising out of any offense first committed before the beginning of the policy period. Publications With This insurance does not apply to advertising injury or personal injury arising out of any Knowledge Of Falsity electronic,oral,written or other publication of content or material by or with the consent of the insured: • with knowledge of its falsity;or • if a reasonable person in the circumstances of such insured would have known such content or material to be false. Wrong Description This insurance does not apply to advertising injury or personal injury arising out of any wrong Of Prices description of the price of goods,products or services. E Medical Expenses Exclusions Athletic Activities This insurance does not apply to medical expenses arising out of bodily injury to any person injured while taking part in athletics. Injury To Insureds This insurance does not apply to medical expenses arising out of a bodily injury to any insured, except a volunteer worker. Liability Insurance Form 8042-2000(Rev.4-01) Contract Page 15 of 32 Medical Expenses Exclusions (continued) Nuclear Energy This insurance does not apply to medical expenses arising out of bodily injury in any way related to the: • nuclear hazardous properties of nuclear material;and • operation of a nuclear facility by any person or organization. Products-Completed This insurance does not apply to medical expenses arising out of bodily injury included in the Operations Hazard products-completed operations hazard. Workers'Compensation This insurance does not apply to medical expenses arising out of bodily injury to any person, Or Similar Laws whether or not an employee of any insured,if benefits for such bodily injury are payable or must be provided under any workers'compensation,disability benefits or unemployment compensation law or any similar law. Policy Exclusions Asbestos A. This insurance does not apply to bodily injury,property damage,advertising injury or personal injury arising out of the actual,alleged or threatened contaminative,pathogenic, toxic or other hazardous properties of asbestos. B. This insurance does not apply to any loss,cost or expense arising out of any: 1. request,demand,order or regulatory or statutory requirement that any insured or others test for,monitor,clean up,remove,contain,treat,detoxify or neutralize,or in any way respond to,or assess the effects of asbestos;or 2. claim or proceeding by or on behalf of a governmental authority or others for damages because of testing for,monitoring,cleaning up,removing,containing,treating, detoxifying or neutralizing,or in any way responding to,or assessing the effects of asbestos. Employment-Related A. This insurance does not apply to any damages sustained at any time by any person,whether Practices or not sustained in the course of employment by any insured,arising out of any employment-related act,omission,policy,practice or representation directed at such person, occurring in whole or in part at any time,including any: 1. arrest,detention or imprisonment; 2. breach of any express or implied covenant; 3. coercion,criticism,humiliation,prosecution or retaliation; 4. defamation or disparagement; 5. demotion,discipline,evaluation or reassignment; 6. discrimination,harassment or segregation; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 16 of 32 C H U B Be General Liability Policy Exclusions Employment-Related 7. a. eviction;or Practices b. invasion or other violation of any right of occupancy; (continued) 8. failure or refusal to advance,compensate,employ or promote; 9. invasion or other violation of any right of privacy or publicity; 10. termination of employment;or 11. other employment-related act,omission,policy,practice,representation or relationship in connection with any insured at any time. B. This insurance does not apply to any damages sustained at any time by the brother,child, parent,sister or spouse of such person at whom any employment-related act,omission, policy,practice or representation is directed,as described in paragraph A.above,as a consequence thereof. This exclusion applies: • whether the insured may be liable as an employer or in any other capacity;and • to any obligation to share damages with or repay someone else who must pay damages because of any of the foregoing. Enhancement, This insurance does not apply to any loss,cost or expense incurred by you or others for any: Maintenance Or Prevention A. enhancement or maintenance of any property;or Expenses B. prevention of any injury or damage to any: 1. person or organization;or 2. property you own,rent or occupy. Intellectual Property Laws This insurance does not apply to any actual or alleged bodily injury,property damage, Or Rights advertising injury or personal injury arising out of,giving rise to or in any way related to any actual or alleged: • assertion;or • infringement or violation; by any person or organization(including any insured)of any intellectual property law or right, regardless of whether this insurance would otherwise apply to all or part of any such actual or alleged injury or damage in the absence of any such actual or alleged assertion,infringement or violation. This exclusion applies,unless such injury: • is caused by an offense described in the definition of advertising injury;and • does not arise out of,give rise to or in any way relate to any actual or alleged assertion, infringement or violation of any intellectual property law or right,other than one described in the definition of advertising injury. I Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 17 of 32 Policy Exclusions (continued) Nuclear Energy A. This insurance does not apply to bodily injury,nuclear property damage,advertising injury or personal injury: 1. with respect to which any insured under this policy also has status as an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association,Mutual Atomic Energy Liability Underwriters,Nuclear Insurance Association of Canada or any of their successors,or would have had status as an insured under any such policy but for its termination upon exhaustion of its limit of insurance;or 2. arising out of the nuclear hazardous properties of nuclear material and with respect to which: a. any person or organization is required to maintain financial protection pursuant to the United States of America Atomic Energy Act of 1954,or any law amendatory thereof;or b. the insured is,or had this policy not been issued would be,entitled to indemnity from the United States of America,or any agency thereof,under any agreement entered into by the United States of America,or any agency thereof, with any person or organization. B. This insurance does not apply to bodily injury,nuclear property damage,advertising injury or personal injury arising out of the nuclear hazardous properties of nuclear material: 1. if the nuclear material: a. is at any nuclear facility owned by,or operated by or on behalf of,any insured; b. has been discharged or dispersed therefrom;or C. is contained in nuclear spent fuel or nuclear waste at any time transported, handled stored,disposed of,processed,treated,possessed or used by or on behalf of any insured;or 2. in any way related to the famishing by any insured of services,materials,parts or equipment in connection with the planning,construction,maintenance,operation or use of any nuclear facility.But if such facility is located within the United States of America(including its possessions or territories)or Canada,this subparagraph 2. applies only to nuclear property damage to such nuclear facility and any property thereat. Pollution A. This insurance does not apply to bodily injury,property damage,advertising injury or personal injury arising out of the actual,alleged or threatened discharge,dispersal,seepage, migration,release or escape of pollutants: 1. at or from any premises,site or location which is or was at any time owned or occupied by,or loaned or rented to,any insured; 2. at or from any premises,site or location which is or was at any time used by or for any insured or others for the handling,storage,disposal,processing or treatment of waste; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 18 of 32 C H U B B® General Liability Policy Exclusions Pollution 3. which are or were at any time transported,handled,stored,disposed of,processed or (continued) treated as waste by or for any: a. insured;or b. person or organization for whom any insured may be legally responsible;or 4. at or from any premises,site or location on which any insured or any contractor or subcontractor working directly or indirectly on any insured's behalf is performing operations,if the: a. pollutants are brought on or to the premises,site or location in connection with such operations by such insured,contractor or subcontractor;or b. operations are to test for,monitor,clean up,remove,contain,treat,detoxify or neutralize,or in any way respond to,or assess the effects of pollutants. Subparagraph A.4.a.above does not apply to bodily injury or property damage caused by the escape of fuels,lubricants or other operating fluids which are needed to perform the normal electrical,hydraulic or mechanical functions necessary for the operation of mobile equipment or its parts,if such operating fluids escape directly from that particular put of such mobile equipment designed by its manufacturer to hold,store or receive them But,this exception does not apply if such bodily injury or property damage arises out of any discharge,dispersal,seepage,migration,release or escape of pollutants,that: • was intended by the insured; • would have been expected from the standpoint of a reasonable person in the circumstances of the insured; • was a necessary part of operations performed by any insured,contractor or subcontractor;or • occurred during the process of fueling the mobile equipment or changing or replenishing any operating fluid. Subparagraph A.4.a.above does not apply to bodily injury or property damage if sustained within a building and caused by the release of gaseous irritants or contaminants from materials brought into that building,in connection with the operations being performed by you or on your behalf by the contractor or subcontractor. Subparagraph A.1.above does not apply to bodily injury if sustained within a building and caused by the escape of gaseous irritants or contaminants from equipment used to heat that building. Subparagraphs A.1.and A.4.a.above do not apply to bodily injury or property damage caused by heat,smoke or fumes from a hostile tire. B. This insurance does not apply to any loss,cost or expense arising out of any: 1. request,demand,order or regulatory or statutory requirement that any insured or others test for,monitor,clean up,remove,contain,treat,detoxify or neutralize,or in any way respond to,or assess the effects of pollutants;or Liability Insurance Form 80.02-2000(Rev.4-01) contract Page 19 of 32 Policy Exclusions Pollution 2. claim or proceeding by or on behalf of a governmental authority or others for damages (continued) because of testing for,monitoring,cleaning up,removing,containing,treating, detoxifying or neutralizing,or in any way responding to,or assessing the effects of pollutants. Paragraph B.above does not apply to the liability for damages,for property damage,that the insured would have in the absence of such request,demand,order or regulatory or statutory requirement,or such claim or proceeding by or on behalf of a governmental authority. This exclusion does not apply to the liability for damages,for property damage,to premises while rented to you or temporarily occupied by you with permission of the owner and caused by a hostile fire,explosion,smoke or leakage from fire protective equipment. This exclusion applies regardless of whether or not the pollution was accidental,expected,gradual, intended,preventable or sudden. Recall Of Products, Work This insurance does not apply to any damages claimed for any loss,cost or expense incurred by you Or Impaired Property or others for the loss of use,withdrawal,recall,inspection,repair,replacement,adjustment, removal or disposal of. • your product; • your work;or • impaired property; if such product,work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect,deficiency,inadequacy or dangerous condition in it. Workers'Compensation This insurance does not apply to any obligation of the insured under any workers'compensation, Or Similar Laws disability benefits or unemployment compensation law or any similar law. Conditions Arbitration We are entitled to exercise all of the insured's rights in the choice of arbitrators and in the conduct of any arbitration proceeding,except when the proceeding is between us and the insured. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this insurance. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 20 of 32 C H U B B® General Liability Conditions (continued) Disclosures And We have issued this insurance: Representations 0 based upon representations you made to us;and • in reliance upon your representations. Unintentional failure of an employee of the insured to disclose a hazard or other material information will not violate this condition,unless an officer(whether or not an employee)of any insured or an officer's designee knows about such hazard or other material information. Duties In The Event Of A. You must see to it that we and any other insurers are notified as soon as practicable of any Occurrence, Offense, occurrence or offense that may result in a claim,if the claim may involve us or such other Claim Or Suit insurers.To the extent possible,notice should include: 1. how,when and where the occurrence or offense happened; 2. the names and addresses of any injured persons and witnesses;and 3. the nature and location of any injury or damage arising out of the occurrence or offense. B. If a claim is made or suit is brought against any insured,you must: 1. immediately record the specifics of the claim or suit and the date received; 2. notify us and other insurers as soon as practicable,and 3. see to it that we receive written notice of the claim or suit as soon as practicable. C. You and any other involved insured must: 1. immediately send us copies of any demands,notices,summonses or legal papers received in connection with the claim or suit; 2. authorize us to obtain records and other information; 3. cooperate with us and other insurers in the: a. investigation or settlement of the claim;or b. defense against the suit;and 4. assist us,upon our request,in the enforcement of any right against any person or organization that may be liable to the insured because of loss to which this insurance may also apply. D. No insureds will,except at that insured's own cost,make any payment,assume any obligation or incur any expense,other than for first aid,without our consent. E. Notice given by or on behalf of- 1. the insured; 2. the injured person;or 3. any other claimant; to a licensed agent of ours with particulars sufficient to identify the insured shall be deemed notice to us. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 21 of 32 Conditions Duties In The Event Of F. Knowledge of an occurrence or offense by an agent or employee of the insured will not Occurrence, Offense, constitute knowledge by the insured,unless an officer(whether or not an employee)of any Claim Or Suit insured or an officer's designee knows about such occurrence or offense. (continued) G. Failure of an agent or employee of the insured,other than an officer(whether or not an employee)of any insured or an officer's designee,to notify us of an occurrence or offense that such person knows about will not affect the insurance afforded to you. H. If a claim or loss does not reasonably appear to involve this insurance,but it later develops into a claim or loss to which this insurance applies,the failure to report it to us will not violate this condition,provided the insured gives us immediate notice as soon as the insured is aware that this insurance may apply to such claim or loss. Legal Action Against Us No person or organization has a right under this insurance to: • join us as a party or otherwise bring us into a suit seeking damages from an insured;or • sue us on this insurance unless all of the terms and conditions of this insurance have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured obtained after an actual: • trial in a civil proceeding;or • arbitration or other alternative dispute resolution proceeding; but we will not be liable for damages that are not payable under the terms and conditions of this insurance or that are in excess of the applicable Limits Of Insurance. Other Insurance If other valid and collectible insurance is available to the insured for loss we would otherwise cover under this insurance,our obligations are limited as follows. Primary Insurance This insurance is primary except when the Excess Insurance provision described below applies. If this insurance is primary,our obligations are not affected unless any of the other insurance is also primary.Then,we will share with all that other insurance by the method described in the Method of Sharing provision described below. Excess Insurance This insurance is excess over any other insurance,whether primary,excess,contingent or on any other basis: A. that is Fire,Extended Coverage,Builder's Risk,Installation Risk or similar insurance for your work; B. that is insurance that applies to property damage to premises rented to you or temporarily occupied by you with permission of the owner; C. if the loss arises out of aircraft,autos or watercraft(to the extent not subject to the Aircraft, Autos Or Watercraft exclusion); Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 22 of 32 C H U B B® General Liability Conditions Other Insurance D. that is insurance: (continued) 1. provided to you by any person or organization working under contract or agreement for you;or 2. under which you are included as an insured;or E. that is insurance under any Property section of this policy. When this insurance is excess,we will have no duty to defend the insured against any suit if any other insurer has a duty to defend such insured against such suit.If no other insurer defends,we will undertake to do so,but we will be entitled to the insured's rights against all those other insurers. When this insurance is excess over other insurance,we will pay only our share of the amount of loss,if any,that exceeds the sum of the total: • amount that all other insurance would pay for loss in the absence of this insurance;and • of all deductible and self-insured amounts under all other insurance. We will share the remaining loss,if any,with any other insurance that is not described in this Excess Insurance provision and was not negotiated specifically to apply in excess of the Limits Of Insurance shown in the Declarations of this insurance. Method of Sharing If all of the other insurance permits contribution by equal shares,we will follow this method also. Under this method each insurer contributes equal amounts until it has paid its applicable limits of insurance or none of the loss remains,whichever comes first. If any of the other insurance does not permit contribution by equal shares,we will contribute by limits.Under this method,each insurer's share is based on the ratio of its applicable limits of insurance to the total applicable limits of insurance of all insurers. Premium Audit We will compute all premiums for this insurance in accordance with our rules and rates. In accordance with the Estimated Premiums section of the Premium Summary,premiums shown with an asterisk(*)are estimated premiums and are subject to audit. In addition to or in lieu of such designation in the Premium Summary,premiums may be designated as estimated premiums elsewhere in this policy.In that case,these premiums will also be subject to audit,and the second paragraph of the Estimated Premiums section of the Premium Summary will apply. Separation Of Insureds Except with respect to the Limits Of Insurance,and any rights or duties specifically assigned in this insurance to the first named insured,this insurance applies: • as if each named insured were the only named insured;and • separately to each insured against whom claim is made or suit is brought. Liability Insurance Form 8042-2000(Rev.4-01) contract Page 23 of 32 Conditions (continued) Transfer Or Waiver Of We will waive the right of recovery we would otherwise have had against another person or Rights Of Recovery organization,for loss to which this insurance applies,provided the insured has waived their rights Against Others of recovery against such person or organization in a contract or agreement that is executed before such loss. To the extent that the insured's rights to recover all or part of any payment made under this insurance have not been waived,those rights are transferred to us.The insured must do nothing after loss to impair them At our request,the insured will bring suit or transfer those rights to us and help us enforce them This condition does not apply to medical expenses. Liability Insurance Form 80.02-2000(Rev.4-01) Contract Page 24 of 32 C H U S B® General Liability Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Advertisement Advertisement means an electronic,oral,written or other notice,about goods,products or services, designed for the specific purpose of attracting the general public or a specific market segment to use such goods,products or services. Advertisement does not include any e-mail address,Internet domain name or other electronic address or metalanguage. Advertising Injury Advertising injury means injury,other than bodily injury,property damage or personal injury, sustained by a person or organization and caused by an offense of infringing,in that particular part of your advertisement about your goods,products or services,upon their: • copyrighted advertisement;or • registered collective mark,registered service mark or other registered trademarked name, slogan,symbol or title. Agreed Settlement Agreed settlement means a settlement and release of liability signed by us,the insured and the claimant or the claimant's legal representative. Asbestos Asbestos means asbestos in any form,including its presence or use in any alloy,by-product or other material or waste.Waste includes material to be recycled,reconditioned or reclaimed. Auto Auto means a land motor vehicle,trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment.But auto does not include mobile equipment. Bodily Injury Bodily injury means physical: • injury; • sickness;or • disease; sustained by a person,including resulting death,humiliation,mental anguish,mental injury or shock at any time.All such loss shall be deemed to occur at the time of the physical injury,sickness or disease that caused it. Employee Employee includes a leased worker.Employee does not include a temporary worker. Hostile Fire Hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be. Liability Insurance Form 8042-2000(Rev.4-01) Contract Page 25 of 32 Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS (continued) AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Impaired Property Impaired property means tangible property,other than your product or your work,that cannot be used or is less useful because: • it incorporates your product or your work that is known or thought to be defective, deficient,inadequate or dangerous;or • you have failed to fulfill the terms or conditions of a contract or agreement; if such property can be restored to use by: • the repair,replacement,adjustment or removal of your product or your work;or • your fulfilling the terms or conditions of the contract or agreement. Insured Insured means a person or an organization qualifying as an insured in the Who Is An Insured section of this contract. Insured Contract Insured contract: A. means: 1. a lease of premises; 2. a sidetrack agreement; 3. an easement or license agreement; 4. an obligation,as required by ordinance,to indemnify a municipality,except in connection with work for a municipality; 5. an elevator maintenance agreement;or 6. any other contract or agreement pertaining to your business(including an indemnification of a municipality in connection with work performed for such municipality)in which you assume the tort liability of another person or organization to pay damages,to which this insurance applies,sustained by a third person or organization. B. does not include that part of any contract or agreement that indemnifies an architect, engineer or surveyor for damages arising out of: 1. preparing,approving or failing to prepare or approve maps,drawings,opinions, reports,surveys,field orders,change orders,designs or specifications;or 2. giving directions or instructions,or failing to give them Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 26 of 32 C H U S B® General Liability Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS (continued) AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Intellectual Property Law Intellectual property law or right means any: Or Right 0 certification mark,copyright,patent or trademark(including collective or service marks), • right to,or judicial or statutory law recognizing an interest in,any trade secret or confidential or proprietary non-personal information; • other right to,or judicial or statutory law recognizing an interest in,any expression,idea, likeness,name,slogan,style of doing business,symbol,title,trade dress or other intellectual property;or • other judicial or statutory law concerning piracy,unfair competition or other similar practices. Leased Worker Leased worker means a person leased to a party by a labor leasing firm,in a contract or agreement between such party and the labor leasing firm,to perform duties related to the conduct of the parry's business.Leased worker does not include a temporary worker. Loading Or Unloading Loading or unloading: A. means the handling of property: 1. after it is moved from the place where it is accepted for movement into or onto an aircraft,auto or watercraft, 2. while it is in or on an aircraft,auto or watercraft;or 3. while it is being moved from an aircraft,auto or watercraft to the place where it is finally delivered. B. does not include the movement of property by means of a mechanical device,other than a hand truck,that is not attached to the aircraft,auto or watercraft. Medical Expenses Medical expenses means reasonable expenses for necessary: • first aid administered at the time of an accident; • medical,surgical,x-ray and dental services,including prosthetic devices;and • ambulance,hospital,professional nursing and funeral services. Mobile Equipment Mobile equipment means any of the following types of land vehicles,including any attached machinery or equipment: A. bulldozers,farm machinery,forklifts and other vehicles designed for use principally off public roads; B. vehicles maintained for use solely on premises owned by or rented to you; C. vehicles that travel on crawler treads; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 27 of 32 Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Mobile Equipment D. vehicles,whether self-propelled or not,maintained primarily to provide mobility to (continued) permanently mounted: 1. power cranes,shovels,loaders,diggers or drills;or 2. road construction or resurfacing equipment such as graders,scrapers or rollers; E. vehicles not described in subparagraphs A.,B.,C.or D.above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: 1. air compressors,pumps and generators,including spraying,welding,building cleaning,geophysical exploration,lighting and well servicing equipment;or 2. cherry pickers and similar devices used to raise or lower workers;and F. vehicles not described in subparagraphs A.,B.,C.or D.above maintained primarily for purposes other than the transportation of persons or cargo. Mobile equipment does not include self-propelled vehicles with the following types of permanently attached equipment,and such vehicles will be considered autos: 1. equipment designed primarily for: a. snow removal; b. road maintenance,but not construction or resurfacing;or C. street cleaning; 2. cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers;and 3. air compressors,pumps and generators,including spraying,welding,building cleaning,geophysical exploration,lighting and well servicing equipment. Nuclear Facility Nuclear facility means any: A. nuclear reactor; B. equipment or device designed or used for: 1. separating the isotopes of plutonium or uranium; 2. processing or utilizing nuclear spent fuel;or 3. handling,processing or packaging nuclear waste; C. equipment or device used for the processing,fabricating or alloying of nuclear material,if at any time the total amount of such material in the custody of the insured at the premises where such equipment or device is located consists of or contains more than: 1. twenty-five(25)grams of plutonium or uranium 233,or any combination thereof,or 2. two-hundred-fifty(250)grams of uranium 235;or Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 28 of 32 C H U B B® General Liability Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Nuclear Facility D. structure,basin,excavation,premises or place prepared or used for the storage or disposal of (continued) nuclear waste; and includes the site on which any of the foregoing is located,all operations conducted on such site and all premises used for such operations. Nuclear Hazardous Nuclear hazardous properties includes radioactive,toxic or explosive properties. Properties Nuclear Material Nuclear material means by-product material,source material or special nuclear material. By-product material,source material and special nuclear material have the meanings given them in the United States of America Atomic Energy Act of 1954 or in any law amendatory thereof. Nuclear Property Nuclear property damage includes all forms of radioactive contamination of property. Damage Nuclear Reactor Nuclear reactor means any apparatus designed or used to sustain nuclear fission in a self- supporting chain reaction or to contain a critical mass of fissionable material. I Nuclear Spent Fuel Nuclear spent fuel means any fuel element or fuel component,solid or liquid,which has been used or exposed to radiation in a nuclear reactor. Nuclear Waste Nuclear waste means any waste material: • containing nuclear material,other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its source material content;and • resulting from the operation by any person or organization of any nuclear facility described in subparagraphs A.or B.of the definition of nuclear facility. Occurrence Occurrence means an accident,including continuous or repeated exposure to substantially the same general harmful conditions. Officer Ofcer means a person holding any of the officer positions created by an organization's charter, constitution,by-laws or any other similar governing document. I' Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 29 of 32 Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS (continued) AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Personal Injury Personal injury means injury,other than bodily injury,property damage or advertising injury, caused by an offense of: A. false arrest,false detention or other false imprisonment; B. malicious prosecution; C. wrongful entry into,wrongful eviction of a person from or other violation of a person's right of private occupancy of a dwelling,premises or room that such person occupies,if committed by or on behalf of its landlord lessor or owner; D. electronic,oral,written or other publication of material that: 1. libels or slanders a person or organization(which does not include disparagement of goods,products,property or services);or 2. violates a person's right of privacy;or E. discrimination,harassment or segregation based on a person's age,color,national origin, race,religion or sex. Pollutants Pollutants means any solid,liquid,gaseous or thermal irritant or contaminant,including smoke, vapor,soot,fumes,acids,alkalis,chemicals and waste.Waste includes materials to be recycled, reconditioned or reclaimed. Products-Completed Products-completed operations hazard: Operations Hazard A. includes all bodily injury and property damage taking place away from premises owned or occupied by or loaned or rented to you and arising out of your product or your work, except: 1. products that are still in your physical possession;or 2. work that has not yet been completed or abandoned. Your work will be deemed completed when: • all of the work called for in your contract or agreement has been completed. • all of the work to be performed at the site has been completed,if your contract or agreement calls for work at more than one site. • that part of the work completed at a site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service,maintenance,correction,repair or replacement,but which is otherwise complete,will be treated as completed. B. does not include bodily injury or property damage arising out of: 1. the transportation of property,unless the injury or damage results from a condition in or on a vehicle not owned or operated by or loaned or rented to you and that condition was created by the loading or unloading of that vehicle by any insured; Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 30 of 32 C H U S B® General Liability Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Products-Completed 2. the existence of tools,uninstalled equipment or abandoned or unused materials;or Operations Hazard 3, products or operations for which the classification in our rules indicates that such products or (continued) operations are not subject to the Products-Completed Operations Aggregate Limit of insurance. Property Damage Property damage means: • physical injury to tangible property,including resulting loss of use of that property.All such loss of use shall be deemed to occur at the time of the physical injury that caused it;or • loss of use of tangible property that is not physically injured.All such loss of use shall be deemed to occur at the time of the occurrence that caused it. Tangible property does not include any software,data or other information that is in electronic form Suit Suit means a civil proceeding in which damages,to which this insurance applies,are sought.Suit includes an arbitration or other dispute resolution proceeding in which such damages are sought and to which the insured must submit or does submit with our consent. Temporary Worker Temporary worker means a person who is furnished to a party to substitute for a permanent employee on leave or to meet seasonal or short-term workload conditions. Your Product Your product: A. means any: 1. goods or products,other than real property,manufactured,sold,handled,distributed or disposed of by: a. you; b. others trading under your name;or C. a person or organization whose assets or business you have acquired;and 2. containers(other than vehicles),materials,parts or equipment furnished in connection with such goods or products. B. includes: 1. representations or warranties made at any time with respect to the durability,fitness, performance,quality or use of your product;and 2. the providing of or failure to provide instructions or warnings. C. does not include vending machines or other property loaned or rented to or located for the use of others but not sold. Liability Insurance Four►80-02-2000(Rev.4-01) Contract Page 31 of 32 Definitions WHEN USED WITH RESPECT TO INSURANCE UNDER THIS CONTRACT,WORDS (continued) AND PHRASES THAT APPEAR IN BOLD PRINT HAVE THE SPECIAL MEANINGS DESCRIBED BELOW: Your Work Your work: A. means any: 1. work or operations performed by: a. you or on your behalf;or b. a person or organization whose assets or business you have acquired;and 2. materials,parts or equipment furnished in connection with such work or operations. B. includes: 1. representations or warranties made at any time with respect to the durability,fitness, performance,quality or use of your work;and 2. the providing of or failure to provide instructions or warnings. Liability Insurance Form 80-02-2000(Rev.4-01) Contract Page 32 of 32 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 04 03 06 WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT - CALIFORNIA We have the right to recover our payments from anyone liable for an injury covered by this policy.We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) You must maintain payroll records accurately segregating the remuneration of your employees while engaged in the work described in the Schedule. The additional premium for this endorsement shall be 2 %of the California workers'compensation premium otherwise due on such remuneration. SCHEDULE PERSON OR ORGANIZATION JOB DESCRIPTION ANY PERSON OR ORGANIZATION FOR WHOM THE NAMED INSURED HAS AGREED BY WRITTEN CONTRACT TO FURNISH THIS WAIVER. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated.(The information below is required only when this endorsement is issued subsequent to preparation of the policy.) Endorsement Effective: 05/13/2018 Policy No. CA10003013181 Endorsement No. Insured: Vavrinek,Trine, Day and Company, LLP Premium $ INCL. Insurance Company EVEREST NATIONAL INSURANCE COMPANY Countersigned By -1998 by the Workers'Compensation Insurance Rating Bureau of California.All rights reserved. From the WCIRB's California Workers'Compensation Insurance Forms Manual-1999. C H U B B® Policy Conditions Endorsement Policy Period MAY 13,2018 TO MAY 13,2019 Effective Date MAY 13,2018 Policy Number 3602-93-24 WCE Insured VAVRINEY,TRINE,DAY AND COMPANY,LLP Name of Company FEDERAL INSURANCE COMPANY Date Issued FEBRUARY 22,2018 This Endorsement applies to the following forms: COMMON POLICY CONDITIONS The following changes are made as respects exposures in the state of California. Under Conditions,the provisions titled Cancellation and When We Do Not Renew are deleted and replaced by the following: Conditions Cancellation The first named insured may cancel this policy or any of its individual coverages at any time by sending us a written request or by returning the policy and stating when thereafter cancellation is to take effect. A. All Policies In Effect For 60 Days or Less If this policy has been in effect for less than 60 days and is not a renewal of a policy we have issued,we may cancel this policy or any of its individual coverages by mailing or delivering to the first named insured at the mailing address shown in the policy and to the producer of record,advance written notice of cancellation,stating the reason for cancellation and effective date of cancellation at least: 1. 20 days before the effective date of cancellation if we cancel for: a. nonpayment of premium;or b. discovery of fraud by: (1) any insured or his or her representative in obtaining this insurance;or Policy Conditions California Mandatory—Cancellation And Nonrenewal continued Fonn 80-02-9717(Rev.9-15) Endorsement Page 1 Conditions Cancellation (2) you or your representative in pursuing a claim under this policy. (continued) 2. 60 days before the effective date of cancellation if we cancel for any other reason. B. All Policies In Effect For More Than 60 Days 1. If this policy has been in effect for more than 60 days,or is a renewal of a policy we issued,we may cancel this policy or any of its individual coverages only upon the occurrence,after the effective date of the policy,of one or more of the following: a. Nonpayment of premium,including payment due on a prior policy we issued and due during the current policy term covering the same risks. b. Discovery of fraud or material misrepresentation by: (1) any insured or his or her representative in obtaining this insurance;or (2) you or your representative in pursing a claim under this policy. C. A judgment by a court or an administrative tribunal that you have violated a California or Federal law,having as one of its necessary elements an act which materially increases any of the risks insured against. d. Discovery of willful or grossly negligent acts or omissions,or of any violations of state laws or regulations establishing safety standards,by you or your representative,which materially increase any of the risks insured against. e. Failure by you or your representative to implement reasonable loss control requirements,agreed to by you as a condition of policy issuance,or which were conditions precedent to our use of a particular rate or rating plan,if that failure materially increases any of the risks insured against. f. A determination by the Commissioner of Insurance that the: (1) loss of,or changes in,our reinsurance covering all or part of the risk would threaten our financial integrity or solvency;or (2) continuation of the policy coverage would place us in violation of California law or the laws of the state where we are domiciled or threaten our solvency. g. A change by you or your representative in the activities or property of the commercial or industrial enterprise,which results in a materially added, increased or changed risk,unless the added,increased or changed risk is included in the policy. 2. We will mail or deliver advance written notice of cancellation,stating the reason for cancellation and effective date of cancellation to the first named insured at the mailing address shown on the policy and to the producer of record at least: a. 20 days before the effective date of cancellation if we cancel for a reason listed in B.La.or b.above;or b. 60 days before the effective date of cancellation if we cancel for any other reason listed in paragraph B.1. Policy Conditions California Mandatory-cancellation And Nonrenewal continued Form 80-02-9717(Rev.9-15) Endorsement Page 2 C H U B B® Policy Conditions Endorsement Effective Date MAY 13,2018 Policy Number 3602-93-24 WCE Conditions Cancellation C. Residential Property (continued) Thisprovision applies to coverage on real property which is used predominantly for P PP g P P�tY P Y residential purposes and consisting of not more than four dwelling units,and to coverage on tenants'household personal property in a residential unit,if such coverage is written under this policy: 1. If such coverage has been in effect for 60 days or less,and is not a renewal of coverage we issued,we may cancel this coverage for any reason,except as provided in 2.and 3.below. 2. We may not cancel such coverage solely because the first named insured has: a. accepted an offer of earthquake coverage;or b. cancelled or did not renew a policy issued by the California Earthquake Authority(CEA) that included an earthquake policy premium surcharge. However,we shall cancel this policy if the first named insured has accepted a new or renewal policy issued by the CEA that includes an earthquake policy premium surcharge but fails to pay the earthquake policy premium surcharge authorized by the CEA. 3. We may not cancel such coverage solely because corrosive soil conditions exist on the premises.This restriction(3.)applies only if the coverage provided under this policy excludes loss or damage caused by or resulting from corrosive soil conditions. If notice of cancellation is mailed,proof of mailing will be sufficient proof of notice. If this policy is cancelled,we will send the named Insured any premium refund due,as soon as practicable.The refund,if any,will be on a pro rats basis.However,the refund may be less than pro rata if we have made a loan to you for the purpose of payment of premium for this policy. The cancellation will be effective even if we have not made or offered a refund. Nonrenewal A. Subject to the provisions of paragraphs B.and C.below,if we elect not to renew this policy, we will mail or deliver written notice stating the reason for nonrenewal to the first named insured and to the producer of record,at least 60 days,but not more than 120 days,before the expiration or anniversary date. We will mail or deliver our notice to the first named insured and to the producer of record at the mailing address shown in the policy. Policy Conditions California Mandatory-Cancellation And Nonrenewal continued Form 80.02-9717(Rev.9-15) Endorsement Page 3 Conditions Nonrenewal B. This provision applies to coverage on real property which is used predominantly for (continued) residential purposes and consisting of not more than four dwelling units,and to coverage on tenants'household personal property in a residential unit,if such coverage is written under this policy: 1. We may elect not to renew such coverage for any reason,except as provided in 2. through 4.below. 2. We will not refuse to renew such coverage solely because the first named insured has accepted an offer of earthquake coverage. However,the following applies only to insurers who are associate participating insurers as established by Cal.Ins.Code Section 10089.16.We may elect not to renew such coverage after the first named insured has accepted an offer of earthquake coverage,if one or more of the following reasons applies: a. the nonrenewal is based on sound underwriting principles that relate to the coverages provided by this policy and that are consistent with the approved rating plan and related documents filed with the Department of Insurance as required by existing law; b. the Commissioner of Insurance finds that the exposure to potentional losses will threaten our solvency or place us in a hazardous condition.A hazardous condition includes,but is not limited to,a condition in which we make claims payments for losses resulting from an earthquake that occurred within the preceding two years and that required a reduction in policyholder surplus of at least 25%for payment of those claims;or C. we have: (1) lost or experienced a substantial reduction in the availability or scope of reinsurance coverage;or (2) experienced a substantial increase in the premium charged for reinsurance coverage of our residential property insurance policies;and the Commissioner has approved a plan for the nonrenewals that is fair and equitable,and that is responsive to the changes in our reinsurance position. 3. We will not refuse to renew such coverage solely because the first named insured has cancelled or did not renew a policy,issued by the California Earthquake Authority that included an earthquake policy premium surcharge. 4. We will not refuse to renew such coverage solely because corrosive soil conditions exist on the premises.This restriction(4.)applies only if the coverage provided under this policy excludes loss or damage caused by or resulting from corrosive soil conditions. C. We are not required to send notice of nonrenewal in the following situations: 1. If the transfer or renewal of a policy,without any changes in terms,conditions,or rates,is between us and a member of our insurance group. 2. If the policy has been extended for 90 days or less,provided that notice has been given in accordance with paragraph A. Policy Conditions California Mandatory-Cancellation And Nonrenewal continued Form 80-02-9717(Rev.9-15) Endorsement Page 4 C H U S B® Policy Conditions Endorsement Effective Date MAY 13,2018 Policy Number 3602-93-24 WCE Conditions Nonrenewal 3 If you have obtained replacement coverage,or if the first named insured has agreed,in (continued) writing,within 60 days of the termination of the policy,to obtain that coverage. 4 If the policy is for a period of no more than 60 days and you are notified at the time of issuance that it will not be renewed. 5. If the first named insured requests a change in the terms or conditions or risks covered by the policy within 60 days of the end of the policy period. 6. If we have made a written offer to the first named insured,in accordance with the timeframes shown in paragraph A.,to renew the policy under changed terms or conditions or at an increased premium rate,when the increase exceeds 25%. Designated Third This provision applies to a policy insuring individually owned residential structures of not more Party than four dwelling units,individually owned condominium units,or individually owned mobile homes,and their contents,located in this state and used exclusively for residential purposes or a tenant's policy insuring personal contents of a residential unit located in this state. • If you have designated a person to receive notice of lapse,termination,expiration, nonrenewal,or cancellation of your policy for nonpayment of premium,we will mail or deliver to the designated person advance written notice of at least 10 days before the effective date of such lapse,termination,expiration,nonrenewal,or cancellation of your policy for nonpayment of premium. • No benefit under this policy is provided to such designated person,other than the right to receive the aforementioned notice. All other terms and conditions remain unchanged. Authorized Representative Q-Av-id- l Policy Conditions California Mandatory—Cancellation And Nonrenewal last page Form 80-02-9717(Rev.9-15) Endorsement Page 5