Loading...
HomeMy WebLinkAboutProspectors Property Management - 2013 Agreement for 7289 Rosanna StreetAGREEMENT FOR SERVICES This AGREEMENT made this 1 st day of January, 2013, between: CITY: City of Gilroy, having a principal place of business at 7351 Rosanna Street, Gilroy, California Prospectors Property Management, Inc. having a principal place of business at 17770 Monterey Road, Suite A, Morgan Hill, CA 95037. ARTICLE 1. TERM OF AGREEMENT This Agreement will become effective on January 1, 2013 and will continue in effect through December 31, 2015 unless terminated in accordance with the provisions of Article 7 of this Agreement. ARTICLE 2. INDEPENDENT CONTRACTOR STATUS It is the express intention of the parties that CONSULTANT is an independent contractor and not an employee, agent, joint venturer or partner of CITY. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between CITY and CONSULTANT or any employee or agent of CONSULTANT. Both parties acknowledge that CONSULTANT is not an employee for state or federal tax purposes. CONSULTANT shall not be entitled to any of the rights or benefits afforded to CITY'S employees, including, without limitation, disability or unemployment insurance, workers' compensation, medical insurance, sick leave, retirement benefits or any other employment benefits. CONSULTANT shall retain the right to perform services for others during the term of this Agreement. ARTICLE 3. SERVICES TO BE PERFORMED BY CONSULTANT Specific Services CONSULTANT agrees to: Perform the services as outlined in Exhibit "A" within the time periods described therein. Method of Performing Services CONSULTANT shall determine the method, details and means of performing the above - described services. CITY shall have no right to, and shall not, control the manner or determine the method of accomplishing CONSULTANT'S services. IMDOLINGER11070812.1 101612 - 04706083 -1- Employment of Assistants CONSULTANT may, at the CONSULTANT'S own expense, employ such assistants as CONSULTANT deems necessary to perform the services required of CONSULTANT by this Agreement, subject to the prohibition against assignment and subcontracting contained in Article 5 below. CITY may not control, direct, or supervise CONSULTANT'S assistants in the performance of those services. CONSULTANT assumes full and sole responsibility for the payment of all compensation and expenses of these assistants and for all state and federal income tax, unemployment insurance, Social Security, disability insurance and other applicable withholding. Place of Work CONSULTANT shall perform the services required by this Agreement at any place or location and at such times as CONSULTANT shall determine is necessary to properly and timely perform CONSULTANT'S services. ARTICLE 4. COMPENSATION In consideration for the services to be performed by CONSULTANT, CITY agrees to pay CONSULTANT as provided for in Exhibit "B ", "Payment Schedule ". Invoices This Section is omitted in its entirety. Payment Payment shall be due according to the payment schedule set forth in Exhibit "B ". Expenses CONSULTANT shall be responsible for all costs and expenses incident to the performance of services for CITY, including but not limited to, all costs of equipment used or provided by CONSULTANT, all fees, fines, licenses, bonds or taxes required of or imposed against CONSULTANT and all other of CONSULTANT'S costs of doing business. CITY shall not be responsible for any expenses incurred by CONSULTANT in performing services for CITY. 1MDOLINGER11070812.1 101612 - 04706083 -2- ARTICLE 5. OBLIGATIONS OF CONSULTANT Tools and Instrumentalities CONSULTANT shall supply all tools and instrumentalities required to perform the services under this Agreement at its sole cost and expense. CONSULTANT is not required to purchase or rent any tools, equipment or services from CITY. Licenses CONSULTANT shall possess a State of California Contractor's license in the appropriate category for performing services under this Agreement. CONSULTANT shall obtain a City of Gilroy Business License. Workers' Compensation CONSULTANT agrees to provides workers' compensation insurance for CONSULTANT'S employees and agents and agrees to hold harmless, defend with counsel acceptable to CITY and indemnify CITY, its officers, representatives, agents and employees from and against any and all claims, suits, damages, costs, fees, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, arising out of any injury, disability, or death of any of CONSULTANT'S employees. Indemnification of Liability, Duty to Defend A. As to professional liability, to the fullest extent permitted by law, CONSULTANT shall defend, through counsel approved by CITY (which approval shall not be unreasonably withheld), indemnify and hold harmless CITY, its officers, representatives, agents and employees against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, to the extent arising or resulting directly or indirectly from any willful or negligent acts, errors or omissions of CONSULTANT or CONSULTANT'S assistants, employees or agents, including all claims relating to the injury or death of any person or damage to any property. B. As to other liability, to the fullest extent permitted by law, CONSULTANT shall defend, through counsel approved by CITY (which approval shall not be unreasonably withheld), indemnify and hold harmless CITY, its officers, representatives, agents and employees against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, arising or resulting directly or indirectly from any act or omission of CONSULTANT or CONSULTANT'S assistants, employees or agents, including all claims relating to the injury or death of any person or damage to any property. I M D O L I N G E R11070812.1 101612 - 04706083 -3- Insurance In addition to any other obligations under this Agreement, CONSULTANT shall, at no cost to CITY, obtain and maintain throughout the term of this Agreement: (a) Commercial Liability Insurance, including coverage for owned and non -owned automobiles, with a minimum combined single limit coverage of $1,000,000 per occurrence for all damages due to bodily injury, sickness or disease, or death to any person, and damage to property, including the loss of use thereof, and (b) Professional Liability Insurance (Errors & Omissions) with a minimum coverage of $1,000,000 per occurrence and aggregate. As a condition precedent to CITY'S obligations under this Agreement, CONSULTANT shall furnish evidence of such coverage (naming CITY, its officers and employees as additional insureds on the Commercial Liability insurance policy referred to in (a) immediately above) and requiring thirty (30) days written notice of policy lapse or cancellation, or of a material change in policy terms. Assignment Notwithstanding any other provision of this Agreement, neither this Agreement nor any duties or obligations of CONSULTANT under this Agreement may be assigned or subcontracted by CONSULTANT without the prior written consent of CITY, which CITY may withhold in its sole and absolute discretion. State and Federal Taxes As CONSULTANT is not CITY'S employee, CONSULTANT shall be responsible for paying all required state and federal taxes. Without limiting the foregoing, CONSULTANT acknowledges and agrees that: *CITY will not withhold FICA (Social Security) from CONSULTANT'S payments; *CITY will not make state or federal unemployment insurance contributions on CONSULTANT'S behalf, *CITY will not withhold state or federal income tax from payment to CONSULTANT; *CITY will not make disability insurance contributions on behalf of CONSULTANT; *CITY will not obtain workers' compensation insurance on behalf of CONSULTANT. ARTICLE 6. OBLIGATIONS OF CITY Cooperation of City CITY agrees to respond to all reasonable requests of CONSULTANT and provide access, at reasonable times following receipt by CITY of reasonable notice, to all documents reasonably necessary to the performance of CONSULTANT'S duties under this Agreement. IMDOLINGER11070812.1 101612 - 04706083 IN Assignment CITY may assign this Agreement or any duties or obligations thereunder to a successor governmental entity without the consent of CONSULTANT. Such assignment shall not release CONSULTANT from any of CONSULTANT'S duties or obligations under this Agreement. events: ARTICLE 7. TERMINATION OF AGREEMENT Termination on Occurrence of Stated Events This Agreement shall terminate automatically on the occurrence of any of the following 1. Bankruptcy or insolvency of either party; 2. Sale of the business of either party; I Death of either party. Termination by City for Default of Consultant Should CONSULTANT default in the performance of this Agreement or materially breach any of its provisions, CITY, at CITY'S option, may terminate this Agreement by giving written notification to CONSULTANT. For the purposes of this section, material breach of this Agreement shall include, but not be limited to the following: Not performing any of its services professionally and /or timely. 2. CONSULTANT'S breach of any of its representations, warranties or covenants contained in this Agreement. CONSULTANT shall be entitled to payment only for work satisfactorily completed through the date of the termination notice, as reasonably determined by CITY, provided that such payment shall not exceed the amounts set forth in this Agreement for the tasks described on Exhibit "B" which have been fully, competently and timely rendered by CONSULTANT. Notwithstanding the foregoing, if CITY terminates this Agreement due to CONSULTANT'S default in the performance of this Agreement or material breach by CONSULTANT of any of its provisions, then in addition to any other rights and remedies CITY may have, CONSULTANT shall reimburse CITY, within ten (10) days after demand, for any and all costs and expenses incurred by CITY in order to complete the tasks constituting the scope of work as described in this Agreement, to the extent such costs and expenses exceed the amounts CITY would have been obligated to pay CONSULTANT for the performance of that task pursuant to this Agreement. 1MDOLINGER11070812.1 101612 - 04706083 -5- Termination for Failure to Make Agreed -Upon Payments This section is omitted in its entirety. Transition After Termination Upon termination, CONSULTANT shall immediately stop work, unless cessation could potentially cause any damage or harm to person or property, in which case CONSULTANT shall cease such work as soon as it is safe to do so. CONSULTANT shall incur no further expenses in connection with this Agreement. CONSULTANT shall promptly deliver to CITY all work done toward completion of its services, and shall act in such a manner as to facilitate any new CONSULTANT'S assumption of duties. ARTICLE 8. GENERAL PROVISIONS Notices Any notice to be given hereunder by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to a party at the address appearing below such party's signature below, but each party may change the address by written notice in accordance with this paragraph. Notices delivered personally will be deemed delivered as of actual receipt; mailed notices will be deemed delivered as of three (3) days after mailing. Entire Agreement of the Parties This Agreement supersedes any and all prior agreements, either oral or written, between the parties hereto with respect to the rendering of services by CONSULTANT for CITY and contains all the covenants and agreements between the parties with respect to the rendering of such services in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing signed by both parties. Partial Invalidity If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way. 1MDOLINGER11070812.1 101612 - 04706083 in Americans With Disabilities Act of 1990 Throughout the term of this Agreement, the CONSULTANT shall comply fully with all applicable provisions of the Americans With Disabilities Act of 1990 ( "the Act ") in its current form and as it may be amended from time to time. The Contractor shall also require such compliance of all subcontractors performing work under this Agreement, subject to the prohibition against assignment and subcontracting contained in Article 5 above. The CONSULTANT shall defend with counsel acceptable to CITY, indemnify and hold harmless the CITY OF GILROY, its officers, employees, agents and representatives from and against all suits, claims, demands, damages, costs, causes of action, losses, liabilities, expenses and fees, including without limitation attorneys' fees, that may arise out of any violations of the Act by the CONSULTANT, its subcontractors, or the officers, employees, agents or representatives of either. Compliance With Laws The CONSULTANT shall keep itself informed of all State and National laws and all municipal ordinances and regulations of the CITY which in any manner affect those engaged or employed in the work, or the materials used in the work, or which in any way affect the conduct of the work, and of all such orders and decrees of bodies or tribunals having any jurisdiction or authority over the same. Without limiting the foregoing, CONSULTANT agrees to observe the provisions of the Municipal Code of the CITY OF GILROY, obligating every contractor or subcontractor under a contract or subcontract to the CITY OF GILROY for public works or for goods or services to refrain from discriminatory employment or subcontracting practices on the basis of the race, color, sex, religious creed, national origin or ancestry of any employee, applicant for employment, or any potential subcontractor. Attorneys' Fees If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled. Governing Law and Venue This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws provisions of any jurisdiction. The exclusive jurisdiction and venue with respect to any and all disputes arising hereunder shall be in state and federal courts located in Santa Clara County, California. I M D O L I N G E R11070812.1 101612 - 04706083 -7- Executed at Gilroy, California, on the date and year first above written. CONSULTANT: Address for Notices: 1 i Social Security or Taxpayer Identification Number: Q 1 M D O L I N G E R11070812.1 101612 - 04706083 CITY: Cl Y GILROY By: (Print Name) Address for Notices: Rick Brandini, Facilities Superintendent 7351 Rosanna Street Gilroy, CA 95020 Attn: City Administrator Approved as to Form: ��ity Attorney EXHIBIT "A" SCOPE OF SERVICES The City of Gilroy is contracting with a management firm to perform the following services necessary for the care, protection, and operation of the property located 7289 Rosanna Street, Gilroy, CA 95020. 1. Collect all rents and other income from the property promptly and deposit all income less any sums paid out into a bank account set up by the City for the property. 2. Send appropriate notices to the tenants for late or nonpayment of rent violations of the rules and perform or oversee evictions. 3. Market, advertise, and screen for tenants as vacancies occur. Must have familiarity with the local market Fair Housing laws and low income rental procedures. Provide city a copy of new leases and the income verification documentation for all new leases within thirty days from entering into a lease. Management Company is expected to use reasonable efforts to keep the property rented and negotiate and execute all rental agreements and leases in the property. 4. Establish a trust account for new tenant deposits when received and provide monthly report of the account income and expenditures. Take calls from the tenants on a 24 hour basis and respond to tenants requests for repairs and emergency issues as part of the ongoing management responsibility. 6. Notify City of need for repairs. 7. Participate in an annual monitoring inspection with the City staff and provide a written report on the property with a recap of the income expenses and tenant verification of the property within the first quarter of each year. 8. Provide any and all other services necessary to properly manage real property including but not limited to keeping apprised of all new and changed legislation affecting the rental of real property. II. NOTICE TO PROCEED /COMPLETION OF SERVICE A. NOTICE TO PROCEED CONSULTANT shall commence services upon delivery to CONSULTANT of written Notice to Proceed. B. COMPLETION OF SERVICES WDOLINGEM1070812.1 101612 - 04706083 When CITY determines that CONSULTANT has satisfactorily completed all of the services defined under this Agreement, CITY shall give CONSULTANT written Notice of Final Acceptance, and CONSULTANT shall not incur any further costs hereunder. CONSULTANT may request this determination of completion when, in its opinion, it has satisfactorily completed all of the services under this Agreement, and if so requested, CITY shall make this determination within two (2) weeks of such request, or if CITY determines that CONSULTANT has not satisfactorily completed all of such services, CITY shall so inform CONSULTANT within this two (2) week period. III. SCHEDULE This section is omitted in its entirety. IV. DIRECT EXPENSES This section is omitted in its entirety. III. GENERAL PROVISIONS A. STANDARD OF WORKMANSHIP CONSULTANT represents and warrants that it has the qualifications, skills and licenses necessary to perform the services, and its duties and obligations, expressed and implied, contained herein, and CITY expressly relies upon CONSULTANT'S representations and warranties regarding its skills, qualifications and licenses. CONSULTANT shall perform such services and duties in conformance to and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. B. RESPONSIBILITY OF CONSULTANT CONSULTANT shall be responsible for the professional quality, technical accuracy, and the coordination of the services furnished by it under this Agreement. The CITY'S review, acceptance or payment for any of the services required under this Agreement shall not be construed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement, and CONSULTANT shall be and remain liable to CITY in accordance with applicable law for all damages to CITY caused by CONSULTANT'S negligent performance of any of the services furnished under this Agreement. C. RIGHT OF CITY TO INSPECT RECORDS OF CONSULTANT CITY, through its authorized employees, representatives or agents, shall have the right, at any and all reasonable times, to audit the books and records (including, but not limited to, invoices, vouchers, canceled checks, time cards, etc.) of CONSULTANT for the purpose of verifying any and all charges made by CONSULTANT in connection with this Agreement. IM DOL I N G E R11070812.1 101612 - 04706083 -10- CONSULTANT shall maintain for a minimum period of three (3) years (from the date of final payment to CONSULTANT), or for any longer period required by law, sufficient books and records in accordance with standard accounting practices to establish the correctness of all charges submitted to CITY by CONSULTANT, all of which shall be made available to CITY at the CITY's offices within five (5) business days after CITY'S request. D. NO PLEDGING OF CITY'S CREDIT. Under no circumstances shall CONSULTANT have the authority or power to pledge the credit of CITY or incur any obligation in the name of CITY. E. OWNERSHIP OF MATERIAL. All material (including information developed on computer(s)) prepared (or caused to be prepared) under this Agreement shall be the property of CITY. F. NO THIRD PARTY BENEFICIARY. This Agreement shall not be construed or deemed to be an agreement for the benefit of any third party or parties, and no third party or parties shall have any claim or right of action hereunder for any cause whatsoever. G. WAIVER. CONSULTANT agrees that waiver by CITY of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement. H. AMENDMENTS. No alterations or changes to the terms of this Agreement shall be valid unless made in writing and signed by both parties hereto. I. CONFLICT OF INTEREST. CONSULTANT certifies that to the best of its knowledge, no CITY employee or office of any public agency interested in this Agreement has any pecuniary interest in the business of CONSULTANT and that no person associated with CONSULTANT has any interest that would constitute a conflict of interest in any manner or degree as to the execution or performance of this Agreement. J. CAPTIONS. The captions of the various sections, paragraphs and subparagraphs of this Agreement are for convenience only and shall not be considered nor referred to for resolving questions or interpretation. WDOLINGEM1070812.1 101612 - 04706083 -11- EXHIBIT "B" PAYMENT SCHEDULE CITY agrees to pay the CONTRACTOR an amount equal to six percent (6 %) of all rents collected as a fee for managing the property. CITY agrees to pay CONTRACTOR a one -time set up of $150.00. The initial fee will be deducted from the first month's remittance to the CITY of rental proceeds. CONTRACTOR agrees to collect the rents and to disburse funds directly into CITY'S bank account or on or before the 10th day of the current month. 1MDOLINGER11070812.1 101612 - 04706083 -1- 02 This Spectrum Policy consists of the Declarations, Coverage Forms, Common Policy Conditions and any 77 other Forms and Endorsements issued to be a part of the Policy. This insurance is provided by the stock VK insurance company of The Hartford Insurance Group shown below. SBA INSURER: SENTINEL INSURANCE COMPANY, LIMITED ONE HARTFORD PLAZA, HARTFORD, CT 06155 COMPANY CODE: A THE it Policy Number: 59 SBA VK7702 SC HARTFORD SPECTRUM POLICY DECLARATIONS Named Insured and Mailing Address: (No., Street, Town, State, Zip Code) PROSPECTORS PROPERTY MANAGEMENT INC. 17770 MONTEREY ROAD 4A MORGAN HILL CA 95037 Policy Period: From 01/25/13 To 01/25/14 1 YEAR 12:01 a.m., Standard time at your mailing address shown above. Exception: 12 noon in New Hampshire. Name of Age ntlBroke r: BURNS & WILCOX OF ARIZONA LTD Code: 305015 Previous Policy Number: 59 SBA VK7702 Named Insured is: CORPORATION Audit Period: NON - AUDITABLE Type of Property Coverage: SPECIAL Insurance Provided: In return for the payment of the premium and subject to all of the terms of this policy, we agree with you to provide insurance as stated in this policy. TOTAL ANNUAL PREMIUM IS: $1,177 Countersigned by Authorized Representative Form SS 00 02 12 06 Page 001 ( CONTINUED ON NEXT PAGE) Process Date: 11/07/12 Policy Expiration Date: 01/25/14 Date SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 Location(s), Building(s), Business of Named Insured and Schedule of Coverages for Premises as designated by Number below. Location: 001 Building: 001 17770 MONTEREY ROAD #A MORGAN HILL CA 95037 Description of Business: Real Estate Agency Deductible: $ 250 PER OCCURRENCE BUILDING AND BUSINESS PERSONAL PROPERTY LIMITS OF INSURANCE BUILDING BUSINESS PERSONAL PROPERTY REPLACEMENT COST PERSONAL PROPERTY OF OTHERS REPLACEMENT COST MONEY AND SECURITIES INSIDE THE PREMISES OUTSIDE THE PREMISES Form SS 00 02 12 06 Process Date: 11/07/12 NO COVERAGE $ 63,000 NO COVERAGE $ 10, 000 $ 5,000 Page 002 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 Location(s), Building(s), Business of Named Insured and Schedule of Coverages for Premises as designated by Number below. Location: 001 Building: 001 PROPERTY OPTIONAL COVERAGES APPLICABLE LIMITS OF INSURANCE TO THIS LOCATION COMPUTERS AND MEDIA COVERAGE $ 15,000 FORM SS 04 41 DEDUCTIBLE: $ 250 WAITING PERIOD: 12 HOURS STRETCH COVERAGES FORM: SS 04 08 THIS FORM INCLUDES MANY ADDITIONAL COVERAGES AND EXTENSIONS OF COVERAGES. A SUMMARY OF THE COVERAGE LIMITS IS ATTACHED. SIGNS AWAY FROM THE INSURED PREMISES: FORM SS 40 25 $ 5,000 SEE FORM IH 1200 FOR THE LOCATION OF THE SIGN. LIMITED FUNGI, BACTERIA OR VIRUS COVERAGE: FORM SS 40 93 THIS IS THE MAXIMUM AMOUNT OF INSURANCE FOR THIS COVERAGE, SUBJECT TO ALL PROPERTY LIMITS FOUND ELSEWHERE ON THIS DECLARATION. INCLUDING BUSINESS INCOME AND EXTRA EXPENSE COVERAGE FOR: Form SS 00 02 12 06 Process Date: 11/07/12 $ 50,000 30 DAYS Page 003 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 PROPERTY OPTIONAL COVERAGES APPLICABLE LIMITS OF INSURANCE TO ALL LOCATIONS BUSINESS INCOME AND EXTRA EXPENSE COVERAGE COVERAGE INCLUDES THE FOLLOWING COVERAGE EXTENSIONS: ACTION OF CIVIL AUTHORITY: EXTENDED BUSINESS INCOME: EQUIPMENT BREAKDOWN COVERAGE COVERAGE FOR DIRECT PHYSICAL LOSS DUE TO: MECHANICAL BREAKDOWN, ARTIFICIALLY GENERATED CURRENT AND STEAM EXPLOSION THIS ADDITIONAL COVERAGE INCLUDES THE FOLLOWING EXTENSIONS HAZARDOUS SUBSTANCES EXPEDITING EXPENSES MECHANICAL BREAKDOWN COVERAGE ONLY APPLIES WHEN BUILDING OR BUSINESS PERSONAL PROPERTY IS SELECTED ON THE POLICY IDENTITY RECOVERY COVERAGE FORM SS 41 12 Form SS 00 02 12 06 Process Date:11 / 0 7 / 12 12 MONTHS ACTUAL LOSS SUSTAINED 30 DAYS 30 CONSECUTIVE DAYS $ 50,000 $ 50,000 $ 15,000 Page 004 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 BUSINESS LIABILITY LIABILITY AND MEDICAL EXPENSES MEDICAL EXPENSES - ANY ONE PERSON PERSONAL AND ADVERTISING INJURY DAMAGES TO PREMISES RENTED TO YOU ANY ONE PREMISES AGGREGATE LIMITS PRODUCTS - COMPLETED OPERATIONS GENERAL AGGREGATE Form SS 00 02 12 06 Process Date: 11/07/12 LIMITS OF INSURANCE $1,000,000 $ 10,000 $1,000, 000 $1, 000, 000 $2,000,000 $2,000,000 Page 005 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 ADDITIONAL INSUREDS: THE FOLLOWING ARE ADDITIONAL INSUREDS FOR BUSINESS LIABILITY COVERAGE IN THIS POLICY. LOCATION 001 BUILDING 001 TYPE MANAGER LESSOR NAME SEE FORM IH 12 00 Form SS 00 02 12 06 Page o oG ( CONTINUED ON NEXT PAGE) Process Date: 11/07/12 Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 Form Numbers of Forms and Endorsements that apply: SS 00 05 10 08 SS 00 07 07 05 SS 00 08 04 05 SS 84 01 09 07 SS 01 21 07 08 SS 04 08 09 07 SS 04 22 07 05 SS 04 30 07 05 SS 04 39 07 05 SS 04 42 09 07 SS 04 44 07 05 SS 04 45 07 05 SS 04 80 03 00 SS 04 86 03 00 SS 40 18 07 05 SS 40 93 07 05 SS 41 12 12 07 SS 41 51 10 09 SS 41 63 06 11 IH 10 01 09 86 SS 05 01 09 12 SS 50 57 04 05 SS 50 19 03 12 IH 99 40 04 09 SS 04 46 10 08 SS 38 25 12 07 SS 83 76 03 12 IH 12 00 11 85 SIGNS AWAY FROM THE INSURED PREMISES IH 12 00 11 85 ADDITIONAL INSURED - MANAGER /LESSOR SS 00 45 12 06 SS 04 19 04 09 SS 04 41 04 09 SS 04 47 04 09 SS 40 25 07 05 SS 41 62 06 11 SS 05 47 09 01 IH 99 41 04 09 Form SS 00 02 12 06 Page 007 Process Date: 11/07/12 Policy Expiration Date: 01/25/14 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 SUPPLEMENTAL DECLARATIONS: A service fee of $ 0007.00 is charged for each installment when your premium is paid in installments. The service fee is $ 0005.00 per withdrawal when you select an electronic fund transfer payment plan. The service fee will be added to the premium amount shown on your premium billing statement. Form SS 00 45 12 06 Process Date: 11/07/12 Policy Expiration Date: 01/25/14 STRETCH SUMMARY SUMMARY OF COVERAGE LIMITS This is a summary of the Coverages and the Limits of Insurance provided by the Stretch Coverage form SS 04 08 which is included in this policy. No coverage is provided by this summary. Refer to coverage form SS 04 08 to determine the scope of your insurance protection. The Limit of Insurance for the following Additional Coverages are in addition to any other limit of insurance provided under this policy: Coverage Accounts Receivable — On /Off- Premises Brands and Labels Claim Expenses Computer Fraud Computers and Media Debris Removal Employee Dishonesty (including ERISA) Fine Arts Forgery Laptop Computers — World -Wide Coverage Off Premises Utility Services — Direct Damage Outdoor Signs Pairs or Sets Personal Property of Others Property at Other Premises Salespersons' Samples Sewer and Drain Back Up Sump Overflow or Sump Pump Failure Temperature Change Tenant Building and Business Personal Property Coverage - Required by Lease Transit Property in the Care of Carriers for Hire Unauthorized Business Card Use Valuable Papers and Records — On /Off- Premises Limit $ 25,000 Up to Business Personal Property Limit $ 10,000 $ 5,000 $ 10,000 $ 25,000 $ 10,000 $ 10,000 $ 10,000 $ 5,000 $ 10,000 Full Value Up to Business Personal Property Limit $ 10,000 $ 10,000 $ 1,000 Included up to Covered Property Limits $ 15,000 $ 10,000 $ 20,000 $ 10,000 $ 2,500 $ 25,000 The Limits of Insurance for the following Coverage Extensions are a replacement of the Limit of Insurance provided under the Standard Property Coverage Form or the Special Property Coverage Form, whichever applies to the policy: Coverage Newly Acquired or Constructed Property — 180 Days Building Business Personal Property Business Income and Extra Expense Outdoor Property Personal Effects Property Off - Premises Limit $1,000,000 $ 500,000 $ 500,000 $ 20,000 aggregate/ $1,000 per item $ 25,000 $ 15,000 Form SS 84 01 09 07 Page 1 of 2 © 2007, The Hartford The following changes apply only if Business Income and Extra Expense are covered under this policy. The Limits of Insurance for the following Business Income and Extra Expense Coverages are in addition to any other Limit of Insurance provided under this policy: Coverage Limit Business Income Extension for Off - Premises Utility Services $ 25,000 Business Income Extension for Web Sites $ 10,000/7 days Business Income from Dependent Properties $ 25,000 The following Limit of Insurance for the following Business Income Coverage is a replacement of the Limit of Insurance provided under the Standard Property Coverage Form or the Special Property Coverage Form, whichever applies to the policy: Coverage Extended Business Income The following changes apply to Loss Payment Conditions: Coverage Valuation Changes Commodity Stock "Finished Stock" Mercantile Stock - Sold Limit 60 Days Limit Included Included Included Page 2 of 2 Form SS 84 01 09 07 POLICY NUMBER: 59 SBA VK7702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. SIGNS AWAY FROM THE INSURED PREMISES Form IH 12 00 1185 T SEQ. NO. 001 Printed in U.S.A. Page 001 Process Date: 11/07/12 Expiration Date: 01/25/14 POLICY NUMBER: 59 SBA VK7702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - MANAGER /LESSOR CITY OF GILROY ITS OFFICERS, REPRESENTATIVES, AGENTS AND EMPLOYEES 7351 ROSANNA STREET MORGAN HILL CALIFORNIA - 95037 Form IH 12 00 11 85 T SEQ. NO. 002 Printed In U.S.A. Page 001 Process Date: 11/07/12 Expiration Date: 01/25/14 1. a, .<a �' 10 Named Insured: PROSPECTORS PROPERTY MANAGEMENT Policy Number: 59 SBA VK7702 Effective Date: 01/25/13 Expiration Date: 01/25/14 Company Name: BURNS & WILCOX OF ARIZONA LTD THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. TRADE OR ECONOMIC SANCTIONS ENDORSEMENT This insurance does not apply to the extent that trade or economic sanctions or other laws or regulations prohibit us from providing insurance, including, but not limited to, the payment of claims. All other terms and conditions remain unchanged. Form IH 99 4104 09 Page 1 of 1 POLICYHOLDER NOTICE - CALIFORNIA Date: 11/07/12 P011cy Number: 59 SBA VK7702 Renewal Date: 01/25/13 Company Name: SENTINEL INSURANCE COMPANY, LIMITED Your Hartford Agent: BURNS & WILCOX OF ARIZONA LTD PROSPECTORS PROPERTY MANAGEMENT INC. 17770 MONTEREY ROAD #A MORGAN HILL CA 95037 Dear Valued Hartford Insured, : -B Your current policy provided by The Hartford will expire shortly. The purpose of this notice is to advise you that The Hartford would like the opportunity to provide you with a policy for the upcoming policy term and to advise you of certain changes to your policy as indicated below. A. Policy Premium () Premium Change: The premium for your renewal policy will be increased in excess of 25% from that charged on your current policy. This increase is based on current information known to us and may be subject to change based on any additional information we may receive from you or your Hartford agent or broker. More information on your premium determination can be obtained from your agent or broker, or from The Hartford. ( ) Premium Change: Your policy is being transferred to an affiliated insurer of The Hartford. The premium for your policy will be increased at renewal. B. Coverage Changes (If appllcablel As noted above, we want to provide you with coverage for the upcoming policy term and this notice is our offer to do so. Your policy for the upcoming term will include certain reductions or additional restrictions in coverage, as indicated by an (x) below. ( ) Increase in Deductible to: ( ) Reduction in Limits to: (X) Reductions in Coverage: SEE REVERSE SIDE ( ) Other Changes or Restrictions in Coverage: You may receive other notices of coverage changes for the upcoming policy term under separate cover. Those other changes will apply in addition to the changes described above. Form IH 70 24 06 11 Page 1 This is not a bill. You will receive a separate bill for all or part of the premium due for your renewal policy. If you do not pay the amount shown by the due date as stated in the bill, your insurance coverage will expire or be cancelled for non - payment of premium. If you have any questions about your policy or about your overall insurance needs, please contact your Hartford agent or broker. We look forward to continuing our relationship and fulfilling your insurance needs. ADDITIONAL COVERAGE RESTRICTIONS REFER TO SS 33 35 - POLICYHOLDER NOTICE BUSINESS LIABILITY AND UMBRELLA FORM CHANGES REFER TO SS 33 65 09 12- CHANGES TO REAL ESTATE DEVELOPMENT & REAL ESTATE MANAGEMENT ACTIVITIES EXCLUSION Form IH 70 24 06 11 Page 2 POLICY NUMBER: 59 SBA VK7702 THIS ENDORSEMENT IS ATTACHED TO AND MADE PART OF YOUR POLICY IN RESPONSE TO THE DISCLOSURE REQUIREMENTS OF THE TERRORISM RISK INSURANCE ACT. DISCLOSURE PURSUANT TO TERRORISM RISK INSURANCE ACT SCHEDULE Terrorism Premium (Certified Acts): $ $23.00 A. Disclosure Of Premium In accordance with the federal Terrorism Risk Insurance Act, as amended ( "TRIA'), we are required to provide you with a notice disclosing the portion of your premium, if any, attributable to coverage for certified acts of terrorism under TRIA. The portion of your premium attributable to such coverage is shown in the Schedule of this endorsement. B. Disclosure Of Federal Share Of Terrorism Losses The United States Department of the Treasury will reimburse insurers for 85% of that portion of insured losses attributable to "certified acts of terrorism" under TRIA that exceeds the applicable insurer deductible. However, if aggregate industry insured losses under TRIA exceed $100 billion in a Program Year (January 1 through December 31), the Treasury shall not make any payment for any portion of the amount of such losses that exceeds $100 billion. The United States government has not charged any premium for their participation in covering terrorism losses. Form SS 83 76 03 12 C. Cap On Insurer Liability for Terrorism Losses If aggregate industry insured losses attributable to "certified acts of terrorism" under TRIA exceed $100 billion in a Program Year (January 1 through December 31) and we have met, or will meet, our insurer deductible under TRIA, we shall not be liable for the payment of any portion of the amount of such losses that exceed $100 billion. In such case, your coverage for terrorism losses may be reduced on a pro -rata basis in accordance with procedures established by the Treasury, based on its estimates of aggregate industry losses and our estimate that we will exceed our insurer deductible. In accordance with the Treasury's procedures, amounts paid for losses may be subject to further adjustments based on differences between actual losses and estimates. D. All other terms and conditions remain the same. © 2012, The Hartford (Includes copyrighted material of the Insurance Services Office, Inc., with its permission.) Page 1 of 1 Policy Number: 59 SBA VK7702 IMPORTANT NOTICE TO POLICYHOLDERS DISCLOSURE PURSUANT TO TERRORISM RISK INSURANCE ACT SCHEDULE Terrorism Premium (Certified Acts): $ $23.00 A. Disclosure Of Premium In accordance with the federal Terrorism Risk Insurance Act, as amended ( "TRIA "), we are required to provide you with a notice disclosing the portion of your premium, if any, attributable to coverage for certified acts of terrorism under TRIA. The portion of your premium attributable to such coverage is shown in the Schedule of this endorsement. B. Disclosure Of Federal Share Of Terrorism Losses The United States Department of the Treasury will reimburse insurers for 85% of that portion of insured losses attributable to "certified acts of terrorism" under TRIA that exceeds the applicable insurer deductible. However, if aggregate industry insured losses under TRIA exceed $100 billion in a Program Year (January 1 through December 31), the Treasury shall not make any payment for any portion of the amount of such losses that exceeds $100 billion. The United States government has not charged any premium for their participation in covering terrorism losses. Form SS 8380 03 12 C. Cap On Insurer Liability for Terrorism Losses If aggregate industry insured losses attributable to "certified acts of terrorism" under TRIA exceed $100 billion in a Program Year (January 1 through December 31), and we have met, or will meet, our insurer deductible under TRIA, we shall not be liable for the payment of any portion of the amount of such losses that exceed $100 billion. In such case, your coverage for terrorism losses may be reduced on a pro -rata basis in accordance with procedures established by the Treasury, based on its estimates of aggregate industry losses and our estimate that we will exceed our insurer deductible. In accordance with the Treasury's procedures, amounts paid for losses may be subject to further adjustments based on differences between actual losses and estimates. D. All other terms and conditions remain the same. Page 1 of 1 © 2012, The Hartford (Includes copyrighted material of the Insurance Services Office, Inc., with its permission.) Process Date: 11/07/12 Policy Expiration Date: 01/25/14 IMPORTANT NOTICE TO POLICYHOLDERS This Notice does not form a part of your policy. This is a summary of the changes to endorsements that may form a part of your policy. This notice does not reference every editorial change made in the endorsements. No coverage is provided by this summary, nor can it be construed to replace any provisions of your policy or endorsements. If there is any conflict between the policy and this summary, the provisions of the policy shall prevail. Please read the policy carefully to determine rights, duties and coverage. Only the provisions of your policy determine the scope of your insurance protection. The changes described below are general in nature. Your policy may contain further changes or modifications, so it remains necessary for you to read your policy closely. Please contact your agent or broker for further information. BUSINESS LIABILITY COVERAGE FORM If this coverage form is part of your Hartford policy, this notice applies to you. Please read it carefully. SS 41 62 06 11 - Amendment of Exclusions and Definition — Personal and Advertising Injury When this endorsement is attached to your policy, Personal and Advertising Injury Liability is changed as follows: In order to elaborate on the intent of the current exclusion for Infringement Of Intellectual Property Rights, that exclusion has been revised to state that there is no coverage under personal and advertising injury for any injury or damage alleged in any claim or suit that also alleges an infringement or violation of any intellectual property right. The scope of the Discrimination exclusion has been expanded to include sole proprietors ( "your direction ") and any other owner, manager or trustee who may direct such discrimination. This may be considered a reduction in coverage. The Employment - Related Practices Exclusion is revised to reinforce that coverage is not provided for any injury to a person associated with the employment of that person, whether it occurs before employment, during employment, or after employment of that person. While this change is a reinforcement of coverage intent, it may result in a decrease in coverage in jurisdictions where courts have ruled the exclusion to be inapplicable in employment- related post- employment claims. Under the definition of "personal and advertising injury", coverage for wrongful eviction now applies to wrongfully- evicted persons or organizations, This change results in a broadening of coverage. SS 40 26 06 11 - Cyberflex Coverage When this endorsement is attached to your policy, changes to the form to elaborate on the intent of the current provisions of the form. The exclusion Infringement of Intellectual Property Rights has been revised to state that there is no coverage under personal and advertising injury for any injury or damage alleged in any claim or suit that also alleges an infringement or violation of any intellectual property right. Form SS 33 35 0611 Page 1 of 2 © 2011, The Hartford We have amended the definition of "your web site ", to state that "your web site" or set of interconnected web pages prepared and maintained by you, or by others on your behalf, for the purpose of promoting your goods, products or services, that is accessible over the internet. SS 50 94 06 11 — Personal and Advertising Injury Exclusion — Copyright Material When this endorsement is attached to your policy, it reinforces that the Personal And Advertising Injury provision p.(7)(a) that was amended on this form supersedes any provision to the contrary. SS 41 63 06 11 —Amendment — Definition of Insured Contract When this endorsement is attached to your policy, it removes "provided the "bodily injury" or property damage" is caused, in whole or in part by you or by those acting on your behalf' from the definition of an Insured Contract. This aligns the definition of an Insured Contract with ISO to protect the insured in an indemnitee agreement that requires them to indemnify and hold harmless another party from that party's own liability. UMBRELLA POLICY PROVISIONS If this coverage form is part of your Hartford policy, this notice applies to you. Please read it carefully. SX 24 33 06 10 — Amendment Of Coverage — Personal And Advertising Injury When this endorsement is attached to your policy, coverage is changed as follows: In order to elaborate on the intent of the current exclusion for Infringement Of Intellectual Property Rights, that exclusion has been revised to state that there is no coverage under personal and advertising injury for any injury or damage alleged in any claim or suit that also alleges an infringement or violation of any intellectual property right. The scope of the Discrimination exclusion has been expanded to include sole proprietors ( "your direction ") and any other owner, manager or trustee who may direct such discrimination. This may be considered a reduction in coverage. Under the definition of "personal and advertising injury", coverage for wrongful eviction now applies to wrongfully- evicted persons or organizations. This change results in a broadening of coverage. Finally, if form SS 40 26 is part of your underlying insurance, we have amended the definition of "your web site ", to state that "your web site" means a web page or set of interconnected web pages prepared and maintained by you, or by others on your behalf, for the purpose of promoting your business or promoting your goods, products or services, that is accessible over an internet. Should you have any questions, please contact your insurance agent, broker or representative. Form SS 33 35 0611 Page 2 of 2 © 2011, The Hartford IMPORTANT NOTICE TO POLICYHOLDERS REAL ESTATE DEVELOPMENT AND REAL ESTATE MANAGEMENT ACTIVITIES EXCLSUION Thank you for trusting The Hartford with your Business Insurance needs. You are receiving this Notice because the Limitation of Coverage - Real Estate Operations, Form SS 05 01 has been renamed Exclusion - Real Estate Development Activities and Real Estate Management Activities and now excludes these activities as defined below. "Real Estate Development Activities" means the acquisition of, improvement of, or investment in "Real Estate ", and includes without limitation any participation, on your behalf or on behalf of others, in the financing, design, site preparation, construction, renovation or maintenance of, or the extraction of natural resources from, "Real Estate ". "Real Estate Management Activities" means the administration, supervision or management of "Real Estate" including without limitation: a. acting as a real estate manager; b. collecting rents; c. maintaining records and preparation of financial reports and budgets; d. complying with laws or regulations relating to the maintenance of "Real Estate ", including any duties owed to invitees, licensees and trespassers; e. undertaking or arranging for repairs or maintenance, including any indoor or outdoor routine, corrective, preventive or emergency maintenance; and f. involvement in any tenant improvements. This change is effective this renewal and represents a reduction in coverage. If your Spectrum Business Owner's policy includes Umbrella coverage, Form SX 22 06, it has also been updated to exclude "Real Estate Development Activities" and "Real Estate Management Activities ". The update is consistent with the changes described above. Should have any questions, please contact your insurance agent, broker or representative. Form SS 33 65 09 12 Page 1 of 1 © 2012, The Hartford