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HomeMy WebLinkAboutA7167 - PHD ECONOMIC DEVELOPMENT CONSULTANTING LLC AMENDMENT NO. 2 TO AGREEMENT BETWEEN THE CITY OF PALM SPRINGS AND PhD ECONOMIC DEVELOPMENT CONSULTING, LLC FOR TRANSITIONAL CONSULTING AND SPECIAL PROJECT CONSULTING FOR THE FINANCE DEPARTMENT (Agreement No. A 7167) THIS AMENDMENT NO. 2 ("Second Amendment") to that certain "Agreement Between the City of Palm Springs and Phd Economic Development Consulting, LLC for Transitional Consulting and Special Project Consulting for the Finance Department" ("Agreement") is made and entered into to be effective on the 18th day of September, 2019 by and between the City of Palm Springs, a California charter city and municipal corporation ("City"), and PhD ECONOMIC DEVELOPMENT CONSULTING, LLC a California limited liability company ("Consultant") collectively, the "Parties," and each a "Party." RECITALS A. City and Consultant previously entered into an Agreement regarding Consultant's provision of transitional and special project consulting services to City's Finance Department. The City Manager approved this Agreement, identified in the public records of the City as Agreement No. A7167, executed by Consultant and entered into on July 24, 2018. Under the Agreement, compensation, and reimbursement to Consultant for costs and expenses was not to exceed twenty-five thousand dollars ($25,000). B. City and Consultant desired to amend the Agreement to allow for the continuation of services by Consultant with compensation and reimbursement not to exceed an additional forty- five thousand dollars ($45,000), with the total compensation and reimbursement payable to Consultant being seventy thousand dollars ($70,000). This Amendment No. 1 was approved by the City Council on September 5, 2018. C. City and Consultant now desire to further amend the Agreement to allow for additional transitional consulting services by Consultant with compensation and reimbursement not to exceed an additional ten thousand dollars ($10,000), with the total compensation and reimbursement payable to Consultant being eighty thousand dollars ($80,000). NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: AGREEMENT 1. The true and correct recitals above are incorporated by this reference herein as the basis for and a material part of this First Amendment. 2. Section 3 of the Agreement is hereby amended in its entirety to read as follows: "Section 3. Compensation. Consultant shall be compensated for the services rendered, and reimbursed for costs and expenses under this Agreement in accordance with the schedule of fees set forth in Exhibit "B." Consultant's total compensation under the Agreement as amended, 1 Amendment No.2 Agreement No.A 7167 PhD Economic Development Consulting,LLC including reimbursement for costs and expenses, shall not exceed eighty thousand dollars ($80,OW). 3. Full Force and Effect. This First Amendment is supplemental to the Agreement,and is by reference made part of said Agreement. All of the terms, conditions, and provisions, thereof, unless specifically modified herein, shall continue in full force and effect. In the event of any conflict or inconsistency between the provisions of this First Amendment and any of the provisions of the Agreement,the provislons of this First Amendment shall in all respects govem and control. 4. Corporate Authority. Each of the persons executing this First Amendment on behalf of a Party hereto warrants that(i)such Party is duly organized and in good standing,(ii)he/she is duly authorized to execute and deliver this Amendment on behalf of said Party,(N)by his/her execution of this First Amendment,such Party is formally bound to the provisions of this First Amendment, and (N)=the entering into this First Amendment does not violate any provision of any other agreement to which said Party is bound. IN WITNESS WHEREOF, the parties have executed this Amendment as of the dates stated below. CITY. CONSULTANT: CITY OF PALM SPRINGS PhD ECONOMIC DEVELOPMENT CONSULTING, LLC By: DAVID H. READY, P SCOTT G MILLER, Ph.D. City Manager Managing Partner APPROVED AS TO FORM; ATTEST By: ByA /V Jeffrey alli ger Mtfi6ny Mejia, MC, City Attorney City Clerk APPROVED BY Cirl COttNCil" Ali lai 2 AmendmeM No.2 Agog_ment No.A 7167 PhD Economic Development Consulting.LLC 5 AGREEMENT BETWEEN THE CITY OF PALM SPRINGS AND PhD ECONOMIC DEVELOPMENT CONSULTING,LLC FOR TRANSITIONAL CONSULTING AND SPECIAL PROJECT CONSULTING FOR THE FINANCE DEPARTMENT THIS AGREEMENT is made by and between the City of Palm Springs a California charter city and municipal corporation (hereinafter called "CITY"), and PhD Economic Development Consulting LLC, a California limited liability company (hereinafter called "CONSULTANT"). RECITALS A. CITY desires to have certain services provided(the"services")asset forth in the"Scope of Services"marked as Exhibit A, attached hereto and incorporated by this reference herein. B. CONSULTANT represents that it is qualified and able to perform the services. NOW, THEREFORE, in consideration of these promises and mutual agreements, the parties agree as follows: Section 1. CONSULTANT's Services. CONSULTANT shall perform the services described inExhibitA- SCOPE OF SERVICES, attached hereto and incorporated by this reference herein, inamanner satisfactory to City and consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing in the same locality under similar conditions.. Section 2. Time of Performance. CONSULTANT shall perform the services on or by the Termination Date set forth in this agreement. The Time of Poe may be extended in writing by the City Manager orhis designee pursuant to the same terms and conditions ofthe Agreement. Section 3. Compensation. CITY agrees to compensate CONSULTANT, and CONSULTANT agrees to accept in satisfaction for the services required by this Agreement the Consideration as set forth and more particularly described in Exhibit B, attached hereto and incorporated by this reference herein. Said Consideration shall constitute reimbursement ofCONSULTANT's fee for the services as well as the indirect costs necessary to provide the services. CITY shall pay CONSULTANT said Consideration in accordance with the schedule ofpayment set forth in Exhibit B, attached hereto and incorporated herein. Section 4. Independent Contractor. CONSULTANT is and shall at all times remain,as to CITY, a wholly independent contractor. Neither CITY nor any of its agents shall have control over the time,place or manner in which CONSULTANT, or any ofCONSULTANT's employees perform services hereunder,except as herein set forth. CONSULTANT shall not, at any time,or in any manner,represent that it or any of its agents or employees are in any manner agents or employees of CITY. Agreement Palm Springs/PhD Economic Development Consulting Page 1 of 7 Section 5. Assignment. CONSULTANT shall not assignor attempt to assign any portion of this Agreement without the prior written approval of CITY. Section 6. CONSULTANT: Responsible Principal. The Responsible Principal set forth in Exhibit B shall be principally responsible for CONSULTANT's obligations underthis Agreement and shall serve asprincipal liaison between CITY and CONSULTANT.Designation of another Responsible Principal by CONSULTANT shall not be made without the prior written consent of CITY. Section7. Personnel. CONSULTANT represents that ithas,orshall secure at its own expense, all personnel required to perform CONSULTANT's services under this Agreement except for specific technological expertise that the CITY shall provide or reimburse CONSULTANT for, as approved by the City Manager or his designee. All personnel engaged in the work shall be qualified to perform such services. Section 8. Interests of CONSULTANT. CONSULTANT affirms that it presently has no interest and shall nothave any interest,direct orindirect,which would conflict in any manner with the performance of the services contemplated by this Agreement. No person having any such interest shall be employed by or be associated with CONSULTANT. Section 9. Insurance. (a) CONSULTANT shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work by the CONSULTANT, his agents, representatives,employees or Sub-consultants.Insurance shall beofthe type,in the amounts and subject to the provisions described below. i. Commercial general liability coverage at least as broad as Insurance Services Office Commercial General Liability occurrence coverage ("occurrence" form CG0001, Ed. 11/88) with minimum limits of at least one million dollars ($1,000,000) per occurrence. If the insurance includes a general aggregate limit,that limitshallapplyseparatelyto thiscontractoritshall beat least twice the required per occurrence limit; ii. Professional liability (errors and omissions) insurance with limits of at least two million dollars($2,000,000)per occurrence and two million dollars($2,000,000) annual aggregate; iii. Vehicle liability insurance covering any vehicle utilized by CONSULTANT in the performance of this Agreement with limits of at least one million dollars ($1,000,000)per occurrence; and iv. Workers Compensation as required by the State of California. (b) Evidence of Coverage: i. Prior to commencement ofwork under this Agreement,or within 14days of notification ofapproval ofAgreement,whichever is shorter,CONSULTANT shall file certificates of insurance with original endorsements evidencing coverage incompliance with this Agreement on the City's standard proofofinsurance form, as already sent and received by the City. Agreement Palm Springs/PhD Economic Development Consulting Page 2 of 7 ff. CONSULTANT shall make the insurance policy required by this Agreement, including all endorsements and riders, available to the City for inspection at CONSULTANT's office during regular businesshours. iii. During the term of this Agreement, CONSULTANT shall maintain current valid proof of insurance coverage, with City at all times. Proof of renewals shall be filed prior to expiration of any required coverage and shall be provided on the City`s standard proof of insurance form, and incorporated herein. iv. Failure to submit any required evidences ofinsurance within the required time period shall be cause for default. V. The policy or policies required by this Agreement shall contain a clause that the insurance coverage will not be canceled or materially changed without thirty(30) days prior written notice to the City. vi. In the event CONSULTANT does not maintain current, valid evidence of insurance on file with City,City may, at its option, withhold payment of any moneys owed to CONSULTANT, or which it subsequently owes to CONSULTANT,until proper proof is filed. (c) All insurance coverage shall be provided by insurers admitted in the state of California and with a rating of B+;VII or better in the most recent edition of Best's Key Rating Guide, Property-Casualty Edition. (d) CONSULTANT's insurance and any insurance provided in compliance with Agreement, shall be primary with respect to any insurance or self-insurance programs covering the City, its' City Council and any officer, agent or employee of City. (e) Where available,the insurer shall agree to waive all rights of subrogation against the City, its City Council and every officer, agent and employee of City. (f) Any deductibles or self-insured retentions shall be declared to and are subject to approval by City. At the option of the City, either the insurer shall reduce the deductibles or self-insured retentions as respects the City,or the CONSULTANT shall procure a bond guaranteeing payment of losses and expenses. (g) In the event that CONSULTANT does not provide continuous insurance coverage, the City shall have the right, but not the obligation, to obtain the required insurance coverage at CONSULTANT's expense, and the City may deduct all such costs from moneys the City owes to the CONSULTANT or from moneys which it subsequently owes to the CONSULTANT. (h) CONSULTANT's Sub-consultants may be required to comply with the insurance requirements set forth in this Section. All insurance coverage required to be maintained pursuant to the Agreement by the CONSULTANT or his Sub-consultants shall name the City, its City Council and every officer, agent and employee of City as additional insured's with respect to work under this Agreement. Agreement Palm Springs/PhD Economic Development Consulting Page 3 of 7 Section 10. Indemnification. (a) CONSULTANT agrees to indemnify, hold harmless and defend CITY, City Council and each member thereof,and every officer,employee and agent of CITY,from any claims,liability or financial loss(including,without limitation, attorneys'fees and costs)arising fromany gross negligence ofCONSULTANT oranyperson employed by CONSULTANT in the performance of this Agreement. In kind, the CITY agrees to indemnify, hold harmless and defend CONSULTANT from any claims, liability, or financial loss(including,without limitation, attorney fees and costs) arising from any intentional,reckless,negligent,or otherwise wrongful acts,errors or omissions of CITY or any person employed or contracted by CITY in the performance of this Agreement. (b) CITY agrees to indemnify,hold harmless and defend CONSULTANT from any claims, liability, or financial loss (including, without limitation, attorney fees and costs) arising from any state, federal or retirement agency questioning, informally or formally protesting, holding hearings, making decisions or claims that CONSULTANT is not an independent contractor in the performance of this Agreement. Section 11. Termination. (a) CITY may cancel this Agreement at any time upon fifteen,(15) business days' written notice to CONSULTANT. CONSULTANT agrees to cease all work under this Agreement on or before the effective date of such notice. CONSULTANT may cancel this Agreement upon fifteen(15) business days' written notice to CITY. (b) In the event of termination or cancellation of this Agreement by CITY, due to no fault or failure of performance by CONSULTANT, CONSULTANT shall be paid full compensation for all services performed by CONSULTANT, in an amount to be determined as follows: For work done in accordance with all of the terms and provisions of this Agreement, CONSULTANT shall be paid an amount equal to the amount of services performed prior to the effective date of termination or cancellation; provided,in no event shall the amount of money paid under the foregoing provisions of this paragraph exceed the amount which would be paid CONSULTANT for the full performance of the services required by this Agreement. Section 12. CITY's Responsibility. CITY shall provide CONSULTANT with all pertinent data, documents, access to and cooperation of staff and other requested information as is available for the proper performance of CONSULTANT's services. The City shall also provide adequate work space for the CONSULTANT to interview staff and securely store CITY records being used as part of the services, provide an internal communication mechanism, access to phone, electricity and CITY employee emails, provide adequate parking near City Hall and other .CONSULTANT needs, as identified by the CONSULTANT in connection with this Agreement. Agreement Palm Springs/PhD Economic Development Consulting Page 4 of 7 Section 13. Changes in the Scope of Work. The CITY shall have the right to order, in writing, changes in the scope of work or the services to be performed, by mutual consent of the CONSULTANT. Any changes in the scope of work requested by CONSULTANT must be made in writing and approved by the City Manager or his designee. Section 14. Notice. Any notice required to be given to CONSULTANT shall be deemed duly and properly given upon delivery, if sent to CONSULTANT postage prepaid to the CONSULTANT's address set forth in Exhibit B or personally delivered to CONSULTANT at such address or other address specified to CITY in writing by CONSULTANT. Any notice required to be given to CITY shall be deemed duly and properly given upon delivery, if sent to CITY postage prepaid to CITY's address set forth in Exhibit B or personally delivered to CITY at such address or other address specified to CONSULTANT in writing by CITY. Section 15. Attorney's Fees. In the event of litigation between the parties arising out of or connected with this Agreement, the prevailing party in such litigation shall be entitled to, recover, in addition to any other amounts, reasonable attorney's fees and costs of such litigation. Section 16.Entire Agreement.This Agreement represents the entire integrated agreement between CITY and CONSULTANT, and supersedes all prior negotiations, representations or agreements,eitherwritten ororal. This Agreement maybe amended only by a written instrument signed by both CITY and CONSULTANT. Section 17. Governing Law and Venue. The interpretation and implementation of this Agreement shall be governed by the domestic law of the State of California. The venue for any dispute arising from or related to this Agreement shall be the Superior Court of the State of California, County of Riverside, Palm Springs Courthouse. Section 18. Severability. Invalidation of any provision contained herein or the application thereof to any person or entity by judgment or court order shall in no way affect any of the other covenants,conditions,restrictions,or provisions hereof,or the application thereof to any other person or entity, and the same shall remain in full force and effect. Section 19. Non-Liability of City Officers and Employ. No officer or employee of CITY shall be personally liable to the CONSULTANT, 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 CONSULTANT or its successor, or for breach of any obligation of the terms of this Agreement. Section 20. Conflict of Interest. CONSULTANT acknowledges that no officer or employee of the CITY has or shall have any direct or indirect financial interest in this Agreement nor shall CONSULTANT enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. CONSULTANT warrants that CONSULTANT has not paid or given, and will not pay or give,any third party any money or other consideration in exchange for obtaining this Agreement. Agreement Palm Springs/PhD Economic Development Consulting Page 5 of 7 Section 21. Covenant against Discrimination. In connection with its performance under this Agreement, CONSULTANT 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"). CONSULTANT 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, CONSULTANT certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any CONSULTANT 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 CONSULTANT 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. Section 22. Integrated Agreement, This Agreement contains all of the agreements of the parties and supersedes all other written agreements. Section 23. 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 such party is bound, for purposes of this Agreement, by the same. Section 24. Authori1y. The persons executing this Agreement on behalf of the parties warrant that they are duly authorized to execute this Agreement on behalf of the parties, and that by so executing this Agreement, the Parties are formally bound to the provisions of this Agreement. SIGNATURES FOLLOW Agreement Palm Springs/PhD Economic Development Consulting Page 6 of 7 IN WITNESS WHEREOF,the Parties have executed this Agreement as of the dates stated below. EXECUTED this day of July, 2018, at Palm Springs, California. CITY: CONSULTANT: CITY OF PALM SPRINGS PhD ECONOMIC DEVELOPMENT CONSULTING,LLC B ' y: DAVID H. READY,P SCOTT G MILLER,Ph.D. City Manager Managing Partner APPROVED AS FORM ATTEST By: By: dxv ew4&'-t }C/kr r Edward Z.Kotkin, Anthony Mejia If City Attorney City Clerk APPROVED BY CIiY MUTAGER Agreement Palm Springs/PhD Economic Development Consulting Page 7 of 7 EXHIBIT A SCOPE OF SERVICES The Consultant (an independent contractor) has specific knowledge, experience, expertise and resources that can assist the City of Palm Springs in their transition to recruiting and on-boarding a new Finance Director and to provide special project consulting services with the goals of enhancing, developing, and evaluating current financial processes thus improving financial operations to make them more efficient, effective,and customer service friendly. Consultant services will include working and consulting with the City staff on specific functions,plans, financial data gathering,financial documents,general consulting,attending internal meetings,attending external meetings (at the request of the City Manager), conducting internal staff training as identified, conducting process development and evaluation, mentoring and other duties as agreed to by the Consultant in the pursuit of the objectives mentioned in this Scope of Services. These services will be conducted in phases that may at times overlap, but will have anticipated time frames for project and consulting completion.The City can also choose to add or eliminate parts of any phase, or delay all or part of a phase,as the City Manager or designee determines is in the best interests of the City. PHASE I A-FINANCE DEPARTMENT ASSESSMENT Along with providing assistance in the transition period for a new Finance Director,the Consultant will conduct a high level SWOT assessment (strengths, weaknesses, opportunities and threats) of the Finance Department's following financial functions: Accounts Payable Process Accounts Receivable Process Purchasing Budget Monitoring and Control Payroll(Other than Computer System Issues) Annual Financial Statement Preparation Financial Reporting Consistency in Internal Controls Treasury Debt Administration Cashiering NOTE:This assessment is not meant to be a formal independent annual audit.It is a high level review to learn about the various processes within the department and to determine if there are any outstanding legal, informational or efficiency issues and concerns. Time Frame: 45 days Exhibit A PhD Economic Development Consulting,LLC-Scope of Services Page 1 of 3 PHASE I B -FINANCE DEPARTMENT ASSESSMENT Phase IB will consist of: 1. Once Phase IA is completed, any significant inconsistencies, issues, or concerns discovered will be given a more in-depth review and reporting for City Management to act upon as they see appropriate, 2. In addition, the following activities will be reviewed for consistency, efficiency effectiveness and congruence with City Council and City Manager Goals and Objectives: Customer Service Mission, Goals and Objectives General Conformity with GAAP and/or GASB Budget Preparation and Process(Initial Overview) Revenue Collections; Local Tax Procurement and Accounting Conformance to Local Tax Measure Requirements Internal and External Communications Intra-Departmental Support General Use of Technology Information Requests and Complaint Handling 3. Continue assisting the City's chosen recruitment firm in their Finance Director recruitment process. J Time Frame: 35 days PHASE II-FINANCE DEPARTMENT ISSUES AND ADMINISTRATION In Phase H the Consultant will: 1. Continue assisting the Interim Finance Director with administration challenges related to Phase I identified issues, law and regulation compliance, effectiveness and efficiency of operations issues, internal control issues and other consultant identified needs and activities by providing internal consulting, 2. Continue assisting the City's chosen recruitment firm in their Finance Director recruitment process, and 3. Focus on the City's Payroll System and identify issues, problems, concerns and identify possible solutions for City Management to take direction on. Time Frame: 60 days Exhibit A PhD Economic Development Consulting,LLC-Scope of Services Page 2 of 3 PHASE III -FINANCE DEPARTMENT AUTOMATED SYSTEMS EVALUATION AND ASSIST IN ON-BOARDING PROCESS OF NEW FINANCE DIRECTOR Phase III will consist of: 1. As part of the transition assistance, the Consultant will help the City in the On-Boarding process for the newly selected Finance Director, 2. Continue to provide internal consulting services to the Finance Department and the City Manager's Office, and 3. Begin developing and implementing(as the project manager) the assessment of the City's automated finance system beyond the payroll functions done in earlier phases,to determine if the current system is fine,the current system needs certain upgrades,or the system needs to be replaced.This will be done in coordination with the City's technology and finance staff. Time Frame: 60-120 days PHASE IV-CITY BUDGET PROCESS AND BUDGET DOCUMENT In this Phase, the Consultant will work with Finance Department,New Finance Director and the City Manager's Office staff to further evaluate the City's Annual Budget process and the City's Budget Document itself and suggest improvements to both the budget process and the written budget document(s). These suggestions may include budget process, budget schedule, procedures, communication goals,budget document and form formats,budget objectives,assistance with types and coordination of public hearings and other budget related activates. Consultant suggestions will be up to City Management to approve and the Consultant will be happy to assist implementation. Time Frame: 90-120 Days Exhibit A PhD Economic Development Consulting,LLC-Scope of Services Page 3 of 3 CITY OF PALM SPRINGS PhD Economic Development Consulting Phase 1 Prioritized Function Plan-REVISED Treasury- (High Priority) 1. Investment Policy Review 2. Investment Reports-Review 3. Cash Flow Model and Analysis 4. Investments Review (type, length, agency) 5. Review of 31 part treasury brokers or investment advisors used 6. Investment Process (ordering and GK booking) review with appropriate internal controls 7. Public and Council involvement 8. Review Automation in placing investments and reports 9. Banking Relationships Review 10. Cashiering-process review and sign-offs a. Deposits b. Cash Receipts process Payroll (Other than Computer System Specific Review-High Priority) 1. Payroll Process review and analysis 2. Review of Payroll Errors and Replaced Checks 3. IRS or California State Payroll Tax letters or issues 4. Ca1PERS Issues 5. How Automation integrates into the process 6. Payroll Checks a. Automatic Deposit vs written checks b. Paycheck stubs c. Centralized vs decentralized payroll 7. Timccards process review a. Issues b. Initial Fill-Out, Supervisor Approval, Other Approval c. How changes are accounted for after initial timecard input into system d. Timecard sign-offs process e. Payroll-Accounting entry and supervision(Internal Controls) f. Final checks issuance (Does it follow policy and the law) g. Entering of data(centralized and decentralized 8. Police and Fire Timesheet calculations and integration into payroll 9. Overtime Usage (approvals, reporting, budget tie-in, etc.) 10. Compensation Time Usage (approvals,reporting, budget tie-in, etc.) 11. Leave Time Accumulation and Calculations (approvals, reporting, budget tie-in, etc.) 12. Accounting treatment of Salary and Benefit transactions 13. Back-Up Procedures 1 14. Contingency Payroll Plans 15. Accruals process, maximums and accumulations (system generated) 16. Access capability by employee, supervisor, dept. head, CM Office 17. Survey of departments/employees? Financial/Budget Reporting (High Priority) I. Financial statements issued to who and when 2. Who prepares them 3. Format- What is looked at: enterprise funds, internal service funds, top revenues, general fund, reserve fund(s)? 4. How is it related back to approved budget Work with Firm on Finance Director/Treasurer Selection Process (High Priority) Develop Certain Financial Policies and Procedures (High-Mid Priority) Budget Monitoring and Control (Mid-Priority) 1. Interface of Finance Department Functions with Budget a. Who produces reports used before budget and after budget b. Budget changes and amendments c. Tracking of Council approved changes d. Tracking of contracts issued and purchasing and budget e. Tracking of supplies issued and purchasing and budget f. Budget rollover beginning of physical year g. End of fiscal accounting and budget surplus- how surplus funds are used in next years, who approves, how accounted for in budget and accounting system 2. How is capital projects budget done-put together-tracked Debt Administration (Mid Priority) 1. Review debt recording, accounting and tracking 2. Review Debt Payment Schedule 3. Annual and quarterly disclosures 4. Post-Bond Transaction Disclosures 5. Review Policy 6. Accounting of debt- separation of accounts- statements 7. Special District administration—annual reviews and approvals 8. Review of Professional firms used for any aspect of bonding and administration 9. Use of Automation 2 Annual Financial Statement Preparation(Mid Priority) 1. Process/Schedule 2. Any Issues 3. Management Letters 4. Sign Offs 5. Presentation to City Council 6. Using new audit firm every 5 years 7. Tracking and follow-up on management and other issues 8. Any Departmental sub-statements 9. Any interagency financial statements responsible for? Accounts Payable Process (Low Priority) 1. Review AP Process and identify average days to pay invoices 2. Policies and procedures in place- written down 3. How are policies communicated to new employees, departments 4. Any training done internal or external 5. Interface with purchasing, how when, where 6. How many "hands" touch invoice, internal controls, types of reports 7. How is technology used? 8. Get list of vendors, identify top 10 , middle 10, smaller 10 a. Send Survey asking how identified vendors feel about AP process 9. Petty cash; cash reimbursements to employees 10. Special and Reserve Funds usage and tracking how money is used out of these accounts- who is watching and approving 11. Reserve Fund and Reserves Policy (in accordance with GASB Pronouncement) Accounts Receivable Process & Cashiering (Low Priority) 1. Top 5-7 revenues 2. Are they mapped out on a schedule/calendar 3. Tax Collections (TOT, Measure J, etc.) 4. How are they estimated and integrated with city budget projections (at budget time and through-out the year) 5. Use external consultants for sales tax, TOT and/or property taxes, business tax estimates 6. Review integration with cash flow 7. Process for cash payments, checks, credit cards a. Armored Car Use b. Deposit time frames c. Internal controls and sign-offs d. Any management letter comments e. Reconciliation(s) 3 Customer Service Review (Low Priority) 1. Review Training 2. How is customer service implemented 3. How is customer service evaluated 4. Customer Service Plan Consistency in Internal Controls (Last Review in Phase I) 1. Policy Review 2. Review of separation of duties and approvals/sign-offs (within Department) 3. Review of separation of duties and approvals/sign-offs(external to Department) 4. Review Departmental communications and internal controls 5. Signature Authority—per Ordinance, City Charter, City Policy 6. Review Past Auditor Findings and Change Implementations Procurement (Not hart of Finance-will not review) 1. Purchasing Policy and Procedures 2. How communicated to departments 3. Centralized purchasing or decentralized or hybrid 4. Are policies followed?Any major offenders? 5. City Employee Reimbursements 6. Petty Cash 7. Line of Authority to purchase or sign-off authority 8. Training? 9. Use of Automation? Approved July 16, 2018: / ea , PhD City Manager 4 EXHIBIT B COMPENSATION-CONSULTANT HOURS, SCHEDULE OF PAYMENTS TERMS OF AGREEMENT, AGREEMENT REPRESENTATIVES AND ADDRESSES In satisfaction for the services required by this Agreement as described in Exhibit A-Scope of Services, the CONSULTANT will be compensated $135 an hour plus any direct expenses, as approved by the City Manager or his designee. Scope of Services and pricing based on 16-24 hours a week. CONSULTANT is an Independent CONSULTANT and his general hours for performance of this Agreement will be at his sole discretion. However, the CONSULTANT's general availability to perform under this Agreement is between 9:00 am to 6:00 pm. The CONSULTANT may or may not work on any City, State or Federal Holidays, or when City resources or City personnel are unavailable, or City offices are closed, at the Consultant's discretion. The CONSULTANT will work both in City Hall and at his place of work during the course of this Agreement. Consultant understands there may be some nigh, weekend and on- call hours required under the scope of services and will try to accommodate as needed. The CITY will accommodate the CONSULTANT's Schedule including the CONSULTANT's personal time off, which the CONSULTANT will coordinate with the CITY. CONSULTANT shall submit a statement to CITY for its services performed in the previous month, which will include the hours of service rendered and itemized direct expenses (if any). CITY shall pay CONSULTANT the amount of such billing within thirty (30) days of receipt of same. The Commencement date of this agreement will be July 9, 2018 unless otherwise agreed to by the CITY and the CONSULTANT. The Termination Date of this Agreement shall be July 3,2019 unless extended by the CITY and CONSULTANT per Section 2 of this Agreement. The Agreement's responsible parties and addresses are: CITY-City Manager or designee, Palm Springs City Hall, 3200 E Tahquitz Canyon Way, Palm Springs, CA 92262; CONSULTANT- Scott G Miller, Managing Partner,PhD E.D. Consulting,700 S Lake Ave., Suite 306, Pasadena, CA 91106. Exhibit B PhD Economic Development Consulting,LLC-Scope of Services Page 1 of 1 A�® CERTIFICATE OF LIABILITY INSURANCE DA s/23 018 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(les)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 endorsements. PRODUCER rUU"IACT CLAUDIAMARTINEZ StateFarm ERIC MARTINEZ,LICE#0543002 PHONE 909-962-6242 =Mail: 9D9-962-6246 440 W BASELINE RD aoX'E S. .CLAUDIA@ERICMARTIEZINSURANCE.COM CLAREMONT CA 91711 _ INSUREWSI AFFORDING COVERAGE NAICe NSUIRERA: State Farm General Insurance Company 25151 INSURED INSURER B: State Farm Mutual Automobile Insurance Company 25178 SCOTTG MILLER INSURER C: PHD ECONOMIC DEVELOPMENT CONSULTING LLC INSURER D: 700 SLAKE AVE APT 306 PASADENA CA 91106-3944 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. NSR TYPE OF INSURANCE suLd SUER POLICY NUMBER POLICY EFF Pow YEXP AYM LRV15 xi COMMERCWLGENERILLIANLRY EACH OCCURRENCE f 2,000,000 CILMIld DE ®OCCUR PREMISES Ea oo r no f 300,E MED EXP one Neon f 6,000 A Y 92-EA-V338-8 O6/28/2018 06/28/2019 PERSONAL S ADV INJURY f GEN'LAGGREGATEUMrr APPDESPER GENERALAGGREGATE f 4.000•DOO POLICY JECTT LOC PRODUCTS-COMPIOPAGO f 4,000,000 OTHER: Business Property f 22.000 AUTOMOBBE LMNLRY Y 4673390-F28-75 06/28/2018 12/28/2018 (Na1=0 SNGLE LIMIT f my VAUTO 2017TESLA MODEL BODILY INJURY(Pepeson) f 250000 B iOWNED SCHEDULED BODILY INJURY(Per accident) f 500,000 AUTOS ONLY AUTOS HIRED NON-OYAJED VIN:5YJSAIE12HF215356 PROPERTYDAMAGE f 100000 AUTOS ONLY AUTOS ONLY Per amdanl f UMBRELLA LIMB OCCUR EACH OCCURRENCE f 1.000,000�ll A EXCESS Lane OIAIMS.MADE 75-ES-3046-9 06/26/2018 06128/2019 AGGREGATE f DIED I I RETENTION f YFORKERSCOMPENSATION PER OTH - ANDEMPLOYERS'LMILIT- YIN STATUTE ER ANY PROPRIETORIPARTNERiEXECUTIVE E.L.EACH ACCIDENT f OFFICERIMEMBER EXCLUDED? NIA (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE f u yes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT f DESCRIPTION OF OPERATIONS I LOCATIONS VEHICLES(ACORD 101,Additional Remarks Schedule.may be atlached If more space is required) The City of Palm Springs has been listed as additional Insured. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN The City Of Palm Springs ACCORDANCE WITH THE POLICY PROVISIONS. 3200 E.Tahquitz Canyon Way Palm Springs,CA 92262 AUTHORnnUEEO��REPRESE/NTATI-VTE,,/_ l ®1988-2015 ACOR ORPORATION. All rights reserved. ACORD 25(2016103) The ACORD name and logo are registered marks of ACORD 1001483 132649.12 03-16-2016 A� CERTIFICATE OF LIABILITY INSURANCE DATE(MM6lDIYYI'1') o7105/2018 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 endorsements. PRODUCER CONTACT NAME: CLAUDIA MARTINEZ State Farm ERIC MARTINEZ,LICE#0543002 IP qNE 909-962-6242 ac No 909-962-6246 440 W BASELINE RD ,Tp­AIAILyS. CLAUDIA@ERICMARTIEZINSURANCE.COM CLAREMONT CA 91711 INSURER(S)AFFORDING COVEMfOE NNC/ INSURERA: State Farm General Insurance Company 25151 INSURED INSURER B: State Farm Mutual Automobile Insurance Company 25178 SCOTTG MILLER INSURERC: PHD ECONOMIC DEVELOPMENT CONSULTING LLC INSURER o: 700 S LAKE AVE APT 306 PASADENA CA 91106-39" 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. mu JIM TYPE Of INSURANCE ADOL does PIXICY EFF POLICY EXP UNITS NUMBER TCMMERCI,ALGENE— LIABILITY EACH OCCURRENCE S CIAIMMPDE E OCCUR PREMISES Me xumence S MED EXP(My one o) $ PERSONAL 4 ADV INJURY S GEN'LAGGREGATEIIMITAPPI.IESPER: GENERAL AGGREGATE $ PoUCY jECar LOC PRODUCTS-COMPIOP AGG $ OTHER: $ AUTOMOBILE UU&N.RY Y ENOL 75-0454 06/28/2018 12/28/2018 COMBINED SINGLE LIMITFile ancelemi s 1 000 DBD B M=AANY AUrD 467 3390-F28-75E BODILY INJURY(Per Peron) S w V1 SCHEDULED BODILY INJURY(Peraccidenl) S AUFOSONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE S AUTOSONLY AUTOS ONLY Per accident ix s UMSRELLALUIB OCCUR EACH OCCURRENCE S 1,000,000 A EXCESS UAB CLAIMS-MADE 75.EB-3046.9 06/28/2018 06/28/2019 AGGREGATE $ DIED I RETENTION$ s UNORKERSCOMPENIATKRI OTN- IANDEMPLOYERS'UABILnY YIN BTATUTE ER ANY PROPRIETORIPARTNERIEXECUTNE .EACH ACCIDENT S OFFICERIMEMBER EXCLUDED? ❑ NIA E.L (Mandatory In NH) EL.DISEASE-EA EMPLOYEE S n yas desee u„de, DESCmRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT S DESCRIPTION OF OPERATIONS I LOCATIONS/VEHICLES(ACORD 101,AddlBenal Remmks Schedule,may be attached N man space Is,apuYen Business Vehicle:2017 Tesla Model S VIN:5YJSAIE12HF215356 The City of Palm Springs has been listed as additional Insured.. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN The City of Palm Springs ACCORDANCE WITH THE POLICY PROVISIONS. 3200 E.Tahquitz Canyon Way Palm Springs,CA 92262 AUTND0.12E0 REPRESENTATIVE m 1988.2015 ACORD CORPO ION. All rights reserved. ACORD 25(2016103) The ACORD name and logo are registered marks of ACORD 1001456 13254e12 0316.2U16 ACC)RO® CERTIFICATE OF LIABILITY INSURANCE GATE(MMIODA'YYY) �/ 06/28/2018 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 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 CONTACT NAME: Hiscox Inc.d/b/a/Hiscox Insurance Agency in CA PHc Na Ext: (888)202-3007 ac No 520 Madison Avenue EAUML contact hiscox.com ADDRESS: @ 32nd Floor INSURERS AFFORDING COVERAGE NAIC# New York,NY 10022 INSURERA: Hiscox Insurance Company Inc 10200 INSURED INSURERS: Phd.Economic Development,LCC INSURERC: 700 South Lake Ave INSURERD: Suite 306 INSURER E: Pasadena CA 91106 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 ADDL SUBR POLICY EFF POLICY EXP LTR TYPE OF INSURANCE INSD MD POLICYNUMBER MIDDIYI'YYI IMMIDDIYYY)nLIMITS X COMMERCIAL GENERAL LIABWTY EACH OCCURRENCE $ 2,000,000 CLAIMS-MADE FXI OCCUR PREMISES Ea eceunence $ 100,000 MED UP(My one person I S 5,000 A Y UDC-2297632-CGL-18 06/29/2018 06/29/2019 PERSONAL a ADV INJURY S 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER GENERALAGGREGATE $ 3,000,000 X POLICYE JECT LOD PRODUCTS-COMPIOPAGG s SIT Gen.Agg. OTHER: $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ Ea aceitlent ANYAUTO BODILY INJURY(Par person) S ALL OWNED SCHEDULED BODILY INJURY(Per aaident) $ AUTOS AUTOS NON-OWNED PROPERTYDAMAGE $ HIRED AUTOS AUTOS Per accident) H 1 8 UMBRELLA LIAR OCCUR EACH OCCURRENCE $ EXCESS UAB CLAIMSMADE AGGREGATE $ DEO RETENTIONS S WORKERS COMPENSATION PER OTH. AND EMPLOYERS'LIABILITY YIN STATUTE ER ANYPROPRIETORIPARTNERIEXECUTIVE E.L.EACH ACCIDENT $ OFFICERIMEMBEREXCLUDED? ❑ NIA (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE $ byes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT I S DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached If more space Is required) City of Palms Springs listed as additional insured. CERTIFICATE HOLDER CANCELLATION City Of Palms Springs 3200 East Tahquit2 Canyon Way SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Palms Springs,Ca 92263 THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ©1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25(2014101) The ACORD name and logo are registered marks of ACORD HI C�Ov HISCOX INSURANCE COMPANY INC. (A Stock Company) J X 104 South Michigan Avenue, Suite 600 Chicago Illinois 60603 Professional Liability Insurance Declarations This is a"Claims Made and Reported" Policy in which Claim Expenses are included within the Limit of Liability unless otherwise noted.Those words (other than the words in the captions)which are printed in Boldface are defined in the Policy. Policy No.: UDC-2297632-EO-18 1. Named Insured: FT Economic Development, LCC 2. Address: 700 South Lake Ave Suite 306 Pasadena, CA 91106 3.A. Limit of Liability: $2,000,000 Each Claim 3.B. $2,000,000 Aggregate for all Claims 4. Deductible: $ 1,000 Each Claim 5. Notice: Phone: 866-424-8508 Email: reportaclaim@hiscox.00m Mail: Hiscox 520 Madison Avenue-32nd Floor Attn: Direct Claims New York, NY, 10022 6. Policy period: From: I June 29, 2018 To: June 29, 2019 At 12:01 A.M.(Standard Time)at the address shown above. 7. Retroactive Date: February 01, 2007 S. Premium: $560.00 9. Attachments: DPL D001 CW(01/10)-Professional Liability Errors&Omissions Insurance Declarations DPL P001 CW(05/13)-Professional Liability Coverage Form DPL E5018 CW(08/15)-E5018.2 ManagementlBusiness Consulting Services Endorsement DPL E5102 CA(01/10)-E5102.1 California Amendatory Endorsement DPL E5424 CW(02/15)-Blanket Additional Insured Endorsement INT N001 CW(01/09)-Economic And Trade Sanctions Policyholder Notice DPL D001 CW (01110) Page 1 40 HI C�OX HISCOX INSURANCE COMPANY INC. (A Stock Company) J 104 South Michigan Avenue, Suite 600 Chicago Illinois 60603 IN WITNESS WHEREOF,the Insurer indicated above has caused this Policy to be signed by its President and Secretary,but this Policy shall not be effective unless also signed by the Insurer's duly authorized representative. 5� W President Secretary Authorized Representative DPL D001 CW(01/10) Page 2 410 PROFESSIONAL LIABILITY - US DIRECT HISCOX ERRORS AND OMISSIONS ABOUT POLICY The Hiscox Professional Liability—US Direct policy is designed to offer coverage for the risks entities face in performing their Professional Services. We urge You to read this Policy carefully so You understand the insurance that You have purchased, and the full extent of Your and Our rights and duties under this Policy. Please note that all words and phrases that appear in bold-type (except headings) have special meaning and are defined in the Definitions section of this Policy. Coverage for all Claims is subject to the entire terms and conditions of the policy. Coverage for Claims Made Against You You have purchased insurance that provides coverage for Claims made against You. We will pay Damages on Your behalf for any Claim that falls within the Insuring Agreement and within all of the terms and conditions outlined in the policy. Covered Claims are for Your Wrongful Acts in providing or failing to provide Professional Services. To determine who is an Insured please refer to the Definitions and Spousal and Domestic Partner section of the policy. Additionally, for coverage to apply, You must comply with all Your obligations as outlined in the Notice of Claims, Notice of Potential Claims, and the rest of the policy. The most We will pay is outlined in the Limits of Liability Section and items We will not pay are outlined in the Exclusions section. You are responsible for payments as outlined in the Deductible section. DPL Pool CW(05113) 2 ©Hiscox Inc.All rights reserved. PROFESSIONAL LIABILITY - US DIRECT HISCOX ERRORS AND OMISSIONS In consideration of the premium charged and in reliance on the statements made and information provided to Us, including but not limited to the statements made and information provided in and with the Application, which is made a part of this Policy, as well as subject to the Limits of Liability, the Deductible and all of the terms, conditions, limitations and exclusions of this Policy, We and You agree as follows: 1. INSURING DEFENSE AND SETTLEMENT A. INSURING AGREEMENT We shall pay on Your behalf Damages and Claim Expenses in excess of the Deductible resulting from any covered Claim that is first made against You during the Policy Period and reported to Us pursuant to the terms of the Policy for Wrongful Acts committed on or after the Retroactive Date. We shall also pay on Your behalf all Supplemental Payments in connection with any covered Claim that is first made against You during the Policy Period and reported to Us pursuant to the terms of the Policy for Wrongful Acts committed on or after the Retroactive Date. No Deductible shall apply to Supplemental Payments. B. DEFENSE 1. We shall have the right and the duty to defend any covered Claim, even if such Claim is groundless,false or fraudulent. 2. We shall have the right to appoint defense counsel upon being notified of such Claim. 3. Notwithstanding paragraph 2., We shall have no obligation to pay Claim Expenses until You have satisfied the applicable Deductible. 4. Our duty to defend shall terminate upon the exhaustion of the Limit of Liability as set forth in Item 3. of the Declarations. C. SETTLEMENT 1. We shall have the right to solicit and negotiate settlement of any Claim. 2. We shall not, however, enter into a settlement without Your prior consent, which consent shall not be unreasonably withheld. 3. If You shall refuse to consent to any settlement recommended by Us, Our liability for such Claim shall not exceed the amount for which such Claim could have been settled plus Claim Expenses incurred up to the date of such refusal. DPL P001 CW(05/13) 3 ©Hiscox Inc.All rights reserved. SI PROFESSIONAL LIABILITY - US DIRECT H I SCOX ERRORS AND OMISSIONS POTENTIAL11. NOTICE OF CLAIMS AND NOTICE OF CLAIMS A. NOTICE OF CLAIMS 1. As a condition precedent to any coverage under this Policy, You shall give written notice to Us of any Claim as soon as practicable, but in all events no later than: a. the end of the Policy Period (or any purchased Optional Extended Reporting Period); or b. 60 days after the end of the Policy Period (or any purchased Optional Extended Reporting Period) so long as such Claim is made within the last 60 days of such Policy Period (or any purchased Optional Extended Reporting Period). 2. Such notice shall be sent to Us at the address set forth in Item 5. of the Declarations. 3. Such notice shall include any and all documents related to such Claim, including every demand, notice, summons or other applicable information received by You or by Your representative. B. NOTICE OF POTENTIAL CLAIMS If You first become aware during the Policy Period of any Wrongful Act that might be reasonably likely give rise to a covered Claim, You may give written notice to Us of such potential Claim during the Policy Period. Such notice must include to the fullest extent possible: 1. the identity of the potential claimant; 2. the identity of the person(s)who allegedly committed the Wrongful Act; 3. the date of the alleged Wrongful Act; 4. specific details of the alleged Wrongful Act; and 5. any written notice from the potential claimant describing the Wrongful Act. If such notice is accepted as a "potential Claim," then any actual Claim that is subsequently made shall be deemed to have been first made on the date such "potential Claim"was first reported to Us. Provided, however, You may not report "potential Claims" during any purchased Optional Extended Reporting Period. C. OPTIONAL EXTENDED REPORTING PERIOD 1. If We or the Named Insured cancel or non-renew this Policy (as described by Endorsement hereto), then the Named Insured shall have the right to purchase for an additional premium an Optional Extended Reporting Period. Provided, DPL P001 CW(05/13) 4 ©Hiscox Inc.All rights reserved. PROFESSIONAL LIABILITY - US DIRECT HISCOX ERRORS AND OMISSIONS J however, the right to purchase an Optional Extended Reporting Period shall not apply if: a. this Policy is canceled by Us for nonpayment of premium (as described by Endorsement hereto); or b. the total premium for this Policy has not been fully paid. 2. The Optional Extended Reporting Period will apply only to Claims that: a. are first made against You and reported to Us during such Optional Extended Reporting Period; and b. are for Wrongful Acts committed on or after the Retroactive Date but prior to the effective date of cancellation or non-renewal (as described by Endorsement hereto). 3. The additional premium for such Optional Extended Reporting Period shall not exceed 200% of the annualized expiring premium for an Optional Extended Reporting Period of 3 years. The additional premium for such Optional Extended Reporting Period shall be fully earned at the inception of such Optional Extended Reporting Period. 4. Notice of election and full payment of the additional premium for the Optional Extended Reporting Period must be received within 30 days after the effective date of cancellation or non-renewal (as described by Endorsement hereto). In the event the additional premium is not received within the 30 days, any right to purchase the Optional Extended Reporting Period shall lapse and no further Optional Extended Reporting Period shall be offered. The Limits of Liability applicable during any purchased Optional Extended Reporting Period shall be the remaining available Limits of Liability under this canceled or non-renewed Policy (as described by Endorsement hereto). There shall be no separate or additional Limit of Liability available for any purchased Optional Extended Reporting Period and the purchase of any Optional Extended Reporting Period shall in no way increase the Limit of Liability set forth in Item 3. of the Declarations. • This Policy does not apply to and We shall have no obligation to pay any Damages, Claim Expenses or Supplemental Payments for any Claim: A. based upon or arising out of any actual or alleged fraud, dishonesty, criminal conduct, or any knowingly wrongful, malicious, or intentional acts or omissions; provided, however, that: 1. We will pay Claim Expenses until there is a final adjudication establishing such conduct, at which time You shall reimburse Us for such Claim Expenses; and 2. this exclusion shall not apply to otherwise covered intentional acts or omissions resulting in a Personal Injury. DPL P001 CW(05/13) 5 ©Hiscox Inc.All rights reserved. PROFESSIONAL LIABILITY - US DIRECT HISCOX ERRORS AND OMISSIONS B. based upon or arising out of any actual or alleged gaining of any profit or advantage to which You were not legally entitled. C. based upon or arising out of any actual or alleged wrongful termination, retaliation or discrimination against or harassment of any past, present, future or potential Employee, including but not limited to any violations of federal, state or local statutory or common law. D. based upon or arising out of any actual or alleged Wrongful Act that: 1. was committed prior to the Retroactive Date; 2. has been the subject of any notice given under any other policy of which this Policy is a renewal or replacement; or 3. You had knowledge of prior to the Policy Period and had a reasonable basis to believe that such Wrongful Act could give rise to a Claim; provided, however, that if this Policy is a renewal or replacement of a previous policy issued by Us providing materially identical coverage, the Policy Period referred to in this paragraph will be deemed to refer to the inception date of the first such policy issued by Us. E. brought by or on behalf of any federal, state or local government agency or professional or trade licensing organization; provided, however, this exclusion shall not apply to claims brought in their capacity as a client receiving Your Professional Services. F. brought by or on behalf of one Insured against another Insured. G. brought by or on behalf of any person or entity maintaining Effective Control of You. H. based upon or arising out of any actual or alleged violation of the following laws, including any similar provisions of any federal, state or local statutory or common law: 1. the Securities Act of 1933 (as amended); 2. the Securities Exchange Act of 1934 (as amended); 3. any state blue sky or securities laws (as amended); 4. the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. (as amended); 5. the Employee Retirement Income Security Act of 1974 (as amended); including any rules or regulations promulgated thereunder. I. based upon or arising out of any actual or alleged obligation under any Workers' Compensation, Unemployment Compensation, Employers Liability or Disability Benefit Law, including any similar provisions of any federal, state or local statutory or common law. J. based upon or arising out of any actual or alleged liability of others that You assume under any contract or agreement unless such liability would have attached in the absence of such contract or agreement. DPL P001 CV/(OS113) 6 ©Hiscox Inc.All rights reserved. PROFESSIONAL LIABILITY - US DIRECT HISCOX ERRORS AND OMISSIONS K. based upon or arising out of any actual or alleged Bodily Injury or Property Damage. L. based upon or arising out of any actual, alleged or threatened discharge, dispersal, release or escape of Pollutants, including any direction or request to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize Pollutants. M. based upon or arising out of any actual or alleged infringement of any copyright, trademark, trade dress, trade name, service mark, service name, title, slogan or patent or theft of trade secret. N. based upon or arising out of any actual or alleged false or deceptive advertising of Your goods or services or misrepresentation in advertising of Your goods or services, including but not limited to any wrongful description of prices of Your goods or services or the quality or performance of Your goods or services. O. based upon or arising out of any actual or alleged breach of contract or breach of any implied or express warranty or guarantee; provided, however, this Exclusion shall not apply to: 1. any obligation you have to perform your Professional Services with reasonable skill or care; or 2. any liability You would have had in absence of such contract, warranty or guarantee. P. based upon or arising out of any actual or alleged violation of any federal, state or local statutes, ordinances or regulations regarding or relating to unsolicited telemarketing, solicitations, emails, faxes or any other communications of any type or nature, including but not limited to any "anti-spam" and "do-not-call" statutes, ordinances, or regulations. Q. based upon or arising out of any actual or alleged failure to procure or maintain adequate insurance or bonds. R. based upon or arising out of any actual or alleged failure to protect any non-public, personally identifiable information in Your care, custody or control. S. based upon or arising out of any actual or alleged actuarial services, medical or nursing services, insurance agent/broker services, legal services or services as an architect or engineer. CLAIMSIV. LIMITS OF DEDUCTIBLE AND RELATED A. LIMIT OF LIABILITY DPL P001 CW(05/13) 7 ®Hiscox Inc.All rights reserved. AM P OFR ESSIONAL LIABILITY - US DIRECT HISCOX ERRORS ANn ON1ISS!ONS Regardless of the number of Claims made during the Policy Period (or applicable Extended Reporting Period), the maximum that We shall be liable to pay for all covered Damages, Claim Expenses and Supplemental Payments shall be as follows: 1. The amount set forth in Item 3.A. of the Declarations as "Each Claim" shall be the maximum amount for each covered Claim. 2. The amount set forth in Item 3.13. of the Declarations as "Aggregate for all Claims" is the maximum amount for all Claims combined. 3. Notwithstanding 1. and 2. above, Our liability for Supplemental Payments shall not exceed $250 per day for each Insured up to $5,000 per Claim, which amounts shall reduce the amounts described in 1. and 2. above. B. DEDUCTIBLE 1. We shall not be responsible for payment of Damages or Claims Expenses until the Deductible amount has been satisfied. 2. We may at Our discretion advance payment of Damages or Claims Expenses within the Deductible amount on Your behalf, but You shall reimburse Us for any such amounts as soon as We request such reimbursement. 3. No Deductible amount shall apply to Supplemental Payments. C. RELATED CLAIMS For purposes of the applicable Deductible and Limit of Liability, all Claims based upon or arising out of continuous, repeated, related or interrelated Wrongful Acts shall be considered a single Claim first made against You in the Policy Period the first such Claim was made. OTHERV. COVERAGEMATTERS AFFECTING A. ESTATES, HEIRS, LEGAL REPRESENTATIVES, SPOUSES & DOMESTIC PARTNERS This Policy shall apply to Claims brought against: 1. the heirs, executors, administrators, trustees in bankruptcy, assignees and legal representatives of any Insured in the event of such Insured's death or disability, or 2. the legal spouse or legal domestic partner of any Insured; but only: 1. for the Wrongful Acts of such Insured; or LPL P001 CW(05113) 8 ©Hiscox Inc.All rights reserved. PROFESSIONAL LIABILITY - US DIRECT H I SCOX ERRORS AND OMISSIONS 2. in connection with their ownership interest in property which the claimant seeks as recovery for actual or alleged Wrongful Acts of such Insured. B. INSURED DUTY TO COOPERATE You shall have the duty to cooperate with Us in the defense, investigation and settlement of any Claim, including but not limited to: 1. upon request, submit to examination and interrogation under oath by Our representative; 2. attend hearings, depositions and trials as requested by Us; 3. assist in securing and giving evidence and obtaining the attendance of witnesses; 4. provide written statements to Our representative and meet with such representative for the purpose of investigation and/or defense; and 5. provide all documents We may reasonably require. C. INSURED OBLIGATION NOT TO INCUR EXPENSE OR ADMIT LIABILITY You shall not, except at Your own cost, make any payment, incur any expense, admit any liability, settle any Claim or assume any obligation without Our prior consent. D. ACTION AGAINST THE INSURER No action shall be taken against Us unless: 1. You have complied fully with all the terms and conditions of this Policy; and 2. the amount of Your obligation to pay shall have been finally determined either by judgment against You after actual trial, or by written agreement between You, Us and the claimant. No person or organization shall have any right under this Policy to join Us as a party to any Claim against You nor shall We be impleaded by You or Your legal representatives in any such Claim. E. OTHERINSURANCE This Policy shall be excess insurance over any other valid and collectable insurance available to You, whether such other insurance is stated to be primary, contributory, excess, contingent or otherwise, unless such other insurance is written only as a specific excess insurance over the Limit of Liability provided in this Policy. F. SUBROGATION 1. In the event of any payment by Us under this Policy,We shall be subrogated to all of Your rights of recovery to such payment. 2. You shall do everything that may be necessary to secure and preserve such subrogation rights, including but not limited to the execution of any documents necessary to allow Us to bring suit in Your name. DPL P001 CW(05/13) 9 ©Hiscox Inc.All rights reserved. HISCOX INSURANCE COMPANY INC. 4/0 HISCOX Endorsement NAMED INSURED: Phd. Economic Development, LCC E5018.2 Management/Business Consulting Services Endorsement Page 1 of 2 In consideration of the premium charged, it is understood and agreed that the Policy is amended as follows: 1. In Clause VI. DEFINITIONS, paragraph O., "Professional Services," is amended to read as follows: O. Professional Services means management consulting and/or business consulting services performed for others for compensation, including but not limited to: i. advising on general business operations, strategy, organizational structure, human resources, marketing and sales campaigns, systems or ecological/" green" issues; and ii.project management. 2. Clause VI. DEFINITIONS is amended to include the following at the end thereof: MC-A. Employee Benefit Plan means any plan created or maintained by an employer or employee organization for the benefit of its employees, directors, partners, trustees, or officers, including but not limited to pension plans and employee welfare plans. 3. Clause III. EXCLUSIONS is amended to include the following at the end thereof: MC-A. based upon or arising out of any actual or alleged commingling of or inability or failure to safeguard funds. MC-B. based upon or arising out of any actual or alleged compilation of audited financial statements. MC-C. based upon or arising out of the performance of or failure to perform audit attestation services. MC-D. based upon or arising out of the performance of any services in connection with mergers and/or acquisitions. MC-E. based upon or arising out of the performance of any services in connection with the valuation of any entity or tangible or intangible property. MC-F. based upon or arising out of any actual or alleged promise, warranty, or guarantee of the future value of any real or personal property. MC-G. based upon or arising out of any actual or alleged insolvency, receivership, bankruptcy, liquidation, or financial inability of any Employee Benefit Plan or insurance company. MC-H. based upon or arising out of any actual or alleged sale of any Employee Benefit Plan. MC-1. based upon or arising out of any actual or alleged performance or failure to perform investment advisory services, including but not limited to the following: 1. the selection of any investment manager, investment advisory, custodial, or similar firm; 2. the promise or guarantee of the future performance of value of investments, or rate of return or interest, HISCOX INSURANCE COMPANY INC. HISCOX Endorsement 1 NAMED INSURED: Phd. Economic Development, LCC E5018.2 Management/Business Consulting Services Endorsement Page 2 of 2 3. the fluctuation in the value of any security; 4. any failure of investments to perform as expected or desired; or 5. acting as an investment advisor as defined in Section 202(11)of the Investment Advisors Act of 1940. MC-J. based upon or arising out of Your performance of or failure to perform Professional Services in connection with the following industries,fields, or activities: 1. actuarial advice; 2. aerospace consulting or advice; 3. architecture or engineering advice; 4. construction management or advice; 5. credit counseling; 6. environmental consulting or advice; 7. financing or financial auditing; 8. general contracting; 9. home/physical inspection services; 10. insurance placement or advice; 11. investment or tax advice; 12. land acquisition; 13. law enforcement training; 14. legal advice or the practice of law; 15. lobbying and/or political advice; 16. medical advice or the practice of medicine; 17. mining consulting or advice; 18. oil, gas, or petroleum consulting or advice; 19. physical installation services; 20. property management; 21. repossession services; 22. safety consulting or advice; 23. Your sale of any goods or products;or 24. staffing/placement services. All other terms and conditions remain unchanged. Endorsement effective:June 29, 2018 Policy No.: UDC-2297632-EO-18 Endorsement No: 1 ,I �� 4 a, By: Kathleen Ray (Appointed Representative) DPL E5018 CW (08/15) HISCOX INSURANCE COMPANY INC. n n HISCOX Endorsement 2 NAMED INSURED: Phd. Economic Development, LCC E5102.1 California Amendatory Endorsement Page 1 of 3 This endorsement modifies insurance provided under the following: PROFESSIONAL LIABILITY- ERRORS AND OMISSIONS INSURANCE In consideration of the premium charged, it is understood and agreed that the Policy is modified as follows: 1. Section V. OTHER MATTERS AFFECTING COVERAGE is amended to include the following at the end thereof: CANCELLATION Notice of Cancellation A. The Named Insured may cancel this Policy by giving Us advance written notice stating when thereafter such cancellation shall be effective. If the Named Insured cancels this Policy, the refund may be less than pro rata. Provided, however, if this Policy shall be cancelled by the Named Insured within 14 days of the inception of the Policy Period without having submitted a Claim, We shall return in full any premium amount actually paid to Us. In such event, the effective date of cancellation shall be deemed to be the inception date of the Policy Period. B. Policies In Effect For 60 Days or Less If this Policy has been in effect for sixty (60) days or less, and is not a renewal of a Policy We have previously issued, We may cancel this Policy by mailing or delivering to the Named Insured at the mailing address shown in the Declarations and to the producer of record, if any, advance written notice of cancellation stating the reason for cancellation at least : Ten (10) days before the effective date of cancellation if We cancel for: (a) Non-payment of premium; or (b) Discovery of fraud by: i. The Insured or the Insured's representative in obtaining this insurance; or ii. The Insured or the Insured's representative in pursuing a Claim under the Policy. Thirty(30) days before the effective date of cancellation if We cancel for any other reason. C. Policies In Effect For More Than 60 Days If this Policy has been in effect for more than sixty (60) days, We may also cancel this Policy by mailing or delivering to the Named Insured at the address shown in the Declarations,the producer of record, if any, written notice, including the reason for cancellation, stating when not less than thirty(30) days thereafter (or ten (10) days thereafter when cancellation is due to non-payment of premium or discovery of fraud), the cancellation shall be effective. HISCOX INSURANCE COMPANY INC. 410 HISCOX Endorsement 2 NAMED INSURED: Phd. Economic Development, LCC E5102.1 California Amendatory Endorsement Page 2 of 3 We may only cancel this Policy for one or more of the following reasons: (a) Nonpayment of premium, including payment due on a prior policy issued by Us and due during the current policy term covering the same risks; (b) Discovery of fraud or material misrepresentation by: i. The Insured or the Insured's representative in obtaining this insurance; or ii.The Insured or the Insured's representative in pursuing a Claim under the Policy. (c) A judgment by a court or an administrative tribunal that the Insured has 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 the Insured or the Insured's representative, which materially increase any of the risks insured against; (a) Failure by the Insured or the Insured's representative to implement reasonable loss control requirements, agreed to by the Insured 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 i. Loss of, or changes in, our reinsurance covering all or part of the risk would threaten Our financial integrity or solvency; or ii. Continuation of the policy coverage would: a. Place Us in violation of California law or the laws of the state where We are domiciled; or b. Threaten Our solvency. (g) A change by the Insured or the Insured's representative in the activities or property of the commercial or industrial enterprise,which results in a materially added, increased or changed risk, is included in the Policy. D. The mailing of the notice of cancellation shall be sufficient proof of notice and this Policy shall terminate at the date and hour specified in such notice. If We cancel this Policy, any return premium shall be calculated pro rata. Payment or tender of any unearned premium by Us shall not be a condition precedent to the effectiveness of the cancellation, but such payment shall be made as soon as practicable. Nonrenewal A. If We elect not to renew this Policy,We will mail or deliver to the Named Insured written notice of nonrenewal, stating the reason for nonrenewal, not less than sixty HISCOX INSURANCE COMPANY INC. Am HISCOX Endorsement NAMED INSURED: Phd. Economic Development, LCC E5102.1 California Amendatory Endorsement Page 3 of 3 (60) days, but not more than one hundred twenty (120) days before the end of the Policy Period. We will mail the notice of nonrenewal to the Named Insured at the last mailing address known Us. If the notice of nonrenewal is mailed, proof of mailing will be sufficient proof of notice. B. We are not required to send notice of nonrenewal in the following situations: (a) 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. (b) If the policy has been extended for 90 days or less, provided that notice has been given in accordance with paragraph A above. (c) If the Named Insured has obtained replacement coverage, or if the Named Insured has agreed, in writing, within 60 days of the termination of the Policy, to obtain that coverage. (d) If the Policy is for a period of no more than 60 days and the Named Insured is notified at the time of issuance that it will not be renewed. (e) If the 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. (f) If We made a written offer to the Named Insured, in accordance with the timeframes shown in paragraph A above, to renew the Policy under changed terms or conditions or at an increased premium rate, when the increase exceeds 25%. 2. Section VII. DEFINITIONS, Paragraph E Damages, is modified to the extent necessary to provide the following: Punitive and exemplary damages shall not be insurable in cases where California law governs the Claim. 3. The Policy is amended by adding the following Clause at the end thereof: Policy Conflicts To the extent any term or condition contained in the Policy or any Endorsement attached thereto conflicts with any term or condition contained in this or any other State Amendatory Endorsement attached to the Policy, such terms and conditions most favorable to the Insured shall apply. All other terms and conditions remain unchanged. HISCOX INSURANCE COMPANY INC. AM HISCOX Endorsement effective:June 29, 2018 Policy No.: UDC-2297632-EO-18 Endorsement No: 2 2� By : Kathleen Ray (Appointed Representative) DPL E5102 CA(01/10) HI SCOX Hiscox Insurance Company Inc. Policy Number: UDC-2297632-EO-18 Named Insured: Phd. Economic Development, LCC Endorsement Number: 3 Endorsement Effective: June 29,2018 E5424.1 Blanket Additional Insured Endorsement (PL) In consideration of the premium charged, it is understood and agreed that the Policy is amended as follows: 1. In Clause VI. DEFINITIONS, paragraph V., "'You' or 'Your'," is amended to include the following at the end thereof: You or Your shall also include any Additional Insured but only for the Wrongful Acts of those contemplated in paragraphs 1., 2. or 3. of the definition of"'You'or'Your'": 2. The following definition is added to Clause VI. DEFINITIONS: AI-A. Additional Insured means any person(s) or organization(s) with whom You have agreed in a written contract or agreement to add them as an additional insured to a policy providing the type of coverage afforded by this Policy, provided the contract or agreement: 1. is currently in effect or becomes effective during the Policy Period;and 2. was executed before the Professional Services from which the Claim arises were performed. 3. In Clause III. EXCLUSIONS, paragraph F. is deleted in its entirety and replaced with the following: F. brought by or on behalf of one Insured against another Insured: provided, however, this Exclusion will not apply to any Claim brought by an Additional Insured in any capacity other than that of an Additional Insured. All other terms and conditions remain unchanged. DPL E5424 CW(02/15) Includes copyrighted material of Insurance Services Office,Inc.,with its Page 1 of 1 permission. HI SCOX Hiscox Insurance Company Inc. ECONOMIC AND TRADE SANCTIONS POLICYHOLDER NOTICE Hiscox is committed to complying with the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) requirements. OFAC administers and enforces economic sanctions policy based on Presidential declarations of national emergency. OFAC has identified and listed numerous foreign agents, front organizations,terrorists, and narcotics traffickers as Specially Designated Nationals (SDN's)and Blocked Persons. OFAC has also identified Sanctioned Countries. A list of Specially Designated Nationals, Blocked Persons and Sanctioned Countries may be found on the United States Treasury's web site httpl/www.treas.gov/offices/enforcemenUofac/. Economic sanctions prohibit all United States citizens (including corporations and other entities) and permanent resident aliens from engaging in transactions with Specially Designated Nationals, Blocked Persons and Sanctioned Countries. Hiscox may not accept premium from or issue a policy to insure property of or make a claim payment to a Specially Designated National or Blocked Person. Hiscox may not engage in business transactions with a Sanctioned Country. A Specially Designated National or Blocked Person is any person who is determined as such by the Secretary of Treasury. A Sanctioned Country is any country that is the subject of trade or economic embargoes imposed by the laws or regulations of the United States. In accordance with laws and regulations of the United States concerning economic and trade embargoes, this policy may be rendered void from its inception with respect to any term or condition of this policy that violates any laws or regulations of the United States concerning economic and trade embargoes including, but not limited to the following: (1) Any insured under this Policy, or any person or entity claiming the benefits of such insured, who is or becomes a Specially Designated National or Blocked Person or who is otherwise subject to US economic trade sanctions; (2) Any claim or suit that is brought in a Sanctioned Country or by a Sanctioned Country government,where any action in connection with such claim or suit is prohibited by US economic or trade sanctions; (3) Any claim or suit that is brought by any Specially Designated National or Blocked Person or any person or entity who is otherwise subject to US economic or trade sanctions; (4) Property that is located in a Sanctioned Country or that is owned by, rented to or in the care,custody or control of a Sanctioned Country government, where any activities related to such property are prohibited by US economic or trade sanctions;or (5) Property that is owned by, rented to or in the care,custody or control of a Specially Designated National or Blocked Person, or any person or entity who is otherwise subject to US economic or trade sanctions. Please read your Policy carefully and discuss with your broker/agent or insurance professional. You may also visit the US Treasury's website at htto://Www.treas.gov/offices/enforcemenUofac/. INT N001 CW 01 09 Page 1 of 1