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Special District Financing and Administration; 2019-11-26;
MASTER AGREEMENT FOR CONSUL TING AND ADMINISTRATION SERVICES FOR COMMUNITY FACILITIES DISTRICT NO.1 (SPECIAL DISTRICT FINANCING & ADMINISTRATION) ) THIS AGREEMENT is made and entered into as of the 7.JoWY day of j\ ;n\Jv,,y,.\t)&J"".' , 20.,\9:..., by and between the CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as "City", and SPECIAL DISTRICT FINANCING & ADMINISTRATION (SDF&A), a limited liability company, hereinafter referred to as "Contractor." RECITALS A. City requires the professional services of a municipal financial consulting and administration contractor that is experienced in the annual administration of the City's Community Facilities District No. 1, hereinafter "CFO No. 1." B. The professional services are required on a non-exclusive, project-by-project basis. C. Contractor has the necessary experience in providing professional services and advice related to municipal financing of special financing districts including community facilities districts. D. Contractor has submitted a proposal to City and has affirmed its willingness and ability to perform such work. NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Contractor agree as follows: 1. SCOPE OF WORK City retains Contractor to perform, and Contractor agrees to render, those services (the "Services") that are defined in attached Exhibit "A", which is incorporated by this reference in accordance with this Agreement's terms and conditions. Contractor's obligations with respect to any project granted to Contractor under this Agreement will be as specified in the Task Description for the project (see paragraph 5 below). 2. STANDARD OF PERFORMANCE While performing the Services, Contractor will exercise the reasonable professional care and skill customarily exercised by reputable members of Contractor's profession practicing in the Metropolitan Southern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise. 3. TERM The term of this Agreement will be effective from the date first above written to the 31st day of December, 2023. The City Manager may amend the Agreement to extend it for two (2) additional one (1) year periods or parts thereof. Extensions will be based upon a satisfactory review of Contractor's performance, City needs, and appropriation of funds by the City Council. The parties will prepare a written amendment indicating the effective date and length of the extended Agreement. 4. TIME IS OF THE ESSENCE Time is of the essence for each and every provision of this Agreement. City Attorney Approved Version 6/12/18 5. COMPENSATION The cumulative total for all projects allowed pursuant to this Agreement will not exceed sixty-frve thousand dollars ($65,000) per Agreement year. If the City elects to extend the Agreement, the amount shall not exceed sixty-five thousand dollars ($65,000) per Agreement year. Fees will be paid on a project-by-project basis and will be based on Contractor's Schedule of Rates specified in Exhibit "A". Prior to initiation of any project work by Contractor, City shall prepare a Project Task Description and Fee Allotment (the ''Task Description") which, upon signature by Contractor and for City, the City Manager or Director, will be considered a part of this Agreement. The Task Description will include a detailed scope of services for the particular project being considered and a statement of Contractor's fee to complete the project in accordance with the specified scope of services. The Task Description will also include a description of the method of payment and will be based upon an hourly rate, percentage of project complete, completion of specific project tasks or a combination thereof. 6. STATUS OF CONTRACTOR Contractor will perform the Services in Contractor's own way as an independent contractor and in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be under control of City only as to the result to be accomplished, but will consult with City as necessary. The persons used by Contractor to provide services under this Agreement will not be considered employees of City for any purposes. The payment made to Contractor pursuant to the Agreement will be the full and complete compensation to which Contractor is entitled. City will not make any federal or state tax withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be required to pay any workers' compensation insurance or unemployment contributions on behalf of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within thirty (30) days for any tax, retirement contribution, social security, overtime payment, unemployment payment or workers' compensation payment which City may be required to make on behalf of Contractor or any agent, employee, or subcontractor of Contractor for work done under this Agreement. At the City's election, City may deduct the indemnification amount from any balance owing to Contractor. 7. SUBCONTRACTING Contractor will not subcontract any portion of the Services without prior written approval of City. If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the acts and omissions of Contractor's subcontractor and of the persons either directly or indirectly employed by the subcontractor, as Contractor is for the acts and omissions of persons directly employed by Contractor. Nothing contained in this Agreement will create any contractual relationship between any subcontractor of Contractor and City. Contractor will be responsible for payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of a subcontractor by the terms of this Agreement applicable to Contractor's work unless specifically noted to the contrary in the subcontract and approved in writing by City. 8. OTHER CONTRACTORS The City reserves the right to employ other Contractors in connection with the Services. 9. INDEMNIFICATION Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees and volunteers from and against all claims, damages, losses and expenses including attorneys fees arising out of the performance of the work described herein caused by any willful misconduct or negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable. 2 City Attorney Approved Version 6/12/18 The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or makes to or on behalf of an injured employee under the City's self-administered workers' compensation is included as a loss, expense or cost for the purposes of this section, and that this section will survive the expiration or early termination of this Agreement. 10. INSURANCE Contractor will obtain and maintain for the duration of the Agreement and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with performance of the services by Contractor or Contractor's agents, representatives, employees or subcontractors. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rating of not less than "A-:VII"; OR with a surplus line insurer on the State of California's List of Approved Surplus Line Insurers (LASLI) with a rating in the latest Best's Key Rating Guide of at least "A:X"; OR an alien non-admitted insurer listed by the National Association of Insurance Commissioners (NAIC) latest quarterly listings report. 10.1 Coverages and Limits. Contractor will maintain the types of coverages and minimum limits indicated below, unless Risk Manager or City Manager approves a lower amount. These minimum amounts of coverage will not constitute any limitations or cap on Contractor's indemnification obligations under this Agreement. City, its officers, agents and employees make no representation that the limits of the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to protect Contractor. If Contractor believes that any required insurance coverage is inadequate, Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at Contractor's sole expense. The full limits available to the named insured shall also be available and applicable to the City as an additional insured. 10.1.1 Commercial General Liability (CGLl Insurance. Insurance written on an "occurrence" basis, including personal & advertising injury, with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 10.1.2 Automobile Liability. (if the use of an automobile is involved for Contractor's work for City). $2,000,000 combined single-limit per accident for bodily injury and property damage. 10.1.3 Workers' Compensation and Employer's Liability. Workers' Compensation limits as required by the California Labor Code. Workers' Compensation will not be required if Contractor has no employees and provides, to City's satisfaction, a declaration stating this. 10.1.4 Professional Liabjlity. Errors and omissions liability appropriate to Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a period of five years following the date of completion of the work. 10.2. Additional provisions. Contractor will ensure that the policies of insurance required under this Agreement contain, or are endorsed to contain, the following provisions: 10.2.1 The City will be named as an additional insured on Commercial General Liability which shall provide primary coverage to the City. 10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability, which will be written as claims-made coverage. 3 City Attorney Approved Version 6/12/18 10.2.3 This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without thirty (30) days prior written notice to City sent by certified mail pursuant to the Notice provisions of this Agreement. 10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this Agreement, Contractor will furnish certificates of insurance and endorsements to City. 10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance coverages, then City will have the option to declare Contractor in breach, or may purchase replacement insurance or pay the premiums that are due on existing policies in order to maintain the required coverages. Contractor is responsible for any payments made by City to obtain or maintain insurance and City may collect these payments from Contractor or deduct the amount paid from any sums due Contractor under this Agreement. 10.5 Submission of Insurance Policies. City reserves the right to require, at anytime, complete and certified copies of any or all required insurance policies and endorsements.· 11. BUSINESS LICENSE Contractor will obtain and maintain a City of Carlsbad Business License for the term of the Agreement, as may be amended from time-to-time. 12. ACCOUNTING RECORDS Contractor will maintain complete and accurate records with respect to costs incurred under this Agreement. All records will be clearly identifiable. Contractor will allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of records and any other documents created pursuant to this Agreement. Contractor will allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 13. OWNERSHIP OF DOCUMENTS All work product produced by Contractor or its agents, employees, and subcontractors pursuant to this Agreement is the property of City. In the event this Agreement is terminated, all work product produced by Contractor or its agents, employees and subcontractors pursuant to this Agreement will be delivered at once to City. Contractor will have the right to make one (1) copy of the work product for Contractor's records. 14. COPYRIGHTS Contractor agrees that all copyrights that arise from the services will be vested in City and Contractor relinquishes all claims to the copyrights in favor of City. · 15. NOTICES The name of the persons who are authorized to give written notice or to receive written notice on behalf of City and on behalf of Contractor under this Agreement are: For City: Name Title Dept Ryan Green Assistant Finance Director Finance CITY OF CARLSBAD For Contractor: Name Barbara Hale-Carter Title -'P'-'r;..:.;inc.;..:c:;.;.iip;;.;;a;;.;..1 _ __,.-,--------- Address 437 W. Grand Avenue ESCONDIDO, CA 92025 4 City Attorney Approved Version 6/12/18 Address 1635 Faraday Avenue Carlsbad, CA 92008 Phone 760-602-2414 Phone Email 760-233-2630 barbc@sdfa.com Each party will notify the other immediately of any changes of address that would require any notice or delivery to be directed to another address. 16. CONFLICT OF INTEREST Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report investments or interests in all categories. YesO NoO 17. GENERAL COMPLIANCE WITH LAWS Contractor will keep fully informed of federal, state and local laws and ordinances and regulations which in any manner affect those employed by Contractor, or in any way affect the performance of the Services by Contractor. Contractor will at all times observe and comply with these laws, ordinances, and regulations and will be responsible for the compliance of Contractor's services with all applicable laws, ordinances and regulations. Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986 and will comply with those requirements, including, but not limited to, verifying the eligibility for employment of all agents, employees, subcontractors and consultants whose services are required by this Agreement. 18. DISCRIMINATION AND HARASSMENT PROHIBITED Contractor will comply with all applicable local, state and federal laws and regulations prohibiting discrimination and harassment. 19. DISPUTE RESOLUTION If a dispute should arise regarding the performance of the Services the following procedure will be used to resolve any questions of fact or interpretation not otherwise settled by agreement between the parties. Representatives of Contractor or City will reduce such questions, and their respective views, to writing. A copy of such documented dispute will be forwarded to both parties involved along with recommended methods of resolution, which would be of benefit to both parties. The representative receiving the letter will reply to the letter along with a recommended method of resolution within ten (10) business days. If the resolution thus obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be forwarded to the City Manager. The City Manager will consider the facts and solutions recommended by each party and may then opt to direct a solution to the problem. In such cases, the action of the City Manager will be binding upon the parties involved, although nothing in this procedure will prohibit the parties from seeking remedies available to them at law. 20. TERMINATION In the event of the Contractor's failure to prosecute, deliver, or perform the Services, City may terminate this Agreement for nonperformance by notifying Contractor by certified mail of the termination. If City decides to abandon or indefinitely postpone the work or services contemplated by this Agreement, City may terminate this Agreement upon written notice to Contractor. Upon notification of termination, Contractor has five (5) business days to deliver any documents owned by City and all work in progress to City at the address contained in this Agreement. City will make a determination of fact based upon the work product delivered to City and of the percentage of 5 City Attorney Approved Version 6/12/18 x work that Contractor has performed which is usable and of worth to City in having the Agreement completed. Based upon that finding City will determine the final payment of the Agreement. Either party upon tendering thirty (30) days written notice to the other party may terminate this Agreement. In this event and upon request of City, Contractor will assemble the work product and put it in order for proper filing and closing and deliver it to City. Contractor will be paid for work performed to the termination date; however, the total will not exceed the lump sum fee payable under this Agreement. City will make the final determination as to the portions of tasks completed and the compensation to be made. 21. COVENANTS AGAINST CONTINGENT FEES Contractor warrants that Contractor has not employed or retained any company or person, other than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that Contractor has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, City will have the right to annul this Agreement without liability, or, in its discretion, to deduct from the Agreement price or consideration, or otherwise recover, the full amount of the fee, commission, percentage, brokerage fees, gift, or contingent fee. 22. CLAIMS AND LAWSUITS By signing this Agreement, Contractor agrees that any Agreement claim submitted to City must be asserted as part of the Agreement process as set forth in this Agreement and not in anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false claim is submitted to City, it may be considered fraud and Contractor may be subject to criminal prosecution. Contractor acknowledges that California Government Code sections 12650 et seq., the False Claims Act applies to this Agreement and, provides for civil penalties where a person knowingly submits a false claim to a public entity. These provisions include false claims made with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of information. If City seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a false claim may subject Contractor to an administrative debarment proceeding as the result of which Contractor may be prevented to act as a Contractor on any public work or improvement for a period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction is grounds for City to terminate this Agreement. 23. JURISDICTIONS AND VENUE Any action at law or in equity brought by either of the parties for the purpose of enforcing a right or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the County of San Diego, State of California, and the parties waive all provisions of law providing for a change of venue in these proceedings to any other county. 24. SUCCESSORS AND ASSIGNS It is mutually understood and agreed that this Agreement will be binding upon City and Contractor and their respective successors. Neither this Agreement nor any part of it nor any monies due or to become due under it may be assigned by Contractor without the prior consent of City, which shall not be unreasonably withheld. 25. ENTIRE AGREEMENT This Agreement, together with any other written document referred to or contemplated by it, along with the purchase order for this Agreement and its provisions, embody the entire Agreement and understanding between the parties relating to the subject matter of it. In case of conflict, the terms of the Agreement supersede the purchase order. Neither this Agreement nor any of its provisions may be amended, modified, waived or discharged except in a writing signed by both parties. 6 City Attorney Approved Version 6/12/18 26. AUTHORITY The individuals executing this Agreement and the instruments referenced in it on behalf of Contractor each represent and warrant that they have the legal power. right and actual authority to bind Contractor to the terms and conditions of this A ment. Executed by Contractor this _____ day of __________ , 20 __ . CONTRACTOR Ba.i,-bar:a. -~te...~ (print name/title) By: .-(sign here) -Je.A+· ·lli,ri;} ll --:Pr~J\i,'1 £(Iv t (print name/title( CARLSBAD, a municipal o the State of California BARBARA ENGLESON City Clerk Proper notarial acknowledgment of execution by Contractor must be attached. If a corporation, Agreement must be signed by one corporate officer from each of the following two groups: Group A Chairman, President, or Vice-President Group B Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. CITY OF CARLSBAD, a municipal corporation of the State of California APPROVED AS TO FORM: CELIA A. R E City Attorney BY:_-,--..,....;;..._,.-1::::-:::,...a..,.-+------ 7 City Attorney Approved Version 6/12/18 ACKNOWLEDGMENT jAnotary public or.other officer completing ihis I certificate verifies only the identity of the individual , who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validit of that document. State of California County of £0.Y\ ()\~ before me, \J®~ ]:())'}{,$, NO,\(~ RJb\\C. (insert name and title of theoffi r) I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signatu {Seal) ACKNOWLEDGMENT A nofary public or other officer completingthis·-·-· · 1 certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that docum_ent. 1 State of California county of SAN DIEGO On I\ · 1 ( • 2019 before me, WESLEY KNOBLOCK -----------(insert name and title of the officer) personally appeared ~-f ~ \l,{_. who proved to me on the basis of satisfactory evidence to be the perso~whose nam~/j:l-f(3/ subscribed to the within instrument and acknowledged to me thattfe)'~u,,ey-executed the same in ~l}erl!heir authorized capacity(i~and that by~/h~r signatur~n the instrument the person~r the entity upon behalf of which the persor;ifstacted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) EXHIBIT "A" SCOPE OF SERVICES The following overviews the proposed Scope of Work for the Administration of the City of Carlsbad Community Facilities District No. 1 and summarizes the steps required to perform such services. This Scope of Work also provides for the assignment of other Special Research/Consulting Project Services by letter agreement on an hourly basis. TASK 1: 1. ESTIMATE FUTURE GROWTH FOR CASH FORECASTING PURPOSES • Obtain sample parcel data on Local Facility Management Zones ("LFMZn) and building permit issuance data from Management Information System Department ("MIS Department'). • Update sample LFMZ data on vacant or under-developed parcels by adding status of development, projected development by type (residential, commercial, industrial), and the calculation of projected equivalent dwelling units (EDUs) in accordance with the requirements of the GIS Department. • Update CFD database with new Assessor parcel numbers, transferring and checking General Plan land use and net assessable acreage data, adding permit data by Assessor parcel. This requires interaction with the Planning and Building Departments. • Provide sample data to the GIS Department for review and preparation of a draft visual. • Obtain comments from the GIS Department on discrepancies. • Provide historical growth projection to Planning Department and schedule appointments with assigned planners, Redevelopment Agency staff and the Building Department staff. • Provide data to the GIS Department as LFMZs are completed for preparation of draft visuals. • Meet with Planning Department staff member tracking dwelling unit bank. Update unit bank figures shown in growth projections. • Revisit with City planners as needed. • Meet with Finance Director and/or City Engineer as needed to review data. SOFA foresees the need to discuss redevelopment prior to the completion of the project. • Prepare draft report for staff review which includes: detailed data, summary data (growth projection table) and draft visual sample as prepared by the GIS Department. • Revise draft as required. • Attend meeting for review of growth projections. • Update growth projections and detailed data as required. • Provide final data to GIS Department for completion of visual products. • Provide Finance Department with final report to include growth projections by LFMZ and in summary for use in the City's CIP Program. This will be completed by the date required in the CIP Schedule prepared by the Finance Department. • Request building permit data from the MIS Department through March 1. • Request Assessor Parcel Data from the County of San Diego. • Update CFO database with new Assessor parcel numbers, transferring and checking General Plan land use and net assessable acreage data, adding permit data by Assessor parcel. This requires interaction with the Planning and Building 8 City Attomey Approved Version 6/12/18 Departments. Once this step is completed, a draft revenue stream for the cash flow can be prepared. TASK2: 1. CASH FLOW ANALYSIS SDF A will prepare a cash flow for both the residential and non-residential elements as required in the Rate and Method of Apportionment for the CFO. This will require the receipt of year-end balances, year-to-date balances, a projection of funds to be contributed to the CFO from properties outside the CFO, CFO project schedule, CFD project expenditures, and delinquency data. Meeting(s) will be held with the Finance Department staff to review such cash flows. Various options to the tax rates can be entered and evaluated. Once the tax rate decision is final, a draft agenda bill and annual resolution is provided for review and use. Attendance at the Council meeting can be arranged, if requested. 2. SUBMIT THE ANNUAL ASSESSMENT LEVY SOFA will cause the annual Special Tax to be levied on the secured roll of the County of San Diego by compiling and transmitting a complete list of the actual Special Tax for each Assessor's parcel in the CFO which is levied to the Auditor's office with a copy of the current year's resolution and a letter of authorization identifying the number and amount of the charges via the required format. 3. RESUBMISSION OF ANY REJECTIONS/CORRECTIONS If necessary, identify unapplied charges and research corrected parcel numbers. Resubmit under corrected Assessor's parcel numbers prior to Auditor's resubmittal deadline. 4. PREPARE ANNUAL REPORT Prepare and provide to City staff final Annual Reports for the CFO. The CFO report is proposed to provide a boundary map updated with annexed properties, an Information Packet, a parcel listing, the cash flows, the resolution and submittal certification letter, the current and original project schedules. The report will be provided in both hard copy and electronic format. An electronic copy of the CFD data base will be provided to the MIS Department to allow the City to update the parcel data with applicable flags denoting participation in the CFO along with the annexation date. TASK3: 1. ANNEXATIONS Once notified by staff of property to be annexed, SOFA will coordinate the annexation process. The annexation process includes: • Requesting from the annexing property owner or representative, a title or lot book report less than 30 days old, a general description of the project and dates on entitlement, and an annexation check made out to the City of Carlsbad. • Requesting property entitlement information from the Planning Department. • Coordinating the preparation of the annexation map with the Engineering Department. • Coordinating with staff the date and time of the election. 9 City Attorney Approved Version 6/12/18 • Preparing and distributing ballot(s) and waiver(s) to the owner(s) of record. • Preparing a draft agenda bill for staff review. • Reviewing title reports for ownership accuracy. • Verifying signatures on the annexation documents. • Attending the scheduled election. • Coordinating the signature of the City Clerk as the Election Official. • Attending Council meeting, if requested by staff. • Recording the boundary map and Notice of Special Tax Lien within 15 days of Council action. • Providing staff with a complete set of documents for their files. 2. REVIEW ADMINISTRATIVE PROCEDURES SOFA will be pleased to meet with City staff to discuss the status of the CFO and any procedural changes which the City or SOFA feels would benefit the administration of the CFO. 3. APPEALS ACTIONS SOFA will be responsible for the following, at the request of staff: • Preparing a draft analysis of the appeal issue to discuss with staff. • Attending the Appeals Board meeting and presenting the appeal. • Taking direction from the Appeals Board on further actions. • Summarizing the decision of the Appeals Board action in a draft agenda bill for staff review and preparing a draft response to the appealing party. • Attending Council meeting, if requested, by staff. 4. RESPOND TO INQUIRIES All requests made by staff, property owners or developers will be addressed by telephone, fax or letter to acknowledge their request within one business day of receipt of their request. The requesting party will be provided with either immediate information or an estimate of when the information will be forthcoming. An annual information packet, to be signed by both staff and SOFA, will be prepared and sent to all requesting parties. SOFA will perform tax calculations for property owners and developers upon request. TASK4: 1. OTHER SPECIAL RESEARCH/CONSUL TING PROJECTS At the request of staff and as detailed by an amendment to this Agreement, additional services will be performed for Special Research and/or Consulting Projects. 10 City Attorney Approved Version 6/12/18 FEES AND EXPENSES: The following provides not-to-exceed figures for the Scope of Work, Tasks 1, 2 and 3 as requested. The figures for each Task are very difficult to determine as some of the tasks may not be performed on an annual basis, such as appeals actions, and some of the tasks may occur several times annually, such an annexations. Services will be performed at an hourly rate with not-to-exceed amounts for Tasks 1, 2 and 3. Task 4 will be preformed on an hourly basis. The table below provides current hourly billing rates Task 1: SOFA proposes an hourly not-to-exceed amount for Administration Services included under Task 1 to be $35,000. Task 2: SOFA proposes an hourly not-to-exceed amount for Administration Services included under Task 2 to be $15,000. Task 3: SOFA proposes an hourly not-to-exceed amount for Administration Services included under Task 3 to be $15,000. HOURLY BILLING RATES Principal Senior Associate Associate Secretary EXPENSES $205.00 $125.00 $95.00 $85.00 Expenses will be passed through at cost Expenses include postage, including overnight delivery, copying, and the purchase of data from other sources. An example of purchased data would include assessor parcel maps and County of San Diego Assessor data, etc. Should the Administration/Consulting Services of SOFA be placed on hold or cancelled by any authorized party, the services provided current to such date will be billed at our hourly billing rate as noted above. Special District Financing & Administration does not currently anticipate requiring the services of any outside subcontractor to perform the tasks requested. To the extent that the City requests additional services as is generally provided for in our agreements, SDFA reserves the right to employ subcontractor(s) if approved by the City of Carlsbad. 11 City Attorney Approved Version 6/12/18 ACORD• CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DDIYYYY) ~ 11/11/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Brian Grant NAME: Pacific Premier Insurance Assoc., Inc. P.~_9N,t c_,_ (858) 386-4443 I FAX IA/C Nol: (858) 386-4445 3160 Camino Del Rio S #118 E-MAIL certs@pacinsure.com ADDRESS: INSURERISl AFFORDING COVERAGE NAIC# San Diego CA 92108 INSURER A: CITIZENS INS CO OF AMER 31534 INSURED INSURER B: PHILADELPHIA IND INS CO 18058 Special District Financing & Administration LLC INSURERC: 437 W Grand Ave INSURER □: INSURER E: Escondido CA 92025 INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL SUBR POLICY EFF POLICY EXP LTR TYPE OF INSURANCE ,.,~n un,n POLICY NUMBER IMM/DDIYYYYI IMM/DDIYYYYI LIMITS X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 2,000,000 f--D CLAIMS-MAOE IX] OCCUR DAMAGE TO RENTED f--PREMISES /Ea occurrence\ $ 300,000 MED EXP (Any one person) $ 5,000 f-- A OBF-D376380-02 09/25/2019 09/25/2020 PERSONAL & ADV INJURY $ 2,000,000 f-- GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 4,000,000 ~ □PRO-DLoc PRODUCTS -COMP/OP AGG $ 2,000,000 POLICY JECT OTHER: $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 /Ea accidentl f--✓ ANY AUTO BODILY INJURY (Per person) $ f--~ OWNED SCHEDULED A OBF-D376380-02 09/25/2019 09/25/2020 BODILY INJURY (Per accident) $ f--AUTOS ONLY X AUTOS X HIRED NON-OWNED PROPERTY DAMAGE $ AUTOS ONLY AUTOS ONLY /Per accidentl $ UMBRELLA LIAB H OCCUR EACH OCCURRENCE $ f-- EXCESS LIAB CLAIMS-MADE AGGREGATE $ OED I I RETENTION $ $ WORKERS COMPENSATION I PER I I OTH- AND EMPLOYERS" LIABILITY STATUTE ER YIN ANY PROPRIETOR/PARTNER/EXECUTIVE □ NIA E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? (Mandatory In NH) E.L. DISEASE -EA EMPLOYEE $ If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ Professional Liability Limit of Liability $1,000,000 ./ B PHSD1426037 04/13/2019 04/13/2020 Deductible Per Claim $2500 DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space Is required) **Cert holder is additionally insured per special broadening endorsement 391-1006 08 16** CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Carlsbad 1635 Faraday Ave AUTHORIZED REPRESENTATIVE Carlsbad CA 92008 ~L>e--- © 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD !&~Hanover ~ Insurance Group_ OBF D376380 5701176 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. A VENUES BUSINESSOWNERS DELUXE SILVER BROADENING ENDORSEMENT This endorsement modifies insurance provided under the following: BUSINESSOWNERS COVERAGE FORM The following is added to SECTION I -PROPERTY: The limits applicable to the coverages included in this endorsement may either be in addition to or included within the applicable Limit of Insurance. For application of the limits, refer to each coverage within this endorsement. Words or phrases in quotation marks have special meanings. The meaning of· words or phrases in quotation marks is explained within the applicable coverage section. The coverages in this endorsement amend the coverage provided under the Businessowners Coverage Form through new coverages and replace coverage grants. These coverages are subject to the provisions applicable to this policy, except where amended within this endorsement. If any of the property covered by this endorsement is also covered under any other provisions of the policy of which this endorsement is made a part of, or if more than one coverage under this endorsement applies, in the event of loss or damage, you may choose only one of these coverages to apply to that loss. The most we will pay in this case is the limit of insurance applying to the coverage you select. Coverages included in this endorsement apply either separately to each described premises or on an occurrence basis. Refer to each coverage within this endorsement for application of coverage. We provide no coverage for Business Income; Extended Business Income; Extra Expense; or Business Income and Extra Expense from Dependent Properties for any of the Coverages included as part of this endorsement unless specifically stated, and then only to the extent provided for within that Scheduled or Blanket Coverage provision. I. COVERAGES A. Scheduled Coverages Limit Paae 1. Advertising Expense to Regain Customers $2,500 3 2. Backup or Overflow of a Sewer, Drain or Sump Included. 3 3. Brands and Labels Included 3 4. Contingent Transit Business Income and Extra Expense $100,000 4 5. Business Income and Extra Expense from Dependent Properties $100,000 4 6. Transit Business Income and Extra Expense $50,000 4 7. Business Income from Websites $50,000 I 7 days 5 8. Computer and Funds Transfer Fraud $10,000 5 9. Consequential Loss to Stock Included 5 10. Contract Penalties $25,000 5 11. Denial of Access to Premises 30 Days; 72 Hour 5 Waiting Period 12. Employee Theft Including ERISA Compliance $25,000 6 13. Expediting Expenses $25,000 6 14. Extended Business Income 90 days 6 15. Fine Arts $50,000 6 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 17 A. Scheduled Coverages Limit Page 16. Fire Protection Equipment Recharge Included 7 17. Forgery or Alteration $50,000 7 18. Hired Auto -Physical Damage $50,000 7 19. International Air Shipments $10,000 8 20. Interruption of Computer Operations $15,000 8 21. Inventory and Loss Appraisal $25,000 8 22. Key Replacement and Lock Repair $2,500 9 23. Lessor's Lease Cancellation $10,000 9 24. Lessor's Tenant Move Expenses $10,000 / 60 9 days 25. Marring and Scratching Included 9 26. Money and Securities $10,000 10 27. Money Orders and Counterfeit Money $25,000 10 28. Newly Acquired or Constructed Property -Business Income and Extra $500,000 10 Expense 29. Ordinance or Law -Demolition and Increased Cost of Construction $25,000 10 30. Ordinance or Law -Increased Period of Restoration $10,000 10 31. Ordinance or Law (Tenant's Improvement Extension) $25,000 11 32. Outdoor Property $25,000 11 33. Personal Effects $25,000 11 34. Portable Electronic Devices Coverage Worldwide $10,000 11 35. Precious Metal Theft Payment Changes $25,000 12 36. Preservation of Property -Expense $25,000 12 37. Personal Property in Transit $50,000 12 38. Personal Property of Others -Replacement Cost Provision Included 12 39. Sales Representative Samples $25,000 12 40. Soft Costs $10,000 12 41. Spoilage $25,000 13 42. Temporary Relocation of Property $50,000 14 43. Tenant Signs $20,000 14 44. Underground Water Seepage $100,000 14 45. Utility Services -Direct Damage $25,000 15 Utility Services -Business Income $25,000 46. Worldwide Property Off Premises $50,000 16 B. Blanket Coverages Limit $150 000 Paae 1. Accounts Receivable Included 16 2. Computer Equipment Included 16 3. Debris Removal Included 16 4. Property of Others Included 17 5. Valuable Papers and Records (Other Than Electronic Data) Included 17 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 2 of 17 !&~Hanover ~ Insurance Group_ OBF D376380 5701176 The Blanket Limit of Insurance shown above applies to all Coverages shown in Section B of this endorsement. At the time of loss, you may elect to apportion this Blanket Limit of Insurance to one or any combination of the Coverages shown, but under no circumstances will the aggregate apportionment be permitted to exceed the Blanket Limit of Insurance shown above. The Blanket Limit of Insurance applies per occurrence. II. DEDUCTIBLES Deductibles are subject to the prov1s1ons applicable to the Businessowners Coverage Form except as provided below. We will not pay for covered loss or damage in any one occurrence unless the amount of loss or damage exceeds the applicable Deductible amount. We will then pay the amount of loss or damage in excess of the Deductible up to the applicable Limit of Insurance. Ill. COVERED PROPERTY A. Scheduled Coverages 1. Advertising Expense to Regain Customers The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Advertising Expense to Regain Customers (1) If we make payment for a Covered Cause of Loss under this policy and there is a "suspension" of operations caused by direct physical loss or damage to property, we will pay for necessary advertising expenses you incur solely to regain customer faith and approval. (2) We will only pay the nece~sary advertising expenses that you incur within 60 consecutive days after the "period of restoration" ends. (3) The most we will pay under this Additional Coverage for all necessary advertising expenses in any one policy year is $2,500. 2. Backup or Overflow of a Sewer, Drain or Sump The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Backup or Overflow of a Sewer, Drain or Sump (1) We will pay for direct physical loss or damage to Covered Property at the described premises, solely caused by or resulting from water or waterborne material carried or moved by water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment. The term drain includes a roof drain and its related fixtures. (2) For the purpose of this Additional Coverage only, SECTION I PROPERTY, B. Exclusions, paragraph 1.g. Water (3) is deleted. (3) Payment under this Additional Coverage is included within the applicable Limit of Insurance for Covered Property at a premises described in the Declarations. This Additional Coverage does not increase the Limits of Insurance. (4) Special Sewer Backup Exclusion We will not pay for: (a) Loss or damage from water or other materials that back-up or overflow from any sewer or drain, sump, sump pump or related equipment when it is caused by or results from any "flood", regardless of the proximity of the back-up or overflow to the "flood" condition; or (b) Failure to keep a sump pump or its related equipment in proper working condition; or (c) Failure to perform routine maintenance or repair necessary to keep a sewer or drain free from obstructions. 3. Brands and Labels The following is added to SECTION I - PROPERTY, A. Coverage, 6. Coverage Extensions: Brands and Labels (1) If Covered Property that has a brand or label is damaged by a Covered Cause of Loss and we elect to take all or any part of the damaged property at an agreed or appraised value, you may extend the insurance that applies to your Business Personal Property to: (a) Pay expenses you incur to: (i) Remove the brand or label and then relabel the damaged property to comply with any applicable law; or 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 3 of 17 (ii) Label or stamp the damaged property Salvage, if doing so will not physically damage the property. (b) Cover any reduction in the salvage value of the damaged property as a result of the removal of the brand or label. (2) Payment under this Extension is included within the Limit of Insurance applicable to your Business Personal Property. 4. Contingent Transit Business Income and Extra Expense The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Contingent Transit Business Income and Extra Expense You may extend your Business Income or Extra Expense Coverage to apply to the actual loss of Business Income (not including Extended Business Income) or Extra Expense you sustain due to direct physical loss of or damage to Business Personal Property of Others, not in your care, custody or control, while "in transit", caused by or resulting from a Covered Cause of Loss. The most we will pay for loss under this Extension is $100,000. 5. Business Income and Extra Expense - Dependent Properties The heading for SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, m. Business Income from Dependent Properties is replaced by the following: m. Business Income and Extra Expense from Dependent Properties The following is added to Business Income and Extra Expense from Dependent Properties: We will pay the necessary Extra Expense you incur due to direct physical loss of or damage to "dependent property" caused by or resulting from a Covered Cause of Loss. The definition of Extra Expense for this Additional Coverage is replaced by the following: Extra Expense means necessary expenses you incur during the "period of restoration" for the "dependent property" that you would not have incurred if there had been no direct physical loss or damage to the premises of any "dependent property" caused by or resulting from a Covered Cause of Loss: (1) To avoid or mm1m1ze the "suspension" of business and to continue "operations"; or (2) To minimize the "suspension" of business if you cannot continue "operations". We will reduce the amount of your Extra Expense loss to the extent you can return "operations" to normal and discontinue such Extra Expense. (3) Paragraph (2) of this Additional Coverage is replaced by the following: (2) The most we will pay under this Additional Coverage is $100,000 per occurrence, regardless of the number of "dependent properties" affected. 6. Transit Business Income and Extra Expense The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Transit Business Income and Extra Expense (1) We will pay the actual loss of Business Income you sustain and necessary and reasonable Extra Expense you incur caused by direct physical loss of or direct physical damage to Covered Property while "in transit" caused by or resulting from a Covered Cause of Loss. (2) SECTION I PROPERTY, B. Exclusions, paragraphs 1.b Earth Movement and 1.g Water do not apply to this Additional Coverage: (3) The most we will pay for loss in any one occurrence under this Additional Coverage is $50,000. (4) The amount payable under this Additional Coverage is additional insurance. 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 4 of 17 7. Business Income from Websites a. The following is added to SECTION I -PROPERTY A. Coverage, 5. Additional Coverages: Business Income from Websites (1) You may extend this insurance to apply to a "suspension" of "operations" caused by direct physical loss or damage to property that you depen~ o~ for "web site and communications services" from a Covered Cause of Loss. (2) We will not pay for any loss of Business Income you incur during the first 12 hours !hat immediately follows the time when you first discovered the Covered Cause of Loss. This Waiting Period does not apply to Extra Expense. (3) The most we will pay for the actual loss of Business Income and necessary and reasonable Extra Expense in any one occurrence under this Additional Coverage is $50,000 and only for the 7-day period immediately following the Covered Cause of Loss. (4) Coverage does not apply to Websites unless there is a duplicate or back-up copy of your Web Page stored at a location that is at least 1,000 feet away from the premises of the vendor that provides "web site and communications services". (5) "Web Site and Communication Services" means: (a) Internet access, e-mail, web hosting, value added network services and application software services at the premises of others; or (b) Network and router infrastructure services, including cable and wireless, located more than 1,000 feet from the described premises. b. This Additional Coverage is not subject to SECTION I -PROPERTY, C. Limits of Insurance. 8. Computer and Funds Transfer Fraud SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, hh. Computer !&~Hanover ~ Insurance Group_ OBF D376380 5701176 and Funds Transfer Fraud, paragraph (3) is replaced by the following: (3) The most we will pay per occurrence under this Additional Coverage is $10,000_ unless a ~igher Limit of Insurance 1s shown in the Schedule of Amended Limits of Insurance. 9. Consequential Loss to Stock The following is added to SECTION I - PROPERTY, A. Coverage, 6. Coverage Extensions: Consequential Loss to Stock (1) You may extend the insurance that applies to your Business Personal Property to apply to the reduction in value of the remaining parts of "stock" in process of manufacture that are physically undamaged but are unmarketable as a complete product because of direct physical loss or damage from a Covered Cause of Loss to other parts of covered "stock" in process of manufacture at an insured location. (2) Should it be determined that such "stock" retains only a salvage value, we retain the option of paying the full value of the "stock" as agreed within this policy, and taking the damaged property for salvage purposes. (3) Payment under this Coverage Extension is included within the applicable Limit of Insurance. 10. Contract Penalties The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Contract Penalties (1) We will pay for contract penalties you are required to pay due to your failure to provide your product or service according to contract terms because of direct physical loss or damage by a Covered Cause of Loss to Covered Property. (2) The most we will pay for all penalties in any one occurrence is $25,000. (3) The amount payable under this Additional Coverage is additional insurance. 11. Denial of Access to Premises The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages : 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 5 of 17 Denial of Access to Premises (1) We will pay for the actual loss of Business Income you sustain and necessary Extra Expense you incur when ingress to or egress from the described premises is prevented, due to direct physical loss of or damage to property that is away from but within 2000 feet of the described premises, caused by or resulting from any Covered Cause of Loss covered under this policy. (2) The coverage for Business Income will begin 72 hours after the loss or damage to the premises that causes the denial of access and will apply for a period of up to 30 consecutive days after coverage begins. (3) The coverage for Extra Expense will begin immediately after the loss or damage to the premises that causes the denial of access and will end: (a) 30 consecutive days after coverage begins; or (b) When your Business Income coverage ends; whichever is earlier. (4) The definitions of Business Income and Extra Expense contained in the Business Income Additional Coverage and the Extra Expense Additional Coverage also apply to this Denial of Access to Premises Additional Coverage. 12. Employee Theft including ERISA Compliance SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, p. Employee Theft Including ERISA, paragraph (6), is replaced by the following: (6) The most we will pay for all loss resulting directly from an occurrence is $25,000. Regardless of the number of years this policy remains in force or the number of premiums paid, no Limit of Insurance cumulates from year to year. 13. Expediting Expenses The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Expediting Expenses (1) When a Covered Cause of Loss occurs to Covered Property, we will pay for the reasonable and necessary additional expenses you incur to: (a) Make temporary repairs; (b) Expedite permanent repair or replacement of damaged property; or (c) Provide training on replacement machines or equipment. (2) The most we will pay for loss under this Additional Coverage in any one occurrence is $25,000. (3) The amount payable under this Additional Coverage is additional insurance. 14. Extended Business Income SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, f. Business Income, (2) Extended Business Income, (a) Extended Business Income -Other Than Rental Value, paragraph (ii) and (b) Extended Business Income -Rental Value, paragraph (ii) are replaced by the following: (a) Extended Business Income -Other Than Rental Value (ii) Ends on the earlier of: 1) The date . you could restore your operations, with reasonable speed, to the level which would generate the business income amount that would have existed if no direct physical loss or damage had occurred; or 2) 90 consecutive days after the date determined in (2)(a)(i) above. (b) Extended Business Income -Rental Value (ii) Ends on the earlier of: 1) The date you could restore tenant occupancy, with reasonable speed, to the level which would generate the "Rental Value" that would have existed if no direct physical loss or damage had occurred; or 2) 90 consecutive days after the date determined in (2)(b)(i) above. 15. Fine Arts 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 6 of 17 SECTION I Coverage paragraph following: -PROPERTY, A. Coverage, 6. Extensions, x. Fine Arts, (3), is replaced by the (3) The most we will pay for loss under this Additional Coverage is $50,000 per occurrence regardless of the number of locations or buildings involved. 16. Fire Protection Equipment Recharge SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, o. Fire Protection Systems Recharge, paragraph (3), is replaced by the following: (3) This Coverage Extension is included within the Limit of Insurance applicable to your covered property at the described premises. This Coverage Extension does not increase the Limits of Insurance. 17. Forgery or Alteration SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, k. Forgery or Alteration, paragraph (5) is replaced by the following: (5) The most we will pay for any loss, including legal expenses, under this Additional Coverage is $50,000, unless a higher Limit of Insurance is shown in the Schedule of Amended Limits of Insurance. 18. Hired Auto -Physical Damage The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Hired Auto -Physical Damage Coverage (1) We will pay for loss to an "auto" you or an "employee", at your direction, lease, hire or rent without a driver for a period of 30 days or less for the purpose of conducting customary operations for your business. This does not include any "auto" you lease, hire or rent from any of your "employees" or members of their households. We will pay for loss to a covered "auto" or its equipment caused by: (a) Comprehensive coverage From any cause except: (i) The covered "auto's" collision with another object; or (ii) The covered "auto's" overturn. !&~Hanover ~ Insurance Group_ OBF D376380 5701176 (b) Collision coverage (i) The covered "auto's" collision with another object; or (ii) The covered "auto's" overturn. (2) For the purpose of this Additional Coverage only, SECTION I PROPERTY, A. Coverage, 2. Property Not Covered, paragraph a. is replaced by the following: a. Aircraft, automobiles, motortrucks and other vehicles subject to motor vehicle registration and: (1) Any "auto" as described in paragraph (1) above, while used in any professional or organized racing or demolition contest or stunting activity, or while practicing for such contest or activity; (2) Tapes, records, discs or other similar audio, visual or data electronic devices designed for use with audio, visual or data electronic equipment; (3) Any device designed or used to detect speed measuring equipment such as radar or laser detectors and any jamming apparatus intended to elude or disrupt speed measurement equipment; or (4) Any electronic equipment, without regard to whether this equipment is per_manently installed, that receives or transmits audio, visual or data signals and that is not designed solely for the reproduction of sound. (3) For the purpose of this Additional Coverage only, SECTION I PROPERTY, B. Exclusions does not apply with the exception of the following exclusions: (a) 1.d. Nuclear Hazard; (b) 1.f. War and Military Action For the purpose of this Additional Coverage only, the following exclusions are added to SECTION I -PROPERTY, B. Exclusions: 1. We will not pay for loss to a covered "auto" caused by or resulting from someone causing you to voluntarily part with the 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 7 of 17 "auto" by trick or scheme or under false pretenses; or 2. We will not pay for loss caused by or resulting from wear and tear, freezing; mechanical or electrical breakdown; blowouts, punctures or other road damage to tires. (4) For the purpose of this Additional Coverage only, the following is added to SECTION I -PROPERTY, C. Limits of Insurance: Hired Auto Physical Damage Limits of Insurance The most we will pay for loss to any one covered "auto" is the lesser of: a. The actual cash value of the damaged or stolen property as of the time of loss; b. The cost of repairing or replacing the damaged or stolen property with other property of like kind and quality; or c. $50,000. (5) The following is added to SECTION I PROPERTY, D. Deductibles, paragraph 5.: Hired Auto -Physical Damage (6) For the purpose of this Additional Coverage only, the following is added to SECTION I -PROPERTY, G. Property Definitions: 1. "Auto" means a land motor vehicle, trailer or semitrailer that is subject to motor vehicle registration, or designed for travel on public roads, including any attached machinery or equipment. The amount payable under this Additional Coverage is additional insurance. This coverage is excess to any other valid insurance whether collectible or not. 19. International Air Shipments The following is added to SECTION I - PROPERTY, A. Coverage, 6. Coverage Extensions: International Air Shipments (1) You may extend the insurance that applies to your Business Personal Property and Personal Property of Others that you ship to apply to that property; while being shipped by air: (a) Anywhere within the Coverage Territory to or from a location outside of the coverage territory; or (b) Between locations outside of the coverage territory; (2) This coverage extension only applies to the shipment of your property which originates and terminates at a location specified in the air waybill. (3) The most we will pay for loss or damage under this Extension in any one occurrence is $10,000. (4) Special International Air Shipments Exclusion This Extension does not apply to: Business Personal Property if there is other insurance in force covering the same loss. 20. Interruption of Computer Operations SECTION I PROPERTY, A. Coverage, 5. Additional Coverages, ee. Interruption of Computer Operations, paragraph (3) is replaced by the following: (3) The most we will pay under this Additional Coverage Interruption of Computer Operations for all loss sustained and expense incurred in any one policy year, regardless of the number of interruptions or the number of described premises or computer systems involved, is $15,000 unless a higher Limit of Insurance is shown in the Declarations. If loss payment relating to the first interruption does not exhaust this amount, then the balance is available for loss or expense sustained or incurred as a result of subsequent interruptions in that policy year. A balance remaining at the end of a policy year does not increase the amount of insurance in the next policy year. With respect to any interruption which begins in one policy year and continues or results in additional loss or expense in a subsequent policy year(s), all loss and expense is deemed to be sustained or incurred in the policy year in which the interruption began. 21. Inventory and Loss Appraisal SECTION I PROPERTY, A. Coverage, 6. Coverage Extensions, j. Inventory and Loss Appraisal, paragraph (2) is replaced by the following: 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 8 of 17 (2) Regardless of the number of premises involved, the most we will pay under this Extension is $25,000. 22. Key Replacement and Lock Repair SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, g. Key Replacement and Lock Repair, paragraph (2), is replaced by the following: (2) The most we will pay under this Extension is $2,500. The Deductible does not apply to this Extension. 23. Lessor's Lease Cancellation The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Lessor's Lease Cancellation (1) We will pay the actual loss of business income you sustain due to the cancellation of a lease by your tenants in a Covered Building due to untenantability that is caused by direct physical loss or damage to that building from a Covered Cause of Loss. This Additional Coverage only applies if at the time of loss the building was occupied and business was being conducted by the tenant cancelling the lease or their sub-lessee. (2) We will pay for loss of business income that you sustain after tenantability is restored and until the earlier of: (a) The date you lease the premises to another tenant; or (b) 12 months immediately following the "period of restoration". (3) Regardless of the number of tenants cancelling a lease at the described premises, the most we will pay under this Additional Coverage is $10,000 per occurrence (4) The amount payable under this Additional Coverage is additional insurance. (5) Special Lease Cancellation Exclusions We wi 11 not pay for: (a) Lease cancelled after the "period of restoration"; (b) Lease cancelled, suspended or allowed to lapse by you; !&~Hanover ~ Insurance Group_ OBF 0376380 5701176 (c) Return of prepaid rent or security and other deposits made by tenants; or (d) Lease cancelled at the normal expiration date. 24. Lessor's Tenant Move Expenses The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Lessor's Tenant Move Expenses (1) In the event that your tenants must temporarily vacate the covered Building at the described premises due to untenantability caused by direct physical loss or damage by a Covered Cause of Loss, we will pay the following expenses you actually incur to move those tenants out of and back into your covered Building. (2) We will only pay for the following expenses: (a) Packing, transporting and unpacking the tenant's Business Personal Property including the cost of insuring the move out and back and any necessary disassembly and reassembly or setup of furniture and equipment; and (b) The net cost to discontinue and re-establish the tenants' utility and telephone services, after any refunds due the tenants. (3) We will only pay for these expenses that you actually incur within 60 days of the date that the damaged buildings has been repaired or rebuilt. (4) Regardless of the number of tenants involved, the most we will pay under this Additional Coverage is $10,000 per occurrence. This Additional Coverage is not subject to the Limits of Insurance under SECTION I -PROPERTY. 25. Marring and Scratching The following is added to SECTION I - PROPERTY, A. Coverage, 6. Coverage Extensions: Marring and Scratching (1) You may extend the insurance that applies to Business Personal Property to apply to damage caused directly by 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 9 of 17 sudden and accidental marring and scratching of: (a) Your "stock"; (b) Your printing plates; or (c) Property of others that is in your care, custody or control. (2) This Coverage Extension does not apply to: (a) Property • at other than the described premises; or (b) Property "in transit". (3) Payment under this Coverage Extension is included within Limit of Insurance applicable to your Business Personal Property. 26. Money and Securities SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, s. Money and Securities, paragraph (5)(b) is replaced by the following: (b) $10,000 or the amount shown in the Additional Property Coverage Schedule Outside the Premises for "money" and "securities" while at any other location listed in (1) above and while in the coverage territory. 27. Money Orders and Counterfeit Money SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, j. Money Orders and Counterfeit Money, paragraph (3), is replaced by the following: (3) The most we will pay for any loss under this Additional Coverage is $25,000. 28. Newly Acquired or Constructed Property - Business Income and Extra Expense SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, a. Newly Acquired or Constructed Property, paragraph (3) Business Income and Extra Expense is replaced by the following: (3) Business Income and Extra Expense You may extend the insurance that applies to Business Income and Extra Expense to apply to property at any location you acquire. The most we will pay for loss or damage under this Extension is $500,000 at each premises. 29. Ordinance or Law -Demolition Cost and Increased Cost of Construction SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, I. Ordinance or Law, (5) Loss Payment, paragraph (d) is replaced by the following: (d) The most we will pay for the total of all covered losses for Demolition Cost and Increased Cost of Construction for each building described in the Declarations is $25,000 or the amount shown in the Additional Property Schedule. If a damaged building(s) is covered under a Blanket Limit of Insurance and the Blanket Limit of Insurance applies to more than one building or item of property, then the most we will under this Additional Coverage, for each building, is $25,000, or the amount shown in the Additional Property Coverage Schedule. 30. Ordinance or Law -Increased Period of Restoration a. The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages, I. Ordinance or Law, (4) Coverage: If a Covered Cause of Loss occurs to property at the premises described in the Declarations, coverage is extended to include the amount of actual and necessary loss you sustain during the increased period of "suspension" of "operations" caused by or resulting from the enforcement of any ordinance or law that: (a) Regulates the construction or repair of any property; (b) Requires the tearing down of parts of any property not damaged by a Covered Cause of Loss; and (c) Is in force at the time of loss. However, coverage is not extended under this endorsement to include loss caused by or resulting from the enforcement of any ordinance or law which requires: (d) The demolition, repair, replacement, reconstruction, remodeling or remediation of property due to contamination by "pollutants" or due to the presence, growth, proliferation, spread or any activity of "fungi", wet or dry rot or bacteria; or 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 10 of 17 (e) Any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants", "fungi", wet or dry rot or bacteria. b. The following is added to SECTION I - PROPERTY, A. Coverage 5. Additional Coverages, I. Ordinance or Law, (5) Loss Payment, paragraph (c): The most we will pay for loss under Increased Period of Restoration· in any one occurrence is $10,000 for each described building shown in the Declarations or the amount shown in the Additional Property Coverage Schedule. If a damaged building(s) is covered on a blanket Limit of Insurance which applies to more than one building or item of property, then the most we will pay for Increased Period of Restoration for each described building in any one occurrence is $10,000. 31. Ordinance or Law -Tenant Improvements and Betterments a. The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages, I. Ordinance or Law, (4) Coverage: Coverage provided under paragraphs (a), (b) and (c) above applies to tenant's improvements and betterments but only if a Limit of Insurance is shown in the Declarations for Business Personal Property. Business Personal Property must be insured on a replacement cost basis. This extension is provisional and excess to any other valid insurance for tenant's improvements and betterments whether collectible or not. b. The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages, I. Ordinance or Law, (5) Loss Payment, paragraph (c): Regardless of the number of locations insured or buildings involved, the most we will pay for any loss to tenant's improvements and betterments under this Additional Coverage in any one occurrence is $25,000. !&~Hanover ~ Insurance Group .. OBF D376380 5701176 32. Outdoor Property SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, c. Outdoor Property, paragraph (3) is replaced by the following: (3) Regardless of the number of described premises involved, the most we will pay for loss or damage under this Extension, including debris removal expense, is $25,000, but not more than $1,000 for any one tree, shrub or plant. 33. Personal Effects SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, d. Personal Effects, paragraph (3) is replaced by the following: (3) The most we will pay for loss or damage under this Extension is $25,000 at each described premises. 34. Portable Electronic Devices Coverage Worldwide The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Portable Electronic Devices Coverage Worldwide (1) We will pay for loss or damage caused by or resulting from a Covered Cause of Loss to portable electronic devices while anywhere in the world, including while "in transit". (2) For the purpose of this Additional Coverage, the following is added to SECTION I -PROPERTY, G. Property Definitions: Portable electronic devices includes laptops, tablets, e-readers, smartphones or other lightweight, hand-held or wearable devices capable of storing, retrieving and processing data. (3) This coverage is provided when the property is owned by you or owned by others when in your or your "employees"' care, custody or control, subject to SECTION I -PROPERTY, E. Property Loss Conditions, 5. Loss Payment, paragraph d.(3)(b). (4) We will not pay for loss or damage to portable electronic devices when caused by, resulting from, or arising out of "theft" or unexplained loss when 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 11 of 17 the property is checked baggage with a carrier for transit. (5) The provisions for a Business Income loss will be governed by the terms of SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages f. Business Income except: (a) There is no requirement that a loss occur within 1,000 feet or at the described premises as stated in paragraph (1 )(a); and (b) The following are not included under this Additional Coverage: (i) Continuing normal operating expenses incurred, including "payroll expense"; (ii) Extended Business Income. (6) The provisions for Extra Expense loss will be governed by the terms of SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, g. Extra Expense except: (a) There is no requirement that a loss occur within 1,000 feet or at the described premises as stated in paragraph g.(1) and g.(2). (7) Limitations, item b. does not apply to this Additional Coverage. (8) SECTION I -PROPERTY, B. Exclusions, 5. Business Income and Extra Expense Exclusions, paragraph (4) does not apply to this Additional Coverage. (9) Regardless of the number of lost or damaged portable electronic devices, the most we will pay per occurrence including actual loss of Business Income you sustain and necessary Extra Expense you incur, is $10,000. (10)The amount payable under this Additional Coverage is additional insurance. 35. Precious Metal Theft Payment Changes SECTION I -PROPERTY, A. Coverage, 4. Limitations, paragraph c. is replaced by the following: c. For loss or damage by "theft", the following types of property are covered only up to the limits shown: (1) $10,000 for furs, fur garments and garments trimmed with fur. (2) $10,000 for jewelry, watches, watch movements, jewels, pearls, precious and semi-precious stones. This limit does not apply to jewelry and watches worth $250 or less per item. (3) $25,000 for bullion, gold, silver, platinum and other precious alloys or metals. 36. Preservation of Property -Expense The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Preservation of Property -Expense (1) If it is necessary to move Covered Property from the described premises to preserve it from loss or damage by a Covered Cause of Loss, we will pay your expenses to move or store the Covered Property. (2) This coverage applies for 90 days after the property is first moved, but does not extend past the date on which this policy expires. (3) The most we will pay under this Additional Coverage is $25,000. This Additional Coverage is an additional amount of insurance. 37. Personal Property in Transit SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, i. Personal Property in Transit, paragraph (5) is replaced by the following: (5) The most we will pay for loss or damage under this Coverage Extension is $50,000. 38. Personal Property of Others Replacement Cost Provision SECTION I -PROPERTY, E. Property Loss Conditions, 5. Loss Payment, paragraph d.(3)(b) is deleted. 39. Sales Representative Samples SECTION I -PROPERTY, 5. Additional Coverages, y. Sales Representative Samples, paragraph (3) is replaced by the following: (3) The most we will pay for any loss or damage under this Additional Coverage is $25,000. 40. Soft Costs The following is added to SECTION I - PROPERTY, A. Coverage, 6 Extensions: Soft Costs 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 12 of 17 (1) We will pay the actual "soft cost expenses" that arise out of a delay in the construction, erection or fabrication of a Covered Building that is listed in SECTION I -PROPERTY, A. Coverage, 1. Covered Property, paragraph a.(6) resulting from direct physical loss or damage to that Covered Building from a Covered Cause of Loss. (2) We will only pay the necessary "soft cost expenses" that are over and above those costs that would have been incurred had there been no delay. (3) The most we will pay under this Extension in any one occurrence is $10,000. (4) "Soft cost expenses" means additional: (a) Realty taxes and other assessments that you incur for the period of time that construction has been extended beyond the projected completion date; (b) Interest on money borrowed to finance construction, remodeling, renovation or repair; and (c) Advertising, public relations and promotional expenses. 41. Spoilage The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Spoilage The following prov1s1ons (a. through g. inclusive) apply to the insurance provided by this Additional Coverage: a. For the purpose of this Additional Coverage, the following is added to SECTION I -PROPERTY, A. Coverage, 1. Covered Property: Covered Property means "perishable goods" at the insured locations, if the "perishable goods" are: a. Owned by you and used in your business; or b. Owned by others and in your care, custody or control except as otherwise provided in SECTION I -PROPERTY, E. Property Loss Conditions, 5. Loss Payment, paragraph d.(3)(b). !&~Hanover ~ Insurance Group .. OBF D376380 5701176 b. The following is added to SECTION I PROPERTY, A. Coverage, 2. Property Not Covered: Property located: (1) On the exterior of buildings; (2) In the open; or (3) In vehicles. c. SECTION I PROPERTY, A. Coverage, 3. Covered Causes Of Loss is replaced by the following: 3. Covered Causes of Loss Subject to the exclusions described in item E. of this Additional Coverage, Covered Causes of Loss means the following: a. Breakdown or Contamination, meaning: (1) Change in temperature or humidity resulting from mechanical breakdown or mechanical failure of refrigerating, cooling or humidity control apparatus or equipment. Coverage applies only while such apparatus or equipment is at the described premises shown in the Schedule; or (2) Contamination by a refrigerant. Coverage applies only while the refrigerating apparatus or equipment is at the described premises. Mechanical breakdown and mechanical failure do not mean power interruption, regardless of how or where the interruption is caused and whether or not the interruption is complete or partial. b. Power Outage, meaning change in temperature or humidity resulting from complete or partial interruption of electrical power, either on or off the described premises, due to conditions beyond your control. 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 13 of 17 d. SECTION I PROPERTY, A. Coverage, 6. Coverage Extensions does not apply. e. SECTION I PROPERTY, B. Exclusions paragraph 1., does not apply to this Coverage Extension except for: (1) b., Earth Movement; (2) c., Governmental Action; (3) d., Nuclear Hazard; (4) f., War and Military Action; and (5) g., Water. (6) The following exclusions are added: to SECTION I PROPERTY, B. Exclusions, paragraph 2: We will not pay for loss or damage caused by or resulting from: a. The disconnection of any refrigerating, cooling or humidity control system from the source of power. b. The deactivation of electrical power caused by the manipulation of any switch or other device used to control the flow of electrical power or current. c. The inability of an electrical utility company or other power source to provide sufficient power due to: (1) Lack of fuel; or (2) Governmental order. d. The inability of a power source at the described premises to provide sufficient power due to lack of generating capacity to meet demand. e. Breaking of any glass that is a permanent part of any refrigerating, cooling or humidity control unit. f. Conditions For the purpose of this Additional Coverage, SECTION I -PROPERTY, E. Property Loss Conditions, 5. Loss Payment, paragraph d. is replaced by the following: d. We will determine the value of Covered Property as follows: (1) For "perishable goods" you have sold but not delivered, at the selling price less discounts and expenses you otherwise would have had; (2) For other "perishable goods", at actual cash value. f. Regardless of the number of insured locations involved, the most we will pay under this Additional Coverage for loss or damage in any one occurrence is $25,000. This Additional Coverage is not subject to SECTION I -PROPERTY, C. Limits of Insurance. 42. Temporary Relocation of Property The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Temporary Relocation of Property (1) We will pay for loss of or damage to Covered Property from a Covered Cause of Loss while it is away from the described premises, if it is being stored temporarily at a location you do not own, lease or operate while the described premises is being renovated or remodeled. (2) This coverage applies for 90 days after the property is first moved, but does not extend past the date on which this policy expires. (3) The most we will pay under this Additional Coverage is $50,000. (4) The amount payable under this Additional Coverage is additional insurance. 43. Tenant Signs SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, t. Tenant Signs, paragraph (4) is replaced by the following: (4) The most we will pay for loss or damage in any one occurrence is $20,000 regardless of the number of locations or buildings involved. 44. Underground Water Seepage The following is added to SECTION I - PROPERTY, A. Coverage, 5. Additional Coverages: Underground Water Seepage (1) We will pay for direct physical loss or damage to Covered Property at the described premises caused by or 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 14 of 17 resulting from water under the ground surface pressing on, or flowing or seeping through: (a) Foundations, walls, floor or paved surfaces; (b) Basements, whether paved or not; or (c) Doors, windows or other openings in any building or other structure. THIS IS NOT FLOOD INSURANCE OR PROTECTION FROM AN INUNDATION OF SURFACE WATER, HOWEVER CAUSED. This coverage is intended to provide insurance for damage by subterranean water when such event is a localized incident -not part of a general, widespread "flood" water event. We will not pay for loss or damage to property when the subterranean water causing the Underground Water Seepage is itself caused by any "flood" or general flooding conditions - including but not limited to those enumerated under SECTION I - PROPERTY, B. Exclusions, paragraph 1.g. Water. (2) SECTION I -PROPERTY, B. Exclusions, paragraphs g. Water (4) is deleted. (3) The most we will pay for loss in any one occurrence under this Additional Coverage is $100,000. (4) We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds $1,000. This deductible is to apply separately to: (a) Each building, including personal property therein; (b) Personal property in each building if no coverage is provided on the containing building; and (c) Personal property in the open. The aggregate amount of this deductible in any one occurrence shall not exceed $5,000. We will then pay the amount of loss or damage in excess of the deductible up to the applicable Limit of Insurance. (5) Special Underground Water Seepage Exclusions !&~Hanover ~ Insurance Group .. OBF 0376380 5701176 (a) The Exclusions and Limitations sections of SECTION I PROPERTY apply to this Additional Coverage except as provided under paragraph (b) below. (b) To the extent that a part of SECTION I -PROPERTY, B. Exclusions, paragraph 1.g. Water might conflict with this Additional Coverage, that part of the Water Exclusion does not apply. (c) This Additional Coverage does not apply to loss or damage resulting from your failure to: (i) Keep a sump pump or its related equipment in proper working condition; or (ii) Perform the routine maintenance or repair necessary to keep a sewer or drain free from obstructions. 45. Utility Services SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, bb. Utility Services, paragraphs (1) and (2) are replaced by the following: (1) We will pay for loss of or damage to Covered Property caused by an interruption in service to the described premises. The interruption must result from direct physical loss or damage by a Covered Cause of Loss to property not on the described premises that provides the services shown in paragraph (3) below. The most we will pay for loss in any one occurrence under this Additional Coverage is $25,000 at each described premises or the Limit of Insurance shown in the Additional Property Coverage Schedule. (2) We will pay for the actual loss of Business Income you sustain and necessary Extra Expense you incur caused by the interruption of service at the described premises. The interruption must result from direct physical loss or damage by a Covered Cause of Loss to property not on the described premises that provides the services shown in paragraph (3) below. We will only pay for loss you sustain after the first 24 hours following the 391-1389 0816 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 15 of 17 direct physical loss or damage to the property described above. The most we will pay for loss in any one occurrence under this Additional Coverage is $25,000 at each described premises or the Limit of Insurance shown in the Additional Property Coverage Schedule. 46. Worldwide Property Off Premises The following is added to SECTION I - PROPERTY, A. Coverage, 6. Coverage Extensions: Worldwide Property Off Premises (1) You may extend the insurance that applies to your Business Personal Property and Personal Property of Others to apply to that property while it is temporarily outside the coverage territory if it is: (a) Temporarily at a location you do not own, lease or operate; (b) Temporarily on display or exhibit at any fair, trade show or exhibition; (c) Samples of your "stock" in trade in the custody of your sales representatives; or (d) While "in transit" between the described premises and a location described in (a), (b) or (c) above. (2) The most we will pay for loss or damage under this Extension is $50,000. (3) This Extension provides an additional amount of insurance. B. Blanket Coverages 1. Accounts Receivable SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, f. Accounts Receivable, paragraph (2), is replaced by the following: (2) The most we will pay under this Coverage Extension for loss or damage in any one occurrence at the described premises or away from the described premises is subject to the Blanket Coverage Limit of Insurance, or the amount shown in the Additional Property Coverage Schedule. 2. Computer Equipment SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, r. Computer Equipment, paragraph (6) is replaced by the following: (6) Regardless of the number of insured locations involved, the most we will pay for loss or damage under this Additional Coverage to property described in paragraphs (1) and (2) above in any one occurrence at insured locations is subject to the Blanket Coverage Limit of Insurance, or the amount shown in the Additional Property Coverage Schedule. The most we will pay for property listed in paragraphs (1) and (2) above in any one occurrence for such property that you newly acquire is $100,000. With respect to newly acquired property under this Additional Coverage, coverage will end when any of the following occurs: (a) The policy expires; (b) 180 days after you acquire the property listed in (1 )(a -d); (c) You report values to us. The most we will pay for Extra Expense is $5,000 or the amount shown in the Additional Property Coverage Schedule in any one occurrence. This Additional Coverage is not subject to SECTION I - PROPERTY, C. Limits of Insurance. 3. Debris Removal SECTION I -PROPERTY, A. Coverage, 5. Additional Coverages, a. Debris Removal, paragraph (4) is replaced by the following: (4) We will pay up to the blanket limit of insurance for debris removal expense, for each insured location, in any one occurrence of physical loss or damage to Covered Property, if one or both of the following circumstances apply: (a) The total of the actual debris removal expense plus the amount we pay for direct physical loss or damage exceeds the Limit of Insurance on the Covered Property that has sustained loss or damage. (b) The actual debris removal expense exceeds 25% of the sum of the deductible plus the amount that we pay for direct physical loss or damage to the Covered 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 16 of 17 Property that has sustained loss or damage. Therefore, if Paragraphs (4)(a) and/or (4)(b) above, apply, our total payment for direct physical loss or damage and debris removal expense may reach but will never exceed the Limit of Insurance on the Covered Property that has sustained loss or damage, plus the blanket limit of insurance. 4. Property of Others (a) You may extend the Blanket Coverage Limit of Insurance to apply to property of others that is in your care, custody or control, including the cost of labor, materials or services furnished or arranged by you on personal property of others. !&~Hanover ~ Insurance Group .. OBF D376380 5701176 (b) The most we will pay under this provision is subject to the Blanket Coverage Limit of Insurance. 5. Valuable Papers and Records (Other Than Electronic Data) SECTION I -PROPERTY, A. Coverage, 6. Coverage Extensions, e. Valuable Papers and Records (Other Than Electronic Data), paragraph (3) is replaced by the following: (3) Regardless of the number of locations Involved the most we will pay under this Coverage Extension for loss or damage in any one occurrence at the described premises is subject to the Blanket Limit of Insurance, or the amount shown in the Additional Coverage Schedule. ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS REMAIN UNCHANGED 391-1389 08 16 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 17 of 17 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BUSINESSOWNERS LIABILITY SPECIAL BROADENING ENDORSEMENT This endorsement modifies insurance provided under the following: BUSINESSOWNERS COVERAGE FORM ·- SUMMARY OF COVERAGES Limits Page 1. Additional Insured by Contract, Agreement or Permit Included 1 2. Additional Insured -Broad Form Vendors Included 2 3. Alienated Premises Included 3 4. Broad Form Property Damage -Borrowed Equipment, Customers Included 3 Goods and Use of Elevators 5. Incidental Malpractice (Employed Nurses, EMT's and Paramedics) Included 3 6. Personal and Advertising Injury -Broad Form Included 4 7. Product Recall Expense Included 4 Product Recall Expense Each Occurrence Limit $25,000 5 Occurrence Product Recall Expense Aggregate Limit $50,000 5 Aggregate Product Recall Deductible $500 5 ·--- 8. Unintentional Failure to Disclose Hazards Included 6 9. Unintentional Failure to Notify Included 6 This endorsement amends coverages provided under the Businessowners Coverage Form through new coverages and broader coverage grants. This coverage is subject to the provisions applicable to the Businessowners Coverage Form, except as provided below. The following changes are made to SECTION II - LIABILITY: 1. Additional Insured by Contract, Agreement or Permit The following is added to SECTION II - LIABILITY, C. Who Is An Insured: Additional Insured by Contract, Agreement or Permit a. Any person or organization with whom you agreed in a written contract, written agreement or permit to add such person or organization as an additional insured on your policy is an additional insured only with respect to liability for "bodily injury", "property damage", or "personal and advertising injury" caused, in whole or in part, by your acts or omissions, or the acts or omissions of those acting on your behalf, but only with respect to: (1) "Your work" for the additional insured(s) designated in the contract, agreement or permit; (2) Premises you own, rent, lease or occupy; or (3) Your maintenance, operation or use of equipment leased to you. b. The insurance afforded to such additional insured described above: (1) Only applies to the extent permitted by law; and (2) Will not be broader than the insurance which you are required by the contract, agreement or permit to provide for such additional insured. (3) Applies on a primary basis if that is required by the written contract, written agreement or permit. (4) Will not be broader than coverage provided to any other insured. (5) Does not apply if the "bodily injury", "property damage" or "personal and advertising injury" is otherwise excluded from coverage under this Coverage Part, including any endorsements thereto. 391-1006 08 16 Includes copyrighted materials of Insurance Services Offices, Inc., with its permission. Page 1 of 6 c. This provision does not apply: (1) Unless the written contract or written agreement was executed or permit was issued prior to the "bodily injury", "property damage", or "personal injury and advertising injury". (2) To any person or organization included as an insured by another endorsement issued by us and made part of this Coverage Part. (3) To any lessor of equipment: (a) After the equipment lease expires; or (b) If the "bodily injury", "property damage", "personal and advertising injury" arises out of sole negligence of the lessor. (4) To any: (a) Owners or other interests from whom land has been leased if the "occurrence" takes place or the offense is committed after the lease for the land expires; or (b) Managers or lessors of premises if: (i) The "occurrence" takes place or the offense is committed after you cease to be a tenant in that premises; or (ii) The "bodily injury", "property damage", "personal injury" or "advertising injury" arises out of structural alterations, new construction or demolition operations performed by or on behalf of the manager or lessor. (5) To "bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or the failure to render any professional services. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" or the offense which caused the "personal and advertising injury" involved the rendering of or failure to render any professional services by or for you. d. With respect to the insurance afforded to these additional insureds, the following is added to SECTION II -LIABILITY, D. Liability and Medical Expense Limits of Insurance: !&~Hanover ~ Insurance Group. OBF 0376380 5701176 The most we will pay on behalf of the additional insured for a covered claim is the lesser of the amount of insurance: 1. Required by the contract, agreement or permit described in Paragraph a.; or 2. Available under the applicable Limits of Insurance shown in the Declarations. This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations e. All other insuring agreements, exclusions, and conditions of the policy apply. 2. Additional Insured -Broad Form Vendors The following is added to SECTION II - LIABILITY, C. Who Is An Insured: Additional Insured -Broad Form Vendors a. Any person or organization that is a vendor with whom you agreed in a written contract or written agreement to include as an additional insured under this Coverage Part is an insured, but only with respect to liability for "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business. b. The insurance afforded to such vendor described above: (1) Only applies to the extent permitted by law; (2) Will not be broader than the insurance which you are required by the contract or agreement to provide for such vendor; (3) Will not be broader than coverage provided to any other insured; and (4) Does not apply if the "bodily injury", "property damage" or "personal and advertising injury" is otherwise excluded from coverage under this Coverage Part, including any endorsements thereto c. With respect to insurance afforded to such vendors, the following additional exclusions apply: The insurance afforded to the vendor does not apply to: (1) "Bodily injury" or "property damage" for which the vendor is obligated to pay damages by reasons of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the insured would have in the absence of the contract or agreement; (2) Any express warranty unauthorized by you; 391-1006 08 16 Includes copyrighted materials of Insurance Services Offices, Inc., with its permission. Page 2 of 6