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Prospectors Property Management - 2016 Agreement for 7289 Rosanna Street
AGREEMENT FOR SERVICES (For contracts of $5,000 or less - CONSULTANT) This AGREEMENT made this 7th day of December, 2015 between: CITY: City of Gilroy, having a principal place of business at 7351 Rosanna Street, Gilroy, California and CONSULTANT: Prospectors Property Management, Inc., having a principal place of business at 17770 Monterey Road, Morgan Hill, CA 95037. ARTICLE 1. TERM OF AGREEMENT This Agreement will become effective on Jan 1", 2016 and will continue in effect through Dec 31", 2016 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. -1- 4$51- 9718- 0697v1 LAM047080M 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 CONSULTANT shall submit invoices for all services rendered. Payment Payment shall be due within thirty (30) days after receipt of invoice describing the work performed during the preceding period. If CITY objects to all or any portion of any invoice, CITY shall notify CONSULTANT of the objection within thirty (30) days from receipt of the invoice, give reasons for the objection, and pay that portion of the invoice not in dispute. It shall not constitute a default or breach of this Agreement for CITY not to pay any invoiced amounts to which it has objected until the objection has been resolved by mutual agreement of the parties. 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. -2- 4851- 9718- 0697v1 LAC104706083 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. Insurance -3- 4851- 9718-0697v1 LAC104706063 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 on a per occurrence basis, 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 or claim, and $2,000,000 aggregate; provided however, Professional Liability Insurance written on a claims made basis must comply with the requirements set forth below. Professional Liability Insurance written on a. claims made basis (including without limitation the initial policy obtained and all subsequent policies purchased as renewals or replacements) must show the retroactive date, and the retroactive date must be before the earlier of the effective date of the contract or the beginning of the contract work. Claims made Professional Liability Insurance must be maintained, and written evidence of insurance must be provided, for at least five (5) years after the completion of the contract work. If claims made coverage is canceled or non - renewed, and not replaced with another claims -made policy form with a retroactive date prior to the earlier of the effective date of the contract or the beginning of the contract work, CONSULTANT must purchase so called "extended reporting" or "tail" coverage for a minimum of five (5) years after completion of work, which must also show a retroactive daze that is before the earlier of the effective date of the contract or the beginning of the contract work. As a condition, precedent to CITY'S obligations under this Agreement, CONSULTANT shall furnish written evidence of such coverage (naming CITY, its officers and employees as additional insureds on the Comprehensive Liability insurance policy referred to in (a) immediately above via a specific endorsement) 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. -4- 4851- 9718- 0697u1 LAC104706083 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. 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 parry; 2. Sale of the business of either parry; 3. Death of either parry. 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 -5- 4851-9718-06970 LAC104706083 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. Termination for Failure to Make Agreed -Upon Payments Should CITY fail to pay CONSULTANT all or any part of the compensation set forth in Article 4 of this Agreement on the date due, then if and only if such nonpayment constitutes a default under this Agreement, CONSULTANT, at the CONSULTANT'S option, may terminate this Agreement if such default is not remedied by CITY within thirty (30) days after demand for such payment is given by CONSULTANT to CITY. 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 parry 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 -6- 4851- 971&0697x1 LAC104706083 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. 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 or provisions of any jurisdiction. The -7- 4851- 9718- 0697v1 LAC104706083 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. Executed at Gilroy, California, on the date and year first above written. CONSULTANT: VA, (Print Name) Address for Notices: ( X 'q 177 70 May rFPE 4tL c►q X63 T Social Security or Taxpayer Identification Number: 33 -10 % Z Lt S-7 CITY: CITY OF GILROY By. (Print Name) Address for Notices: 7351 Rosanna Street Gilroy, CA 95020 Ann: City Administrator Approved as to Form: *-�7- City A orney By: Title: -8- 4851- 9718- 0697v1 LAC\04706083 EXHIBIT "A" I. 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. 5. 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. -9- 4851- 971a-0697vl LAM04706083 B. COMPLETION OF SERVICES 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 has been omited entirely. IV. DIRECT EXPENSES Direct expenses are charges and fees not included in the Scope of Services described above. CITY shall be obligated to pay only for those direct expenses which have been previously approved in writing by CITY. CONSULTANT shall obtain written approval from CITY prior to incurring or billing of direct expenses. Copies of pertinent financial records, including invoices, will be included with the submission of billing(s) for all direct expenses. 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. -10- 4851- 971&0697x1 LACV706083 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. 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 parry 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. -11- 4851- 9718-0697x1 LAC1D4706083 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. -12- 4851- 9718- 0697v1 LAC104706083 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. 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. -13- 4851- 9718 - 06971 LAC104706083 FA IMPORTANT NOTICE TO OUR POLICYHOLDERS THANK YOU FOR RENEWING YOUR POLICY WITH THE HARTFORD. WITH THIS NOTICE WE ARE PROVIDING YOU ONLY WITH THE DECLARATIONS PAGE, WHICH OUTLINES YOUR COVERAGES, AND WITH THOSE POLICY FORMS, NOTICES, AND BROCHURES WHICH ARE DIFFERENT FROM THOSE WHICH WE PROVIDED WITH YOUR PREVIOUS POLICY. YOU SHOULD_ RETAIN ALL OF THESE DOCUMENTS AND THOSE PROVIDED WITH YOUR PREVIOUS POLICY INDEFINITELY SO THAT YOU WILL HAVE A COMPLETE SET OF POLICY FORMS AT ALL TIMES FOR YOUR REFERENCE. IF YOU HAVE QUESTIONS, OR IF AT ANY TIME YOU NEED COPIES OF ANY OF THE FORMS LISTED ON YOUR POLICY, PLEASE CALL YOUR HARTFORD AGENT OR BROKER, OR THE OFFICE OF THE HARTFORD IDENTIFIED ON YOUR POLICY, AS APPROPRIATE. Form G- 3187 -0 Insurance Policy Billing Information Thank you for selecting The Hartford for your business insurance needs. Shortly, you will receive your first bill from us. You are receiving this Notice so you know what to expect as a valued customer of The Hartford. Should you have any questions after reviewing this information, please contact us at 866- 467 -8730, and we will be happy to assist you. o Your total policy premium will appear on your policy's Declarations Page. You will be billed based on the payment plan you selected. o You may pay the "minimum due" as it appears on your insurance bill or pay the policy balance in full. o. An installment service fee is added to each installment. A late fee will also be applied if the "minimum due" is not received by the due date shown on your bill. Service and late payment fees do not apply in all states. • If you selected installment billing, any credit or additional premium due as the result of a change made to your policy, will be spread over the remaining billing installments. Additional premium due as a result of an audit will be billed in full on your next bill date following the completion of the audit. • If you elected Electronic Funds Transfer (EFT), policy changes may result in changes to the amount automatically withdrawn from your bank account. The invoice you receive following a policy change will include future withdrawal amounts. If you need to adjust or stop your next scheduled EFT withdrawal, please contact us at least 3 days prior to the scheduled withdrawal date at the telephone number shown below. • If you selected installment billing and pay the premiums for your first policy term on time, at renewal, your account may qualify for our "Equal Installment' feature. This means that the percentage due for each installment, including the initial renewal installment, will be the same throughout the policy term — helping you better manage cash flow.. Equal installments will continue as long as you pay your premiums on time and no cancellation notices are issued for any policy on your account. If you no longer qualify for Equal Installments, future renewals will be billed based on the payment plan you selected, which includes a higher initial installment amount. • If your policy is eligible for renewal, your bill for the upcoming policy term will be sent to you approximately 30 days prior to your policy's renewal date. If your insurance needs change, please contact us at least 60 days prior to your renewal date so we can properly address any adjustments needed. • One bill convenience -- you have the option of combining all eligible Hartford policies on one single bill allowing you to make one payment for all policies on your account as payments are due. You're In Control In addition to selecting a bill plan option that best meets your budget, you have the flexibility to decide how your payments are made ... • Repetitive EFT: Sign up for Repetitive EFT payments and have payments automatically withdrawn from your bank account. This option saves you money by reducing the amount of the installment service fee. • Pay Online: Register at www .thehartford.com /servicacenter. Online Bill Pay is Quick, Easy and Secure! • Pay by Check: Send a check with your remittance stub in the envelope provided with your bill. • Pay by Phone: Call toll -free 1- 866 - 467 -8730. Should you have any questions about your bill, please call Customer Service toll free number: 1- 866- 467 -8730 - 7AM —7PM CST. We look forward to being of service to you. Form 100722 11th Rev. Printed in U.S.A. Business Owner's Policy Form SS 00 01 0314 Page 1 of 1 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): $ $20.00 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 0312 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 IMPORTANT NOTICE TO POLICYHOLDERS To 'help your insurance keep pace with increasing costs, we have increased your amount of insurance ... giving you better protection in case of either a partial, or total loss to your property. If you feel the new amount is not the proper one, please contact your agent or broker. Form PC -3740 Printed in U.S.A. 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 Policy Number: 59 SBA VK7702 SC SPECTRUM POLICY DECLARATIONS Named Insured and Mailing Address: (No., Street, Town, State, Zip Code) PROSPECTORS PROPERTY MANAGEMENT INC. 17770 MONTEREY ROAD #A MORGAN HILL CA 95037 Policy Period: From 01/25/15 To 01/25/1.6 1 YEAR 12:01 a.m., Standard time at your mailing address shown above. Exceptlon: 12 noon in New Hampshire. Name of Agent/Broker: 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: Countersigned by $1,039 �uB1ar� c� ,�aG�uc�ez> Authorized Representative 11/11/14 Date Form SS 00 02 12 06 Page 001 ( CONTINUED ON NEXT PAGE) Process Date: 11/11/14 Policy Expiration Date: 01/25/16 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 0212 06 Process Date: 11/11/14 NO COVERAGE $ 68,800 NO COVERAGE $ 10,000 $ 5,000 Page 002 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/25/16 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 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 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 DECLARaTIO_N. INCLUDING BUSINESS INCOME AND EXTRA EXPENSE COVERAGE FOR: Form SS 00 02 12 06 Process Date: 11/11/14 $ 15,000 $ 5,000 $ 50,000 30 DAYS Page 003 (CONTINUED ON NEXT PAGE) Policy Expiration Date: 01/2'5/16 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 TEE POLICY IDENTITY RECOVERY COVERAGE FORM SS 41 12 Form SS 00 02 12 06 Process Date:11/11/14 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: 01/25/16 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: 11/11/14 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: 01/25/16 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 0 06 (CONTINUED ON NEXT PAGE) Process Date: 11/11/14 Policy Expiration Date: 01/25/16 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SEA vx7702. Form Numbers of Forms and Endorsements that apply: SS 00 01 03 14 SS 00 05 10 08 SS 00 07 07 05 SS 00 45 12 06 SS 84 01 09 07 SS 01 21 06 14. SS 04 19 04 09 SS 04 22.07 05 SS 04 30 07 05 SS 04 41 04 09 SS 04 42 09 07 SS 04 44 07 05 SS 04 46 09 14 SS 04 47 04 09 SS 04 80 03 00 SS 40 18 07 05 SS 40 25 07 05 SS 40 93 07 05 SS 41 51 10 09 SS 41 62 06 11 SS 41 63 06 11 SS 05 01 09 12 SS 05 47 09 01 SS 50 57 04 05 IH 99 40 04 09 IH 99 41 04 09 SS 38 25 12 07 IH 12 00 11 85 SIGNS AWAY FROM THE INSURED PREMISES IH 12 00 11 85 ADDITIONAL INSURED - MANAGER /LESSOR SS ,00 08 04 05 SS 04 08 09 07 SS 04 39 07 05 SS 04 45 07 05 SS 04 86 03 00 SS 41 12 12 07 IH 10 01 09 8.6 SS 50 19 03 12 SS 83 76 03 12 Form SS 00 02 12 06 Page 007 Process Date: 11/11/14 Policy Expiration Date: 01/25/16 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 59 SBA VK7702 SUPPLEMENTAL DECLARATIONS: A service fee of $ 7.00 is charged for each installment when your premium is paid in installments. The service fee is $ 5.00 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: 11/11/14 Policy Expiration Date: 01/25/16 STRETCH SUMMARY SUMMARY OF COVERAGE LIMITS r� 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 underthis 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 underthe 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 underthis policy. The Limits of Insurance for the following Business Income and Extra Expense Coverages are in addition to any other Limit of Insurance provided underthis policy: Coverage Limlt Business Income Extension for Off - Premises Utility Services $ 25,000 Business Income Extension for Web Sites $ 10,00017 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 COMMON POLICY CONDITIONS Form SS 00 05 10 08 © 2008, The Hartford QUICK REFERENCE - SPECTRUM POLICY DECLARATIONS and COMMON POLICY CONDITIONS L DECLARATIONS Named Insured and Mailing Address Policy Period Description and Business Location Coverages and Limits of Insurance II. COMMON POLICY CONDITIONS Beginning on Page A Cancellation 1 B. Changes 1 C. Concealment, Misrepresentation Or Fraud 2 D. Examination Of Your Books And Records 2 E. Inspections And Surveys 2 F. Insurance Under Two Or More Coverages 2 G. Liberalization . 2 H. Other Insurance - Property Coverage 2 I. Premiums 2 J. Transfer Of Rights Of Recovery Against Others To Us 2 K. Transfer Of Your Rights And Duties Under This Policy 3 L. Premium Audit 3 Form SS 00 0510 08 COMMON POLICY CONDITIONS All coverages of this policy are subject to the following conditions. A Cancellation 1. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation. 2. We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least: a. 5 days before the effective date of cancellation if any one of the following conditions exists at any building that is Covered Property in this policy: (1) The building has been vacant or unoccupied 60 or more consecutive days. This does not apply to: (a) Seasonal unoccupancy; or (b) Buildings in the course of construction, renovation or addition. Buildings with 65% or more of the rental units or floor area vacant or unoccupied are considered unoccupied under this provision. (2) After damage by a Covered Cause of Loss, permanent repairs to the building: . (a) Have not started; and (b) Have not been contracted for, within 30 days of initial payment of loss. (3) The building has: (a) An outstanding order to vacate; (b) An outstanding demolition order, or (c) Been declared unsafe by governmental authority. (4) Fixed and salvageable items have been or are being removed from the building and are not being replaced. This does not apply to such removal that is necessary or incidental to any renovation or remodeling. Form SS 00 05 10 08 (5) Failure to: (a) Furnish necessary heat, water, sewer service or electricity for 30 consecutive days or more, except during a period of seasonal unoccupancy; or (b) Pay property taxes that are owing and have been outstanding for more than one year following the date due, except that this provision will not apply where you are in a bona fide dispute with the taxing authority regarding payment of such taxes. b. 10 days before the effective date of cancellation if we cancel for nonpayment of premium. c. 30 days before the effective date of cancellation if we cancel for any other reason. 3: We will mail or deliver our notice to the first Named Insured's last mailing address known to us. 4. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. 5. If this policy is canceled, we will send the first Named Insured any premium refund due. Such refund will be pro rata. If the first Named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. 6. If notice is mailed, proof of mailing will be sufficient proof of notice. B. Changes This policy contains all the agreements between you and us concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent. This pdgs terms can be amended or waived only by endorsement issued by us and made a part of this policy. © .2008, The Hartford (Includes copyrighted material of Insurance Services Office, Inc. with its permission) Page 1 of 3 COMMON POLICY CONDITIONS C. Concealment, Misrepresentation Or Fraud due from that other insurance, whether you can This policy is void in any case of fraud by you as it collect on it or not. But we will not pay more than relates to this. policy at any time. It is also void if you the applicable Limit of Insurance, or any other insured, at anytime, intentionally conceal I. Premiums or misrepresent a material fact concerning: 1. The first Named Insured shown in the 1. This policy, Declarations: 2. The Covered Property, a. Is responsible for the payment of all 3. Your interest in the Covered Property; or premiums; and 4. A claim underthis policy. b. Will be the payee for any return premiums D. Examination Of Your Books And Records we pay. 2. The premium shown in the Declarations was We may examine and audit your books and computed based on rates in effect at the time records as they relate to the policy at any time the policy was issued. If applicable, on each during the policy period and up to three years renewal, continuation or anniversary of the afterward, effective date of this policy, we will compute E. Inspections And Surveys the premium in accordance with our rates and 1. We have the right but are not obligated to: rules then in effect. a. Make inspections and surveys at anytime; 3. With our consent, you may continue this policy in force by paying a continuation premium for b. Give you reports on the conditions we find; each successive one -year period. The and premium must be: c. Recommend changes. a. Paid to us prior to the anniversary date; and 2. Any inspections, surveys, reports or b. Determined in accordance with Paragraph recommendations will relate only to insurability 2. above. and the premiums to be charged. We do not you Our forms then in effect will apply. If u do make safety inspections. We do not not pay the continuation premium, policy undertake to perform the duty of any person or organization to provide for the health or safety will expire the first anniversary date that we of any person. We do not represent or warrant have not received the premium. that conditions: 4. Changes in exposures or changes in your a. Are safe or healthful; or business operation, acquisition or use of locations` that are not shown in the Declarations b. Comply with laws, regulations, codes or may occur during the policy period. If so, we may standards. require an additional premium. That premium will 3. This condition applies not only to us, but also be determined in accordance with our rates and to any rating, advisory, rate service or similar rules then In effect. organization which makes insurance J. Transfer Of Rights Of Recovery Against Others inspections, surveys, reports or To Us recommendations on our behalf. Applicable to Property Coverage: F. Insurance Under Two Or More Coverages If any person or organization to or for whom we If two or more of this policy's coverages apply to make payment under this policy has rights to the same loss or damage, we will not pay more recover damages from another, those rights are than the actual amount of the loss or damage. transferred to us to the extent of our payment. G. Liberalization That person or organization must do everything If we adopt any revision that would broaden the necessary to secure our rights and must do coverage under this policy without additional nothing after loss to impair them, But you may premium within 45 days prior to, or at any time waive your rights against another party in writing: during, the policy period, the broadened coverage 1. Prior to a loss to your Covered Property, or will immediately apply to this policy. 2. After a loss to your Covered Property only if, at H. Other Insurance - Property Coverage time of loss, that party is one of the following: If there is other insurance covering the same loss or damage, we will pay only for the amount of covered loss or damage in excess of the amount Page 2 of 3 Form SS 00 05 10 08 a. Someone insured by this insurance; b. A business firm: (1) Owned or controlled by you; or (2) That owns or controls you; or c. Yourtenant. You may also accept the usual bills of lading or shipping receipts limiting the liability of carriers. This will not restrict your insurance. K. Transfer Of Your Rights And Duties Under This Policy Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual Named Insured. If you die, your rights and duties will be transferred to your legal representative but only while acting within the scope of duties as your legal representative. Until your legal representative is COMMON POLICY CONDITIONS appointed, anyone having proper temporary custody of your property will have your rights and duties but only with respect to that property. L. Premium Audit a. We will compute all premiums for this policy in accordance with our rules and rates. b. The premium amount shown in the Declarations is a deposit premium only. At the close of each audit period we will compute the earned premium for that period. Any additional premium found to be due as a result of the audit are due and payable on notice to the first Named Insured. If the deposit premium paid for the policy term is greater than the earned premium, we will return the excess to the first Named Insured. c. The first Named Insured must maintain all records related to the coverage provided by this policy and necessary- to finalize the premium audit, and send us copies of the same upon our request. Our President and Secretary have signed this policy. Where required by law, the. Declarations page has also been countersigned by our duly authorized representative. Terence Shields, Secretary d4,-4�' ZX�A, /47� - Andr! A. Napoli, President Form SS 00 05 10 08 Page 3 of 3 R THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CALIFORNIA CHANGES This endorsement modifies insurance provided under the following: COMMON POLICY CONDITIONS SPECIAL PROPERTY COVERAGE FORM. STANDARD PROPERTY COVERAGE FORM BUSINESS LIABILITY COVERAGE FORM EMPLOYMENT PRACTICES LIABILITY COVERAGE FORM A. Paragraphs 2. and 3. of the Cancellation Common (2) Discovery of fraud or material Policy Condition are replaced by the following: misrepresentation by: 2. All Policies in Effect for 60 Days Or Less: (a) Any insured or his or her If this policy has been in effect for 60 days or representative in obtaining this less, and is not a renewal of a policy we have insurance; or previously issued, we may cancel this policy by (b) You or your representative in mailing or delivering to the first Named Insured pursuing a claim under this policy. at the mailing address shown in the policy and to (3) A judgment by a court or an the producer of record, advance written notice of administrative tribunal that you have cancellation, stating the reason for cancellation, violated a California or Federal law, at least: having as one of its necessary elements a. 10 days before the effective date of an act which materially increases any of cancellation if we cancel for: the risks insured against. (1) Nonpayment of premium; or (4) Discovery of willful or grossly negligent (2) Discovery of fraud or material acts or omissions, or of any violations of misrepresentation by: state laws or regulations establishing safety .standards, by you or your (a) Any insured or his or her representative, which materially representative in obtaining this increase any of the risks insured insurance; or against. (b) You or your representative in (5) Failure by you or your representative to pursuing a claim under this policy. implement reasonable loss control b. 30 days before the effective date of requirements, agreed to by you as a cancellation if we cancel for any other reason. condition of policy issuance, or which 3. All Policies in Effect For More Than 60 Days were conditions precedent to our use of a particular rate or rating plan, if that a. If this policy has been in effect for more than p cY failure materially increases any of the 60 days, or is a renewal of a policy we risks insured against. issued, we may cancel this policy only upon the occurrence, after the effective date of {6} A determination by the Commissioner of the policy, of one or more of the fallowing, or Insurance that the: as permitted under applicable California law: (a) Loss of, or changes in, our (1) Nonpayment of premium, including reinsurance covering all or part of payment due on a prior policy we issued the risk would threaten our financial and due during the current policy term integrity or solvency; or covering the same risks. (b) Continuation of the policy coverage would: Form SS 0121 0614 Page 1 of 4 © 2014, The Hartford i. Place us in violation of California law or the laws of the state where we are domiciled; or ii. Threaten our solvency. (7) A change by you or your representative in the activities or property of the commercial or industrial enterprise, which results in a materially added, increased or changed risk, unless the added, increased or changed risk is included in the policy. b. We will mail or deliver advance written notice of cancellation, stating the reason for cancellation, to the first Named Insured, at the mailing address shown in the policy, and to the producer of record, at least: (1) 10 days before the effective date of cancellation if we cancel for nonpayment of premium or discovery of fraud, or (2) 30 days before the effective date of cancellation if we cancel for any other reason listed in paragraph 3.a, B. The following provisions is added to the Cancellation Common Policy Condition: 7. Residential Property This provision applies to coverage on real property which is used predominantly for residential purposes and consisting of not more than four dwelling units, and to coverage on tenants' household personal property in a residential unit, if such coverage is written under this policy: a. If such coverage has been in effect for 60 days or less, and is not a renewal of coverage we previously issued, we may cancel this coverage for any reason, except as provided in b. and c. below.. b. We may not cancel solely because the first Named Insured has: (1) Accepted an offer of earthquake coverage; or (2) Cancelled or did not renew a policy issued by the California Earthquake Authority (CEA) that included and earthquake policy premium surcharge. However, we shall cancel this policy if the first Named Insured has accepted a new or renewal policy issued by the CEA that includes an earthquake policy premium surcharge but fails to pay the earthquake policy premium surcharge authorized by the CEA. c. We may not cancel such coverage solely because corrosive soil conditions exist on the premises. This restriction (c.) applies only if coverage under the Special Property Coverage Form, which excludes loss or damage caused by or resulting from corrosive, soil conditions. C. The following is added and supersedes any provisions to the contrary: NONRENEWAL 1. Subject to the provisions of paragraphs C,2. and C.3. below, if we elect not to renew this policy, we will mail or deliver written notice stating the reason for nonrenewal to the first Named Insured shown in the Declarations and to the producer of record, at least 60 days but not more than 120 days, before the expiration or anniversary date. We will mail or deliver our notice to the first Named Insured, and to the producer of record, at the mailing address shown in the policy. 2. Residential Property This provision applies to coverage on real property used predominantly for residential purposes and consisting of not more than four dwelling units, and to coverage on tenants' household property contained in a residential unit, if such coverage is written underthis policy. a. We may elect not to renew such coverage for any reason, except as provided in b., c. and d. below: b. We will not refuse to renew such coverage solely because the first Named Insured has accepted an offer of earthquake coverage. However, the. following applies only to insurers who are associated participating insurers as established by Cal. Ins. Code Section 10089.16. We may elect not to renew such coverage after the first Named Insured has accepted an offer of earthquake coverage, if one or more of the following reasons applies: (1 ) The nonrenewal is based on sound underwriting principles that relate to the coverages provided by this policy and that are consistent with the approved rating plan and related documents filed with the Department of Insurance as required by existing law; Page 2 of 4 Form SS 0121 0614 (2) The Commissioner of Insurance finds that the exposure to potential losses will threaten our solvency or place us in a hazardous condition. A hazardous condition in which we make claims payments for losses resulting from an earthquake that occurred within the preceding two years and that required a reduction in policyholder surplus of at least 25% for payment of those claims; or (3) We have: (a) Lost or experienced a substantial reduction in the availability or scope of reinsurance coverage; or (b) Experienced a substantial increase in the premium charged for reinsurance coverage of our residential property insurance policies; and the Commissioner has approved a plan for the nonrenewals that is fair and equitable, and that is responsive to the changes in our reinsurance position. (c) We will not refuse to renew such coverage solely because the first Named Insured has cancelled or did not renew a policy, issued by the California Earthquake Authority that included an earthquake policy premium surcharge. (d) We will not refuse to renew such coverage solely because corrosive soil conditions exist on the premises. This restriction (d) applies only if coverage,is subject to the Special Property Coverage Form, which excludes loss or damage caused by or resulting from corrosive soil conditions. 3. 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 C.1. c. If you have obtained replacement coverage, or if the first Named Insured has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage. d. If the policy is fora period of no more than 60 days and you are notified at the time of issuance that it will not be renewed. e. If the first Named Insured requests a change in the terms or conditions or risks covered by the policy within 60 days of the end of the policy period. f. If we have made a written offer to the first Named Insured, in accordance with the time frames shown in paragraph C.1., to renew the policy under changed terms or conditions or at an increased premium rate, when the increase exceeds 25 %. If there is an appraisal, we will still retain our right to deny the claim. D. The Concealment, Misrepresentation Or Fraud Condition is replaced by the following with respect to loss of damage caused by fire: We do not provide coverage to the insured who, whether before or after a loss, has committed fraud or intentionally concealed or misrepresented any material fact or circumstance concerning: 1. This Coverage Part; 2. The Covered Property, 3. That insured's interest in the Covered Property, or 4. A claim under this Coverage Part or Coverage Form. E. The Concealment, Misrepresentation Or Fraud Condition is replaced by the following with respect to loss of damage caused by a Covered Cause of Loss other than fire: This Coverage Part is void if any insured, whether before or after a loss, has committed fraud or intentionally concealed or misrepresented any material fact or circumstance conceming: 1. This Coverage Part; 2. The Covered Property; 3. That insured's interest in the Covered Property, or 4. A claim under this Coverage Part or Coverage Form. F. The Other Insurance — Property Coverage Condition is replaced by the following: If there is other insurance covering the same loss or damage, we will pay our share of the covered loss or damage. Our share is the proportion that the applicable limit of insurance bears to the limits of insurance of all insurance covering on same basis. Form SS 0121 0614 Page 3 of 4 G. Anywhere it may appear under this policy, the term relates to a state of emergency as described "spouse" includes a registered domestic partner in Section 8558 of the Government Code; under California Law. unless we extend the time period for good H. The Appraisal Property Loss Condition of the cause. Standard and Special Property Form is replaced The foregoing provisions do not constitute a by the following: waiver of our right to deny the claim for any valid If we and you disagree on the value of the property reason or to restrict payment in cases of suspected fraud. or the amount of loss, either may make written request for an appraisal of the loss. If the request is 2• Actual cash value is determined as follows: accepted, each party will select a competent and a. In the event of a total loss to a building or impartial appraiser. Each party shall notify the other structure, actual cash value is calculated as of the appraiser selected within 20 days of the the Limit of Insurance applicable to that request. The two appraisers will select an umpire. If building or structure or the fair market value they cannot agree within 15 days, either may of the building or structure, which ever is request that selection be made by a judge of a court less. having jurisdiction. The appraisers will state b. In the event of a partial loss to a building or separately the value of the property and amount of structure, actual cash value is calculated as loss. If they fail to agree, they will submit their shown below, which ever is less: differences to the umpire. A decision agreed to by any two will be binding. Each party will: 1 The amount it would cost to repair, () P a. Pay its chosen appraiser; and rebuild or replace the property less a fair b. Bear the other expenses of the appraisal and and reasonable deduction for physical depreciation of the components of the umpire equally. building or structure that are normally If there is an appraisal, we will still retain our right to subject to repair or replacement during deny the claim. its useful life. Physical depreciation is I. With respect to an "Open Policy", the Loss based upon the condition of the property Payment Condition of the Standard and Special at the time of the loss; Property Form is amended by the following: (2) The limit of Insurance applicable to the 1. Paragraph 5.d.(1).(b). of the Loss Payment property, condition is deleted and replaced by: c. In the event of a partial or total loss to We will not pay on a replacement cost basis for Covered Property other than a building or any loss or damage until the lost or damaged structure, actual cash value is calculated as property is actually repaired or replaced, and the lesser of the following: then only subject to deduction for depreciation. (1) The amount it would cost to repair or Prior to such repair or replacement, and in replace the property less a fair and accordance with the terms applicable Loss reasonable deduction for physical Payment conditions in this policy, we will pay the depreciation, based on the condition of actual cash value of the lost or damaged the property at the time of loss; or property as described in this endorsement. If the (2) The Limit of Insurance applicable to the actual cash value does not exhaust the property. applicable Limit of Insurance, we will then pay the difference 'between the actual cash value 3. An "Open Policy" is a policy under which the and the replacement cost, provided that the value of Covered Property is not fixed at policy repair or replacement is completed: inception, but is determined at the time of loss in a. Within 12 months after our payment of the accordance with policy provisions on valuation. actual cash value; or The term "open policy" does not apply to b. Within 24 months after our payment of the Covered Property that is subject to an Agreed Value clause or similar clause that establishes actual cash value if the loss or damage an agreed value prior to loss, unless such clause has expired. Page 4 of 4 Form SS 0121 0614 FBI THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. TEMPERATURE CHANCE This endorsement modifies insurance provided under the following: STANDARD PROPERTY COVERAGE FORM SPECIAL PROPERTY COVERAGE FORM This coverage applies only when it is indicated in the Declarations. The provisions of this policy apply to the coverage stated in this endorsement, except as indicated below. A. We will pay for direct physical loss of or physical damage to "perishable stock" at the "scheduled premises" caused by or resulting from: 1. A change in temperature or humidity resulting from: (a) Mechanical breakdown or failure of: (1) Stationary heating plants; or (2) Refrigerating, cooling or humidity control apparatus or equipment; But only while such plants, equipment or apparatus are at the "scheduled premises ". (b) Complete or partial failure of electric power, either on or away from your "scheduled premises ". Such failure of power must be due to conditions beyond your control; or 2. Contamination by a refrigerant. B. SELLING PRICE We will determine the value of finished "perishable stock" in the event of direct physical loss or physical damage at the selling price, as if no physical loss or physical damage had occurred less discounts and expenses you otherwise would have had. C. We will not pay for direct physical loss of or physical damage to "perishable stock" located 1. On buildings; 2. In the open; or 3. In vehicles, other than trailers used for storage located within 1000 feet of the "scheduled premises'. D. EXCLUSIONS 1. The following exclusions under SECTION B - EXCLUSIONS are deleted: (a) Ordinance or Law; . (b) Power Failure; and (c) Mechanical Breakdown in the Standard Property Coverage Form. 2. The following exclusions are added: We will not pay for direct physical loss . or physical damage caused by or resulting from: (a) The disconnecting of any of the following systems from the source of power: (1) Refrigerating; (2) Cooling; or (3) Humidity control. (b) The loss of electrical power caused by the shutting off of any switch or other device used to control the flow of electric power or current. (c) The inability of an electrical utility company, your stationary heating plant or any other power source to provide sufficient heat or power due to: (1) Lack of fuel; (2) Lack of capacity to make enough heat or power; or (3) Order of the government. (d) Breaking of any glass that is a permanent part of a refrigerating, cooling or humidity control unit. E. DEDUCTIBLE We will not pay for loss in anyone occurrence unless the amount of loss exceeds the deductible stated in paragraph D.5. of the Standard Property Coverage Form or D.5. of the Special Property Coverage Form., unless a different deductible is stated in the Form SS 04 46 09 14 Page 1 of 2 .@ 2014, The Hartford Declarations for Temperature Change. We will then pay the amount of loss in excess of the deductible, up to the Limit of Insurance. F. LIMIT OF INSURANCE The most we will pay for direct physical loss or physical damage in any one occurrence is the Limit of Insurance for Temperature Change shown in the Declarations. G. ADDITIONAL CONDITIONS 1. We will pay for direct physical loss or physical damage under this Optional Coverage only when: (a) Such physical loss or physical damage is not covered elsewhere in this policy or any other policy that insures the "perishable stock" at the "scheduled premises "; and (b) This Temperature Change coverage is .shown as a specific item of insurance in the Declarations. 2. In the event of physical loss or physical damage, none of the other coverages under this policy or any other policy will share in its payment unless the provisions of the policy are similar to the provisions of this Optional Coverage. 3. We will not pay more than the Limit of Insurance shown in the Declarations for the Temperature Change. H. ADDITIONAL DEFINITIONS For the purpose of this insurance: 1. "Mechanical breakdown" means: (a) Breaking or separation of any mechanical part(s) other than gas pipes or lines; or (b) Burning out of any electrical motor servicing such unit; and requiring replacement of the damaged parts to become functional. But "mechanical breakdown" does not mean faulty operation or failure of equipment which results in temperature change but does not require replacement of broken parts. We will not pay for direct physical loss or physical damage to "perishable stock" caused by such faulty operation or failure of equipment. 2. "Perishable stock" means personal property: (a) Maintained under controlled conditions for its preservation; and (b) Susceptible to direct physical loss or physical damage if the controlled conditions change. Page 2 of 2 Form SS 04 46 09 14 POLICY NUMBER: 59 SBA VK7702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. SIGNS AWAY FROM THE INSURED PREMISES Form IH 12 00 11 85 T SEQ. NO. 001 Printed in U.S.A. Page 001 Process Date: 11/11/14 Expiration Date: 01/25/16 OEM 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: 11/11/14 Expiration Date: 01/25/16 �1. Named Insured: PROSPECTORS PROPERTY MANAGEMENT Policy Number: 59 SBA VK7702 Effective Date: 01/25/15 Expiration Date: 01/25/15 Company Name: SENTINEL INSURANCE COMPANY, LIMITED 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 11-199 4104 09 Page 1 of 1