Attachment 1 - SCI Consulting PSA - 12.2019 — Mayor and City Council, June 5, 2024

PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF SAN BERNARDINO

AND SCI CONSULTING GROUP
This Agreement is made and entered into as of December 4, 2019 by and between the City of San Bernardino, a charter city and municipal corporation organized and operating under the laws of the State of California with its principal place of business at Vanir Tower, 290 North D Street, San Bernardino, CA 92401 ("City"), and SCI Consulting Group, with its principal place of business at 4745 Mangels Blvd., Fairfield, CA 94534 (hereinafter referred to as "Consultant"). City and Consultant are hereinafter sometimes referred to individually as "Party" and collectively as the "Parties."

RECITALS
A. City is a public agency of the State of California and is in need of professional services for the following project:

Cannabis Monitoring and Financial Audit Services (hereinafter referred to as "the Project").

Consultant is duly licensed and has the necessary qualifications to provide such services.

C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein.

AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

Incorporation of Recitals. The recitals above are true and correct and are hereby incorporated herein by this reference.

Services. Consultant shall provide the City with the services described in the Scope of Services attached hereto as Exhibit "A."
Professional Practices. All professional services to be provided by Consultant pursuant to this Agreement shall be provided by personnel identified in their proposal.

This Agreement and shal advise City of any changes in any tavs that may after onslam of performance of this Agreement. Consultant further represents that no City employee will provide any services under this Agreement.

4. Compensation.
a. Subject to paragraph 4(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit "A." 1 b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of $419,000.00. This amount is to cover all related costs, and the City will not pay any additional fees for printing expenses. Consultant may submit invoices to City for approval. Said invoice shall be based on the total of all Consultant's services which have been completed to City's sole satisfaction. City shall pay Consultant's invoice within forty-five (45) days from the date City receives said invoice. The invoice shall describe nea promed and the set led time in detail the services performed and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices.

5. Additional Work. If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the City and executed by both Parties before performance o such services, or the City will not be required to pay for the changes in the scope of work. Sucl amendment shall not render ineffective or invalidate unaffected portions of this Agreement.

6. Term. This Agreement shall commence on the Effective Date and continue through January 30, 2023, with Two (2) written one year extensions unless the Agreement is previously terminated as provided for herein."

7. Maintenance of Records: Audits.

Records of Consultant's services relating to this Agreement shall be maintained in accordance with generally recognized accounting principles and shall be made available to City for inspection and/or audit at mutually convenient times for a period of four (4) years from the Effective Date.

Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by City.

8. Time of Performance. Consultant shall perform its services in a prompt and timely manner and shall commence performance upon receipt of written notice from the City to proceed. Consultant shall complete the services required hereunder within Term.

9. Delays in Performance.
a. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint.
b. Should such circumstances occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party 2 describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement.

10. Compliance with Law.

Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state, federal and local government, including Cal/OSHA requirements.
b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by state and local regulatory agencies. generaly accepted pard of che pr islam tri services will be performed in accordance with of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions.

Conflicts of Interest. During the term of this Agreement, Consultant shall at all times maintain a duty of loyalty and a fiduciary duty to the City and shall not accept payment from or employment with any person or entity which will constitute a conflict of interest with the City.

13. City Business Certificate. Consultant shall, prior to execution of this Agreement, obtain and maintain during the term of this Agreement a valid business registration certificate from the City pursuant to Title 5 of the City's Municipal Code and any and all other licenses, permits, qualifications, insurance, and approvals of whatever nature that are legally required of Consultant to practice his/her profession, skill, or business.

Assignment and Subconsultant. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination.

Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder.

Independent Consultant. Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided.

16. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section. 3 a. Additional Insured
The City of San Bernardino, its officials, officers, employees, agents, and volunteers shall be named as additional insureds on Consultant's and its subconsultants' policies of commercial general liability and automobile liability insurance using the endorsements and forms specified herein or exact equivalents.
b. Commercial General Liability
The Consultant shall take out and maintain, during the
performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to (ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following:

Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent.
(iii) Commercial General Liability Insurance must include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Contract (8) Broad Form Property Damage
(9) Independent Consultants Coverage
The policy shall contain no endorsements or provisions limiting coverage for (I) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement.
(v) The policy shall give City, its elected and appointed officials, officers, employees, agents, and City-designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.

The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured. 4 C. Automobile Liability
At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City.
(ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
(ill) The policy shall give City, its elected and appointed officials, officers, employees, agents and City designated volunteers additional insured status. (iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention.
d. Workers' Compensation/Employer's Liability
Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.

To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the "Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer's Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers' compensation coverage of the same type and limits as specified in this section.
e. Professional Liability (Errors and Omissions)
At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect 5 f. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:

Combined Single Limit
Commercial General Liability $1,000,000 per occurrence / $2,000,000 aggregate for bodily injury, personal injury, and property
damage
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage
Employer's Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and omissions)
(ii) Defense costs shall be payable in addition to the limits.

Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. g. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer's equivalent) signed by the insurer's representative and Certificate of Insurance (Acord Form 25- S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
h. Policy Provisions Required
Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of the premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration. (ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant's policy is primary insurance and that any 6 insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss.
(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(IV) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to provide waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.

Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant's indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
i. Qualifying Insurers
(i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements:

Each such policy shall be from a company or companies
with a current A.M. Best's rating of no less than A: VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
j. Additional Insurance Provisions
The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including, but not limited to, the If at any time during the life of the Agreement, any policy of 7 will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.

The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (IV) Neither the City nor the City Council, nor any member of the City Council, nor any of the officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement. k. Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.

17. Indemnification.

To the fullest extent permitted by law, Consultant shall defend (with counsel reasonably approved by the City, indemnify and hold the City, its elected and appointed officials, officers, employees, agents, and authorized volunteers free and harmless from any and all claims, demands, causes of action, suits, actions, proceedings, costs, expenses, liability, judgments, awards, decrees, settlements, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, (collectively, "Claims") in any manner arising out DI, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's services, the Project, or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorneys' fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to Claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, the City Council, members of the City Council, its employees, or authorized volunteers.
b. Additional Indemnity Obligations. Consultant shall defend, with counsel of City's choosing and at Consultant's own cost, expense and risk, any and all Claims covered by this section that may be brought or instituted against the City, its elected and appointed officials, employees, agents, or authorized volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against the City, its elected and appointed officials, employees, agents, or authorized volunteers as part of any such claim, suit, action or other proceeding. Consultant shall also reimburse City for the cost of any settlement paid by the City, its elected and appointed officials, employees, agents, or authorized volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for the City's attorney's fees and costs, including expert witness fees. Consultant shall reimburse the 8 City, its elected and appointed officials, employees, agents, or authorized volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its elected and appointed officials, employees, agents, or authorized volunteers.

18. California Labor Code Requirements. Consultant is aware of the requirements of California Labor Code Sections 1720 et seg. and 1770 et seg., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Consultant agrees to fully comply with such Prevailing Wage Laws, if applicable. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages, employment of apprentices, hours of labor and debarment of contractors and subcontractors.

If the Services are being performed as part of an applicable "public works" or "maintenance" project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such Services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. This Project may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant's sole responsibility to comply with all applicable registration and labor compliance requirements.

19. Verification of Employment Eligibility. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same.

20. Laws and Venue. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state, or federal court situated in the County of San Bernardino, State of California.

21. Termination or Abandonment
a. City has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days' written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been 9 received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by City and Consultant of the portion of such task completed but not paid prior to said termination. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days' written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant.

22. with this Agreement, the prevailing Party shall be entitled to recover from the opposing Party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing Party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions, or provisions hereof. The costs, salary, and expenses of the City Attorney's Office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this Agreement.

Responsibility for Errors. Consultant shall be responsible for its work and results under this Agreement. Consultant, when requested, shall furnish clarification and/or explanation as may be required by the City's representative, regarding any services rendered under this Agreement at no additional cost to City. In the event that an error or omission attributable to Consultant's professional services occurs, Consultant shall, at no cost to City, provide all other services necessary to rectify and correct the matter to the sole satisfaction of the City and to Prohibited Employment. Consultant shall not employ any current employee of City to perform the work under this Agreement while this Agreement is in effect.

Costs. Each Party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein.

Documents. Except as otherwise provided in "Termination or Abandonment," above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to and become the property of the City.

27. Organization. Consultant shall assign David McPherson as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City.

28. Limitation of Agreement. This Agreement is limited to and includes only the work included in the Project described above.

29. Notice. Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, 10 certified mail, return receipt requested, postage prepaid, addressed to the following addresses and shall be effective upon receipt thereof:

CITY: CONSULTANT:

City of San Bernardino SCI Consulting Group
Vanir Tower, 290 North D Street John Bliss
San Bernardino, CA 92401 4745 Mangels Blvd.

Attn: City Manager Fairfield, CA 94534
With Copy To:

City of San Bernardino
Community & Economic Development
201 North E Street, 3"d Floor
San Bernardino, CA 92401
Attn: Michael Huntley
Third Party Rights. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant.

Equal Opportunity Employment. • Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.

Entire Agreement. This Agreement, including Exhibit "A," represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each Party acknowledges that no representations, inducements, promises, or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This is an integrated Agreement.

Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect.

Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each Party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void. 11 Non-Waiver. The delay or failure of either Party at any time to require authorized representative of the Party against whom enforcement of a waiver is sought. The waiver of any right or remedy with respect to any occurrence or event shall not be deemed a waiver of any right or remedy with respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver.

36. Time of Essence. Time is of the essence for each and every provision of this Agreement.

Headings. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain, or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.

Amendments. Only a writing executed by all of the Parties hereto or their respective successors and assigns may amend this Agreement. 39 City's Right to Employ Other Consultants. City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects.

Prohibited Interests. Consultant maintains and warrants that it has neither employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability.

For the term of this Agreement, no official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

41. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one single Agreement.

42. Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said Parties and that by doing so, the Parties hereto are formally bound to the provisions of this Agreement. [SIGNATURES ON FOLLOWING PAGE]
12 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF SAN BERNARDINO

AND SCI CONSULTING GROUP
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

CITY OF SAN BERNARDINO SCI CONSULTING GROUP
Approved By:

In ta de I this
Teri Ledoux
City Manager "Nonu lu. Buss
Approved as to Form: Name
AnD Sanz PRESIDENT
Gary D. Saenz Title
City Attorney
enver che
for Georgeann Hanna, MMC
City Clerk
13 EXHIBIT A
14 PROPOSAL FOR THE

CITY OF SAN BERNARDINO

TO PROVIDE

CANNABIS MONITORING AND FINANCIAL AUDIT

SERVICES
JULY 17,2019
SUBMITTED BY:

SCIConsultingGroup
4745 MANGELS BOULEVARD
FAIRFIELD, CaLifornia 94534
PHONE 707.430.4300
FAX 707.430.4319
www.sci-cg.com

PUN GROUP

ACCOUNTANTO & MSVIEONS
200 C. SANDPOINT AVE., SUITE 600
SANTA ANA, CA 92707
PHONE 949.777.8801
FAX 949.777.8850
www.pungroup.com
impli
455 SHERMAN ST., SUITE 510
DENVER, CO 80203
PHONE 877.464.8398
www.simplifya.com
(This page intentionally left blank.)
SCIConsultingGroup
Public Finance Consulting Services
A. COVER LETTER
July 17, 2019
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Re: Cannabis Monitoring and Financial Audit Services, RFP No. F-19-53 Dear Purchasing Agent:

SCIConsultingGroup ('SCI"), The Pun Group LLP, and Simplifya (collectively known as the "SCI Team") are pleased to submit this proposal for cannabis-related services to the City of San Bernardino ('City") in response to its Request for Proposal for Cannabis Monitoring and Financial Audit Services. The SCI Team has reviewed the REP and relevant information fully, and proposes to comprehensively provide all the services described in the Scope of Work.

PROJECT UNDERSTANDING We understand that at the November 2018 election, Ordinance MC-1503 (Measure X) and a Cannabis Tax Measure (Measure W) were approved by San Bernardino City voters, and accordingly, the City has been working to develop discretionary processes and administrative procedures, including monitoring and compliance oversight activities. The City seeks to engage a consulting team to provide cannabis -related services, including:

1. Facilitate yearly financial audits ensuring compliance with applicable laws

2. Monitor Compliance with City Ordinance, and State and Local Laws through Inspections

3. Background Checks

4. Plan Review Services
THE SCI TEAM Simply put, SCI will provide on-site inspections and monitor compliance with local and state laws, perform background checks and plan review; the Pun Group will facilitate annual financial audits and Simplifya will provide cloud-based, cannabis-related compliance tools.

CANNABIS SERVICE EXPERIENCE AND PHILOSOPHY SCI is widely recognized as one of the top local cannabis implementation consulting firms in California. SCI provides cannabis-related advice and broad consulting services to a variety of public agencies in California including community support analysis, ordinance development, fee studies, taxation, implementation, application process development, application review and scoring, monitoring and compliance inspections, business tax auditing, and community outreach.

SCI Consulting Group | 4745 Mangels 8lvd. | Fairfield, California 94534 | (707) 430-4300 | www.sci-cg.com SCI maintains a network of relationships with government agencies and cannabis-related industry leaders, including attorneys, testing laboratories, cultivators, nursery owners, and retailers so we can provide expertise on all elements of the cannabis industry. SCI staff trains at the nation's premier cannabis educational entity, Oaksterdam University in Oakland, and gathers lessons learned and best practices regarding cannabis operations throughout the United States.

We are currently under contract to provide cannabis-related monitoring and auditing services to:

City of Coalinga City of San Carlos
City of Colfax City of Shasta Lake
City of Dunsmuir City of Woodlake
UNIQUE CANNABIS SERVICE PHILOSOPHY Our core philosophy and approach towards the implementation of local cannabis policy has been described as more broadly balanced than that of our competitors. Our philosophy is based upon our genesis as a solution-based engineering firm that has evolved and developed in-house expertise in public policy and community outreach. Although our quantitative and regulatory rigor and attention to detail are unsurpassed, we balance this with realistic approaches to real world challenge, fully understanding and supporting the City's challenging transition into a regulated and legal cannabis marketplace. Hence, SCI balances enforcement of local and state code along with the need to support viable cannabis businesses and to shepherd non-compliant businesses into the safe and regulated environment.

We have reviewed Attachment "Exhibit A Sample Agreement" and will sign it without modification. The proposal fee is valid for 180 days. We look forward to this opportunity in assisting the City of San Bernardino with this important project and stand ready to proceed. If you have any questions or require additional information, please do not hesitate to contact me.

I can be reached at (707) 430-4300 or via email at [email protected].

Sincerely,
John Bliss, P.E.

President
CITY OF SAN BERNARDINO PAGE 2 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019

TABLE OF CONTENTS
B. Background and Project Summary ... Page 4
C. Methodology.. Page 5
D. Staffing ... Page 9
E. Qualifications. Page 11
F. Fee Proposal Page 13
G. Insurance. Page 15
H. Litigation.............. Page 16
Other Information............. Page 16
J. Appendices...... Page 18
CITY OF SAN BERNARDINO PAGE 3 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 B. BACKGROUND AND PROJECT SUMMARY

PROJECT UNDERSTANDING
We understand that at the November 2018 election, Ordinance MC-1503 (Measure X) and a Cannabis Tax Measure (Measure W) were approved by San Bernardino City voters, and accordingly, the City has been working to develop discretionary processes and administrative procedures, including monitoring and compliance oversight activities.

The City seeks to engage a consulting team to provide cannabis-related monitoring compliance services, including:

1. Facilitate annual financial audits ensuring compliance with applicable

2. Provide technical and policy expertise and cannabis compliance

3. Monitor compliance with City Ordinance, and State and Local laws through onsite facility inspections for each cannabis business

4. Provide plan check services

5. Conduct background checks
KNOWLEDGE OF SAN BERNARDINO CoUnTY We have worked extensively throughout San Bernardino County and are providing, or have provided, consulting and engineering services to many public agencies in San Bernardino County including:

City of Colton West Valley Mosquito & Vector Control District San Bernardino County Fire District CalFire
Similarly, the Pun Group is reputable for its government and nonprofit practice in California. We currently provide professional services for cities such as Bell, Cerritos, Culver City, Gardena, Huntington Park, Industry, Lakewood, Monterey, Pomona, San Bernardino, Stockton and several other cities. Accordingly, we have a deep understanding of the current demographic and the economic environment, and the local laws and regulations.

KNOWLEDGE OF THE CITY OF SAN BERNARDINO The Pun Group is currently the Auditor for the City of San Bernardino. (Please refer to "I. Other Information" for additional content on this We believe our expert knowledge of the cannabis industry, coupled with our broad experience providing municipalities with regulation, revenue and administration consulting services, will serve the City well. We have also proposed an additional optional task, "Provide On-going Non-Compliant Businesses Mitigation Services" which is described in Section I.

CITY OF SAN BERNARDINO PAGE 4 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 C. METHODOLOGY

PROJECT MANAGEMENT
The SCI Team will conduct a project kick-off meeting with City staff to establish project priorities and goals, communication protocols and timelines. Further, the SCI Team will gather and review all applicable information needed to perform the required tasks. The Cl Team will work with City staff to develop detailed processes including checklists 'eports and other documentation. The SCI Team is well-experienced drafting decisior documents including administrative decisions and staff reports/resolutions for public hearings, as well as presenting at public hearings, and will perform the following tasks:

1. Financial Audits: Conduct Annual Audits; Confirm Sales and Inventory Compliance; and Ensure Vendor Compliance with Business Tax Reporting, including Tax Returns
The SCI Team, led by the Pun Group for these tasks, will provide comprehensive annual cannabis audit and tax verification services, including documentation and reporting, in order to ensure that the City receives full payment of all local cannabis-related taxes, including Measure W taxes, and ensuring compliance with applicable laws.

The desired services to be performed for each legally operated cannabis facility in the City include but are not limited to:
• Review cannabis business tax returns submitted by the business and collected by the City and compare to each business's records for the time period identified by the City to determine:
• Mathematical accuracy and timeliness of gross receipts returns filed with the City:
• Trace and verify the gross receipts reported on the
quarterly gross receipts returns prepared by the business to gross receipts recorded in the business's accounting records to verify that these were in accordance with the City's regulations;
• Verify compliance with San Bernardino Municipal Code. • Reasonableness of reported revenues of the cannabis businesses by performing additional procedures necessary to reach a conclusion.

Evaluate consistency between gross receipts and other information reported on financial statements to what was reported to the California Department of Tax and Fee Administration for sales and use tax, cannabis excise tax, and/or cultivation tax. In addition, evaluate consistency CITY OF SAN BERNARDINO PAGE 5 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 between gross receipts reported on financial statements to gross receipts reported to the City.
• The auditor shall have access to examine any of the following records or books, whenever necessary, to ascertain the amount of any tax due, as required by San Bernardino Municipal Code.
• Any point of sale (POS) inventory control and reporting system with the following capabilities:

Accurately documents the present location, amounts, and descriptions of all cannabis goods for all stages of the growing, production, manufacturing, laboratory testing, distribution processes, sale, transfer, purchase, receipt, and delivery of cannabis goods, where applicable;
Produces electronic shipping manifests, tracks all cannabis inventory in possession of the cannabis business,
promptly identifies any discrepancy in the stock, and
tracks cannabis from the customer back to its source;
• Produces historical transactional data for review by the City.

Legible, clear, adequate, and accurate books, records, and documentation maintained on the premises for a minimum of seven years, that demonstrates that all cannabis goods have been obtained from, and are provided to, other licensed cannabis businesses, and that details all the revenues and expenses, and assets and liabilities of the business.
• A complete set of books of account, invoices, copies of orders and sales, shipping instructions, bills of lading, weigh bills, bank statements including cancelled checks and deposit slips and all other records necessary to show fully the business transactions of the cannabis business.

Provide subject matter expertise and assistance to City staff regarding interpretations of the San Bernardino Municipal Code and assist with questions that may arise from the imposition of business license taxes. • Following the completion of a business license tax audit of each cannabis facility, the auditor shall issue all reports to the City, in accordance with applicable standards from generally accepted auditing standards (GAAS).

CITY OF SAN BERNARDINO PAGE 6 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 • The auditor's report for each cannabis business license tax audit shall, at a minimum, include the following information:
• Overall conclusion of whether or not the cannabis business paid all required business license taxes and fees for the time period specified. If the auditor determines that a business has remitted the incorrect business license tax amount to the City, the auditor shall calculate the amount of the under/over payment and any applicable penalties pursuant to San Bernardino Municipal Code and include the amounts with the report. The calculation shall be supported by documents obtained during the audit that will allow the City to initiate collection actions against, or provide tax refunds for, cannabis businesses.
• Any exceptions, errors, or areas of noncompliance that were identified as a result of the procedures performed. This includes any significant deficiency in the design or operation of the internal control structure, including but not limited to the following areas: cash handling, inventory control, point of sale systems, and any other areas that the auditor deems necessary for purposes of accurately reporting business license taxes due to the Express an opinion regarding the taxes remitted to the City by the cannabis business, or state that an opinion cannot be expressed in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report.
• Cannabis businesses will be provided the opportunity to challenge audit findings by the City through a formal appeal process, pursuant to San Bernardino Municipal Code. On a case by case basis, the City may require the auditor to defend a determination of under reporting or under payment of taxes or other non-compliance during administrative hearings or other forums of appeal. Whenever the City deems it necessary, the auditor shall attend administrative hearings or othe forums of appeal when defending a determination of under reporting o under payment of taxes or other non-compliance.

2. Technical and Policy Expertise and Cannabis Compliance The SCI Team will provide the City with ongoing technical and cannabis policy expertise. The SC! team will monitor the evolving State regulations and provide policy updates and industry best practices to the City and cannabis businesses to ensure continued compliance with State and local law.

CITY OF SAN BERNARDINO PAGE 7 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsulting Group, the Pun Group and Simplifya, July 2019

3. Onsite Facility Inspections
SCI will provide comprehensive on-site facility inspections for each commercial cannabis business and report to the City the results of inspections relative to the level of Health and Safety regulations consistent with City's local regulations and ordinances, staff-directed priorities and preferences, and State regulations. SCI monitoring and compliance efforts will satisfy the most rigorous requirements and at the same time, provide a successful platform for the cannabis business owner. SCI will provide the City with a written report detailing the results of the on-site inspection. SCI will provide follow-up support to the City and cannabis businesses to provide recommendations to address and correct any deficiencies.

Among the elements and activities SCI will monitor are:
• Product: Inventory management, seed-to-sale tracking, packaging and labeling verification, product testing protocols, etc.
• Record Retention: Review and confirm employee records, business records, tax information records, transportation manifests, video surveillance retention, equipment certifications, training programs and safety programs.
• Security and Surveillance: Verify video surveillance equipment, camera placement, alarm systems, locks, facility access control, security guards, occupational badges, and other security and safety processes. • Facility Compliance: Verify facility's operational compliance including waste management, odor control, pesticide and solvent storage, signage, cash handling procedures, product shipment/receival procedures, etc.
• Video Monitoring (optional): Monitor facilities remotely through video surveillance monitoring.

Deliverables:
• Conduct onsite facility inspections
• Provide written report detailing the findings of inspections • Provide follow-up support and recommendations
• Conduct remote video monitoring (optional)
If conducting annual inspections, the inspections will take place mid-year for each cannabis facility. If additional inspections are requested, they will be scheduled proportionately throughout the year.

4. Plan Check Services
The SCI Team will perform Plan Check reviews as a part of Applicant Tenant Improvement Submittals and make recommendations as needed to comply with local and State laws and regulations.

CITY OF SAN BERNARDINO PAGE 8 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 Timeline:

Plan checks will be completed as needed within two weeks of receiving the documentation.

Deliverables:
• Plan check services as needed, including reporting

5. Background Checks
The SCI Team will conduct background checks for the primary business owners and partners that are listed on the application and on an as needed basis for employees working at the business.

Timeline:

Plan checks will be completed as needed within a month of receiving the request.

Deliverables:
• Conduct Background Checks
D. STAFFING
If selected for this project, Kyle Tankard, Senior Consultant and Cannabis Business Leader at SCI, will serve as the project leader and day-to-day project manager for the SCI portion of the work including inspections and monitoring, plan checks and background checks. Chris Coulter and John Bliss will support Kyle's efforts. Ken Pun, of the Pun Group, will lead the financial audit work with support from Vanessa Burke. John Vardaman, of Simplifya, will ensure the auditing and inspection tools are efficient and effective.

PROJECT TEAM

KYLE TANKARD, CANNABIS CONSULTANT SCI
Kyle Tankard contributes experience in local cannabis policy, as well as local funding measure formation, feasibility and financial analysis services for public, private and non-profit sector organizations. Mr. Tankard has assisted municipalities with local cannabis implementation including taxation and cost recovery, health and safety regulations, and monitoring and compliance of cannabis in California. His expertise extends to include public opinion research projects, media and community educational outreach, data analysis and GIS mapping and database management. Mr. Tankard graduated from the University of California, Santa Cruz with a Bachelor of Arts in Environmental Studies with an emphasis on geographic information systems (GIS).

CHRIS COULTER, CANNABIS CONSULTANT SCI
Chris Coulter contributes experience in local cannabis policy, funding measure feasibility, data analysis, and financial analysis services for public, private and non-profit sector organizations to the SCI Team. Mr. Coulter specializes in rate study analysis and Proposition 218 formation of benefit assessment districts, community facility districts and tax rate structures. In addition, he is experienced in spatial and regional analysis, opinion research, public outreach, demographic CITY OF SAN BERNARDINO PAGE 9 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 studies and ballot measure development. Mr. Coulter is a graduate of the University of California at Berkeley with a Bachelor of Arts degree in English Literature.

JOHN BLISS, M.ENG., P.E., PRESIDENT SCI
John Bliss, a professional engineer and President of the SCI Team, specializes in special tax consulting, assessment engineering, special and general benefit analysis, crafting legally compliant, robust engineer's reports, assessment administration, cost estimations and budgeting, database design and implementation, regulatory compliance, and revenue measure formations. He has over 16 years of experience in this field of expertise. Mr. Bliss graduated from Brown University with a bachelor's degree in Engineering and holds a master's degree in Civil Engineering from The University of California, Berkeley, where he was a Regent's Scholar. He is a licensed professional Civil Engineer in the State of California and is a LEED accredited professional.

KENNETH H. PUN, CPA, CGMA THE PUN GROUP
With over nineteen years of public accounting experience in the State and Local Government sector, Mr. Pun is the Managing Partner and an Assurance Partner at the Firm. Mr. Pun specializes in audits and management consulting for governmental organizations and has served as the Contract Deputy Finance Director for the City of San Marino in 2017. Mr. Pun also serves as the Chair of the California Society of CPAs Governmental Auditing Accounting Committee. Mr. Pun will actively act as the Engagement Partner with the assigned task of directly overseeing the Engagement Team, engagement planning and fieldwork, review for quality, and approve work papers and reports. Mr. Pun will be responsible for the timely delivery of the Financial Audit services for the City of San Bernardino.

VANESSA I. BURKE, CPA, CPFO THE PUN GROUP
Vanessa Burke is an Assurance and Consulting Services Partner with 30 years of experience in providing audit and advisory services to local government agencies including cities, public pension plans, community colleges, college foundations, hospitals, school districts, county offices of education, special districts, and joint powers insurance authorities. not-for-profit organizations, and federal and state agencies. Vanessa will act as the Concurring Partner and provide second partner review of significant high-risk areas, audit reports, and in resolution of significant accounting, auditing, and reporting matters.

JOHN W. VARDAMAN, III SIMPLIFYA
John W. Vardaman, Ill is General Counsel and Chief Compliance Officer of Simplifya, a cannabis compliance software company that works with state-legal cannabis companies and financial institutions that serve them. Prior to joining Simplifya, Mr. Vardaman was General Counsel of Hypur, which provides AML/BSA compliance tools for financial institutions serving the cannabis industry.

From 2006 to 2016, Mr. Vardaman worked at the Department of Justice, first in the Office of Legal Policy, and then as Assistant Deputy Chief in the Asset Forfeiture and Money Laundering Section. In 2014, Mr. Vardaman drafted the DOJ policy regarding marijuana banking, known as the Cole Memorandum, which set forth enforcement parameters designed to enable banks to permissibly service marijuana-related businesses.

From 2001 to 2006, Mr. Vardaman served as Special Assistant to the General Counsel at the Department of the Treasury where he worked on a variety of money laundering and terrorist financing issues following the 9/11 terrorist attacks. From 2003-2004, Mr. Vardaman served as CITY OF SAN BERNARDINO PAGE 10 OF 18
PROPOSAL FOR CANNABIS MONITORINg AN FINANCIAL AuDIt SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 Associate General Counsel to the Coalition Provisional Authority in Baghdad, Iraq, where he oversaw an international campaign to locate and repatriate assets of Saddam Hussein and the Iraqi regime held around the world.

Mr. Vardaman was the recipient of the Joint Civilian Service Commendation Award from Department of Defense in 2004, and the Attorney General's Award for Distinguished Service from the Department of Justice in 2015.

Mr. Vardaman received his undergraduate degree from Vanderbilt University in 1993, and his law degree from Georgetown University in 1997.

E. QUALIFICATIONS
Established in 1985, SCI Consulting Group is a recognized public finance and urban economic consulting firm for public, nonprofit and private sector organizations. We leverage our

REFERENCES FOR SCI
Some of SCI's most current and recent similar cannabis-related services were provided to:

City of Coalinga
Cannabis Services: Implementation Planning, Community Outreach and Stakeholder Engagement, Ordinance Review, Regulatory Fees and Monitoring and Compliance
Status: Ongoing monitoring and compliance
Project Start: September 2016
Approx. Budget: $10k-$20k per year
Contact: Sean Brewer, Community Development Director
[email protected]: (559) 935-1533, ext. 124
Key Staff: Arcelia Herrera, Cannabis Consultant
City of Shasta Lake
Cannabis Services: Implementation Planning, Community Outreach and Stakeholder Status:

Project Start:

Approx. Budget: $15k-$30k per year
Contact: John Duckett, City Manager
[email protected]; (530) 275-7427
Key Staff: Kyle Tankard, Cannabis Consultant
CITY OF SAN BERNARDINO PAGE 11 OF 18
City of Colfax
Cannabis Services: Application Review, Monitoring and Compliance Inspections and inancial Audit
Status: naoing
Project Start: February 2019
Approx. Budget: $60k
Contact: Wes Heathcock, City Manager
[email protected]: (530) 346-2313
Key Staff: Kyle Tankard, Cannabis Consultant
City of Woodlake
Cannabis Services: Ordinance Development and Review, Application Process and Fees, Regulatory Fees and Monitoring and Compliance
Status: Seplember 20itoring and compliance
Project Start:

Approx. Budget: SSSon ters, Community Development Director Contact:
[email protected]: (559) 564-8055
Key Staff: Arcelia Herrera, Cannabis Consultant
City of West Hollywood
Cannabis Services: Application Process, Scoring Methodology, and Application Review
Status: Ongoing
Project Start: June 2018
Approx. Budget: $100k
Contact: John Leonard, Community and Legislative Affairs Manager [email protected]: (323) 848-6446
Key Staff: Chris Coulter, Cannabis Consultant
Since 2016, SCI has been widely recognized as one of the top local cannabis implementation consulting firms in California. Additional clients for cannabis projects include:

City of Avalon City of San Carlos
City of Alameda City of Santa Ana
City of Davis City of Vallejo
City of Encinitas City of Yreka
City of Goleta County of Alameda
City of La Mesa County of San Luis Obispo
City of Lompoc County of Tuolumne
City of Richmond
Aside from our administrative staff, every employee is a database expert. We have developed in house, specialized programs to improve our levy administration services. We are also GIS and mapping experts. We invite you to compare, or better yet, test our database and technical expertise with the staff from any other firm.

CITY OF SAN BERNARDINO PAGE 12 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 The City of San Bernardino filed a petition for Chapter 9 bankruptcy protection with the United States Bankruptcy Court in August 2012, the 3rd largest municipal bankruptcy at the time. As of June 15, 2017, the City is officially out of bankruptcy. However, the City projected a structural deficit of approximately $1.2 million (revenues were $2 million below projections; utility users tax revenue was overestimated by $1.5 million; water fund revenue was $674,000 under the adopted budget amount; and there was a substantial deficit in the gas fund) for the fiscal year 2019/2020.

A marijuana business tax was approved by the voters on November 6, 2018, approved an ordinance imposing a Cannabis Business Tax of up to $10 per square foot for cultivators and up to 6% of gross receipts on other businesses operating in the City of San Bernardino, estimated to initially raise between $810,000 to $2,475,000 annually.

With the superb services provided, the City of San Bernardino engaged The Pun Group to provide audit service for the years ended June 30, 2014, through 2017 due to the early termination of the contract from its predecessor firm.

Fiscal Stability Statement
SCI has been successfully and profitable in business for over 34 years, with sustained growth and has yet to implement a reduction in force plan. Tax returns can be made available upon request.

F. FEE PROPOSAL
In consideration for the work accomplished, as outlined in this proposal, SCI shall be compensated as detailed below:

Annual Financial Audits $ 6,500-$10,000 per audit
Technical and Policy Expertise and No additional charge Cannabis Compliance
*Periodic Facility and Operations Inspections $ 2,500 per inspection Plan Check $ 200 per hour
Background Check $ 600 per check
**On-going Non-Compliant Mitigation Services $ 6,000 per year (All costs associated with this task to be fully reimbursed to City through regulatory fees; *costs for video monitoring available upon request; **can be fully reimbursed to the City through cannabis fees/taxes)
Hourly rates are shown in the table below:

CITY OF SAN BERNARDINO PAGE 13 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 SCI Staff Hourly Rate
John Bliss, President $ 250
Kyle Tankard, Cannabis Consultant $ 200
Chris Coulter, Cannabis Consultant $ 200
Support Staff $ 65
The Pun Group Staff Hourly Rate
Ken Pun, Managing Partner $ 250
Vanessa Burke, Partner $ 250
Incidental costs incurred by for the purchase of travel and other out-of-pocket expenses will be reimbursed at actual cost, with the total not to exceed $5,000 without prior authorization from the City.

CITY OF SAN BERNARDINO PAGE 14 OF 18
PROPOSAL FOR CannaBis MonItoRIng AN FinAnCIAL AUDIT SERVICeS By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 G. INSURANCE
SCI has reviewed the insurance requirements as described in "Exhibit A" and can fully comply.

ACORD DATE (MADDIYYYY)

CERTIFICATE OF LIABILITY INSURANCE
4/24/2019
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 INSURERS), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

MPORTANT: It the certificate holder is an ADDITONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

I 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 tighte to the certificate holder in lleu of such endorsements).

PRODUCER HOW CY
Arthur J. Gallagher & Co.

PHONE іe. Erg. 925-298-1112 125, No): 925-200-0328
Insurance Brokers of CA. Inc, LIC # 0726293
3697 Mt. Diablo Bivd, Suite 300 ApREss jame [email protected] Lafayette CA 94549 INSURERIS AFFORDING COVERAGE NAIC B
INSURERA: Sentinel Insurance Company Ltd 11000

INSURED SCIONS DI
SCI Consulting Group MISURER 8: Gamini Insurance Company 10833 Consequence Properties INSURER C: Markel insurance Compary.. 1745 Mangels Boulevard NSURERO.._.

Fairfield CA 94534-4319 INSURER E

INSURER F
COVERAGES CERTIFICATE NUMBER: 1113337489 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 HALE BEEN REDUCED BY PAID CLAIMS DAUDLSUBR.. POLICY ERE

TYPE OF INSURANCE INSO WYR POLICY NUMBER LIMITS
X I COMMERCIAL GENERAL LIABILITY 57SBARHB313 4:20/2019 4:20:2020 EACH OCCURRENCE 52.000,000

TO RENTEO
$ 1.000,000
MED EXP (Asty tree tersore 510,000
:53.000,000
GENT AGGREGATE LANI APPLES FER GENERAL A GREGATE 54.000,000 PEST FRODUCTS CORD AN ASS $ 4.000,000
57SBARH8313 1:20/2019 4/20:2020 $2.000.000

ANY ALIC
ALITOS

PETERYTARSE

AMOSIMY
57SBARH9313 4:20:2019 4:20:2020 ¡EAT-OCCURRENCE 51.000,000 X. CLAMS AALE ALL GATE. $ 1 000.000

GECI RETENTIONS
WORKERS COMPENSATION #WC000353309 4:20:2019 4:20:2020 * HATE !

AND EMPLOYERS LIABILITY YIN
ANTROPMIETOR PARTNER EXECAME LEE EACNALCIOENT $1.000.000

OFFICER ALREA
LEL TASEASE EAFMFLOVEE 51 000.000
READDRATE AS ONE EL LISEASE POLICY LASHT IS 1.000.000
VCPL06S685 12:172018 $2,000,000
11217219
vidence of Coverage On

CERTIFICATE HOLDER CANCELLATION

THE EXPIRATION DATE THEREOR SHE LAAD DATE TOE, NOTICE RE CANOELAREDO TE Bidding & Presentation Only ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATNE
fou Salises
© 1988-2015 ACORD CORPORATION. All rights reserved.

ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD CITY OF SAN BERNARDINO PAGE 15 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 H. LITIGATION
The SCI Team has no claims filed by or against our team over the last five years.

I. OTHER INFORMATION
Demonstration of Record of Staffing Tasks Efficiently and Completing Projects on Time and Within the Allocated Budget (SCI Consulting Group)
Low Overhead/Low Cost Provider
We understand levy administration services must be provided cost effectively, particularly to reep the City's costs within budget constraints. For this reason, we maintain the lowes overhead and leanest structure in the industry. While other firms maintain multiple offices hierarchical administration and much higher overhead costs, we operate more effectively and with much lower overhead out of one central office located in an economically favorable business area.

Unmatched Responsiveness and Customer Service
SCI invites you to call our toll-free property owner assistance line at (800) 273-5167 and compare our level of service and responsiveness with any other firm. We answer calls directly with knowledgeable levy administration staff. We also provide the highest level of customer service and responsiveness for all our clients, including responding to all of our clients within the same day.

Demonstration of Record of Staffing Tasks Efficiently and Completing Projects on Time and Within the Allocated Budget (The Pun Group)
Our Commitment to Quality
The Pun Group is committed to providing piece of mind to our clients by providing the highest quality of protessional services. The Firm is a member of the AICPA Governmental Audit Quality Center and has demonstrated our commitment to audit quality, including those performed under Government Auditing Standards and the Uniform Guidance. In addition, we are a recipient of the Single Audit Resource Center's Award for Excellence for 2017. This award is based on the positive feedback results from our clients in an independent survey, demonstrating our Firm's highest commitment to quality and client satisfaction. To further enhance our performance and quality, the Firm continually invests substantial resources in human capital and technology, incorporating the use of Artificial Intelligence technology into our audit process.

Recognized Leader in the Governmental Industry
The Pun Group is a proven leader in professional services to the government sector. Currently, The Pun Group is the firm of choice for 40 cities, 45 special districts, 5 transportation agencies, and 10 medical centers throughout California. Since 2012, both bankrupted cities, Stockton and San Bernardino, selected The Pun Group as their primary auditor because we had the capacity, knowledge, and experience to assist them in auditing their complicated transactions.

CITY OF SAN BERNARDINO PAGE 16 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 As a result, our engagement team was able to catch up and complete their long overdue audits within a short timeframe. We would credit part of our success to our professional's participation with various professional organizations, bringing to our clients unparalleled knowledge of regulatory agencies and standard setters such as AICPA, FASB, GASB, GAO, ASCPA, CaICPA, GFOA, League of California Cities, among many others. Such experience is critical to address emerging accounting and auditing issues within the government environment.

The Pun Group and all key engagement team members are licensed by the State of California to practice as Certified Public Accountants, and meet the Continuing Professional Education requirements under U.S. GAO's Government Auditing Standards to perform the proposed Description of Community Involvement
At SCl, we are proud to actively participate and provide support to our local community. We show our corporate responsibility in various ways, including the following:
• Annual monetary donations to over two dozen nonprofit entities • Membership in the local Chamber of Commerce
• Employee volunteer days during which we participate in projects for Habitat for Humanity, the local food bank, and other charitable organizations • Energy Star recipient for an energy efficient office
In 2005, SCI Consulting Group established the "Joseph Shilts Memorial Scholarship" in honor of our founder Joseph Shilts. This scholarship is awarded annually to a number of graduating high school students in our local community who have applied, interviewed, and will be studying engineering in college.

Description of Previous Involvement with the City
The Pun Group is currently the Auditor for the City of San Bernardino. The City of San Bernardino filed a petition for Chapter 9 bankruptcy protection with the United States Bankruptcy Court in August 2012, the 3rd largest municipal bankruptcy at the time. With the superb services provided, the City of San Bernardino engaged the Firm to provide audit service for the years ended June 30, 2014, through 2017 due to the early termination of the contract from its predecessor firm. Mr. Kenneth H. Pun has been assigned as the engagement partner who facilitated the audit process since then. The engagement team has successfully completed the audits and issued the audit reports for the years ended June 30, 2014 and 2015 within the one-year timeframe.

Conflict of Interest Statement
The SCI Team has no known past, ongoing or potential conflicts of interest for working with the City, performing the Scope of Work or any other service for this Project.

Additional Information
Employment Policies
The SCI Team does not and shall not discriminate against any employee in the workplace or against any applicant for such employment or against any other person because of race, CITY OF SAN BERNARDINO PAGE 17 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 religion, sex, color, national origin, handicap, or age or any other arbitrary basis. The SCI Team ensures compliance with all civil rights laws and other related statutes.

Additional Scope of Work
In the event the City elects to request optional, additive scope of work, the SC! Team will work with the City to negotiate compensation for these additional tasks and execute an Addendum to the agreement for these additional services.

Responsibilities of City
The SCI Team will make every effort to minimize the workload on the City, but may need assistance, iteratively, with project overview and history, scheduling and budgeting.

Coordination With City
The SCI Team will coordinate services with City staff through frequent and concise communications including face-to-face meetings, telephone calls and e-mail.

J. APPENDICES
Optional Proposed Scope: Provide On-Going Non-Compliant Businesses Mitigation Services
The mitigation of non-compliant businesses is one of the more challenging aspects of any commercial cannabis implementation, and is essential to the long term success for any commercial cannabis compliance business environment. Although, code compliance and law enforcement are the most critical elements of efforts to address non-compliant businesses, other mitigation services can be very effective, save costs and reduce community disruptions.

The SCI Team will work closely with the City including code compliance, law enforcement, legal, finance and others, to develop and implement a Non-Compliant Business Mitigation Policy.

Most likely the policy will include strategies and processes to communicate with and educate non-complaint businesses with the goal to affirmatively and safely shepherd them into compliance.

Deliverables:
• Develop and implement Non-Complaint Businesses Mitigation Policy • Establish, maintain and report on third-party anonymous tip-line (website, phone line, etc.)
• Provide monthly non-compliant activity reports
• Conduct individual and workshop support to Non-Compliant Businesses CITYOF SAN BERNARDINO PAGE 18 OF 18

PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 SCIConsultingGroup
Public Finance Consulting Services

AMMENDED FEE PROPOSAL
In consideration for the work accomplished, as outlined in this proposal, SCI shall be compensated as detailed below:

Technical and Policy Expertise and No additional charge Cannabis Compliance
Annual Financial Audits $ 5,000 per business
*Annual Facility and Operations Inspections $ 2,500 per business Plan Check $ 500 per business
(Estimated 2.5 hours)
Total Annual Fee $ 8,000 per business
Background Check $ 600 per check
**OPTIONAL: On-going Non-Compliant Mitigation Services $ 6,000 per year (All costs associated with this task to be fully reimbursed to City through regulatory fees; *costs for video monitoring available upon request; **can be fully reimbursed to the City through cannabis taxes)
Hourly rates are shown in the table below:

SCI Staff Hourly Rate
John Bliss, President $ 250
Kyle Tankard, Cannabis Consultant $ 200
Chris Coulter, Cannabis Consultant $ 200
Support Staff $ 65
The Pun Group Staff Hourly Rate
Ken Pun, Managing Partner $ 250
Vanessa Burke, Partner $ 250
Incidental costs incurred by for the purchase of travel and other out-of-pocket expenses will be reimbursed at actual cost, with the total not to exceed $5,000 without prior authorization from the City.

SCI Consulting Group | 4745 Mangels Bivd, | Fairfield, California 94534 | (707) 430-4300 | www.sci-cg.com SCIConsultingGroup
Public Finance Consulting Services

AMMENDED FEE PROPOSAL
In consideration for the work accomplished, as outlined in this proposal, SCI shall be compensated as detailed below:

SCI Staff Hourly Rate
John Bliss, President $ 250
Kyle Tankard, Cannabis Consultant $ 200
Chris Coulter, Cannabis Consultant $ 200
Support Staff $ 65
The Pun Group Staff Hourly Rate
Ken Pun, Managing Partner $250
Vanessa Burke, Partner $250
Incidental costs incurred by for the purchase of travel and other out-of-pocket expenses will be reimbursed at actual cost, with the total not to exceed $5,000 per year without prior authorization from the City.

SCI Consulting Group | 4745 Mangels Blvd. | Fairfield, California 94534 | (707) 430-4300 | www.sci-cg.com W-9 Request for Taxpayer Give Form to the
Form
(Rev. October 2018) Identification Number and Certification requester. Do not Department of the Treasury send to the IRS.

Internal Revenue Service • Go to www.irs.gov/FormW9 for instructions and the latest information. 1 Name (as shown on your income tax retum). Name is required on this line; do not leave this line blank.

SCI Consulting Group
2 Business name/disregarded entity name, if different from above 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes. a Famentes, noting apply one
nstructions on page 3
Individual/sole proprietor or C Corporation 7 s Corporation Partnership / Trust/estate single-member LLC Exempt payee code (if any)
Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) Print or type.

Other (see instructions) • (Applies io accounts maintained outsido the u.S.) 5 Address (number, street, and apt, or suite no.) See instructions. Requester's name and address (optional) 4745 Mangels Blvd.
6 City, state, and ZIP code
Fairfield, CA 94534
7 List account number(s) here (optional)
Part l Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid Social security number backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part i, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later. or
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Employer identification number Number To Give the Requester for guidelines on whose number to enter. 9 4 2 9 8 4 5 4 7
Part I/ Certification
Under penalties of perjury, I certify that:

1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

3. I am a U.S. citizen or other U.S. person (defined below); and

4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATA reporting is correct.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part It, later.

Sign Signature of
Here U.S. person • Angula Postalonia Date • 12/5/2019
General Instructions - norm 1099-DIV (diV/dends, Including those from stocks or mutual Section references are to the Internal Revenue Code unless otherwise • Form 1099-MISC (various types of income, prizes, awards, or gross noted.
proceeds)
Future developments. For the latest information about developments • Form 1099-B (stock or mutual fund sales and certain other related to Form W-9 and its instructions, such as legislation enacted transactions by brokers) after they were published, go to www.irs.gov/FormW9.
• Form 1099-S (proceeds from real estate transactions)
Purpose of Form • Form 1099-K (merchant card and third party network transactions) An individual or entity (Form W-9 requester) who is required to file an • Form 1098 (home mortgage Interest), 1098-E (student loan Interest), information return with the IRS must obtain your correct taxpayer 1098-T (tuition) Identification number (TIN) which may be your social security number • Form 1099-C (canceled debt) (SSN), individual taxpayer identification number (ITIN), adoption • Form 1099-A (acquisition or abandonment of secured property) taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other Use Form W-9 only if you are a U.S. person (including a resident amount reportable on an information return. Examples of information alien, to provide your correct TIN. returns include, but are not limited to, the following. If you do not retum Form W-9 to the requester with a TIN, you might • Form 1099-INT (interest earned or paid) be sub/ect to backup withholding. See What is backup withholding, later.

Cat. No. 10231X Form W-9 (Rev. 10-2018)
Cash Receipt Transaction Report
966424 SCI CONSULTING GROUP
Date 01/30/2020 Page # 1
Time 7:40:49AM
Transaction Type - Cash Receipt Sequence 104 Merge Date 01/22/2020 Merge User NATALIE Issue License Yes Entered 01/22/2020 10:21 Enteredby NATALIE Charge Code _Charge Notes. Units Tax Year Amount
575 Business - All Other na 1 2020 $60.00
SB1186 SB1186 na 2020 $4.00
Charge Total $64.00
Payment Type. Payment Number. Payment Notes Amount
WEB CC27735941 $64.00
Total Received $64.00
Business Address Mailing Address
4745 MANGELS BLVD 4745 MANGELS BLVD
FAIRFIELD, CA 94534-4175 FAIRFIELD, CA 94534-4175
I/Arrowhead|psiQuickServe Suite\LicenseTrackIReportsihisropt44.rpt Modification Date-01/30/2020 ACORD® DATE (MM/DD/YYYY)

CERTIFICATE OF LIABILITY INSURANCE
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsements).

Arthur J. Gallagher & Co.

Insurance Brokers of CA. Inc, LIC # 0726293 (A/C. No. Ext): 925-299-1112 FAX, No): 925-299-0328 3697 Mt. Diablo Blvd, Suite 300 ADDRESS: [email protected] Lafayette CA 94549 INSURERS) AFFORDING COVERAGE
INSURER A : Sentinel Insurance Company Ltd 11000
INSURED SCICONS-01 INSURER B: Gemini Insurance Company 10833 SCI Consulting Group
Consequence Properties INSURER C: Markel Insurance Company 38970 4745 Mangels Boulevard INSURER D:

Fairfield CA 94534-4319
INSURER E:

INSURER F:

COVERAGES CERTIFICATE NUMBER: 730659297 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

LTR TYPE OF INSURANCE INSD WVD POLIGY NUMBER LIMITS
X COMMERCIAL GENERAL LIABILITY Y 57SBARH8313 4/20/2019 4/20/2020 EACH OCCURRENCE $2,000,000

DAMAGE TO RENTED
CLAIMS-MADE X OCCUR PREMISES (Ea occurrence) $1,000,000 MED EXP (Any one person) $ 10,000
PERSONAL & ADV INJURY $2,000,000
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $4,000,000 PRO-
X POLICY JECT LOC PRODUCTS - COMP/OP AGG 34.0000
OTHER:

AUTOMOBILE LIABILITY 57SBARH8313 4/20/2019 4/20/2020 COMBINED SINGLE LIMIT $ 2,000,000 (Ea accident
ANY AUTO BODILY INJURY (Per person) $
OWNED SCHEDULED BODILY INJURY (Per accident) 5

AUTOS ONLY AUTOS
X HIRED X NON-OWNED PROPERTY DAMAGE $
AUTOS ONLY AUTOS ONLY (Per accident)
$
UMBRELLA LIAB X OCCUR 57SBARH8313 4/20/2019 4/20/2020 EACH OCCURRENCE $1,000,000 X EXCESS LIAB CLAIMS-MADE AGGREGATE $1,000,000
RETENTION $
WORKERS COMPENSATION MWC000353309 4/20/2019 4/20/2020 X PFATUTE

AND EMPLOYERS' LIABILITY Y/N
ANYPROPRIETOR/PARTNER/EXECUTIVE E.L. EACH ACCIDENT $ 1,000,000 OFFICER/MEMBER EXCLUDED? N/ A
(Mandatory in NH) E.L. DISEASE - EA EMPLOYEE $ 1,000,000 ESCRIPTION OF OPERATIONS belo ELL. DISEASE - POLICY LIMIT $1,000,000 VCPL066081 12/17/2019 12/17/2020 $2,000,00
$2,000,00(
$25,000
Exces Liably everage 15 in excess or General Liabily and Auto Lality Dril, may be attached more space la required) 10 Days Notice of Cancellation

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.

AUTHORIZED REPRESENTATIVE
USA
fin Selising,
© 1988-2015 ACORD CORPORATION. All rights reserved.

ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 04 03 06 (Ed. 04-84)

WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT-CALIFORNIA You must maintain payroll records accurately segregating the remuneration of your employees while engaged in the work described in the Schedule.

The additional premium for this endorsement shall be 5% of the California workers' compensation premium otherwise due on such remuneration.

Work performed by
SCI CONSULTING GROUP (A CORP.) at:
4745 Mangels Blvd
Fairfield, CA 94534-4175
Schedule
$0.00
Any person or organization for whom the Named Insured has agreed by written contract to furnish this waiver.

This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. (The information below is required only when this endorsement is issued subsequent to preparation of the policy.)
Endorsement Effective 04/20/2019 Policy No. MWC0003533-09 Endorsement No.

Insured: SCI CONSULTING GROUP (A Premium (See Attached) CORP.)
Insurance Company: Markel Insurance Company Countersigned by WC040306
© 1998 by the Workers' Compensation Insurance Rating Bureau of Calfornia. Al rights reserved From the WCIRB's California Workers' Compensation Insurance Forms Manual © 2001 20 of 35

SCI CONSULTIING GROUP
Policy #: 57SBARH8313

QUICK REFERENCE

BUSINESS LIABILITY COVERAGE FORM

READ YOUR POLICY CAREFULLY
BUSINESS LIABILITY COVERAGE FORM Beginning on Page
A. COVERAGES
Business Liability 1
Medical Expenses 2
Coverage Extension - Supplementary Payments 2
B. EXCLUSIONS 3
C. WHO IS AN INSURED 10
D. LIABILITY AND MEDICAL EXPENSES
LIMITS OF INSURANCE 14
E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 15

1. Bankruptcy 15

2. Duties In The Event Of Occurrence, Offense, Claim Or Suit 15

3. Financial Responsibility Laws 16

4. Legal Action Against Us

5. Separation Of Insureds

6. Representations 16

7. Other Insurance 16

8. Transfer Of Rights Of Recovery Against Others To Us 17 F. OPTIONAL ADDITIONAL INSURED COVERAGES 18
Additional Insureds 18
G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 20
Form SS 00 08 04 05

BUSINESS LIABILITY COVERAGE FORM
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered.

Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the stock insurance company member of The Hartford providing this insurance.

The word "insured" means any person or organization qualifying as such under Section C. - Who Is An Insured.

Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. - Liability And Medical Expenses Definitions.

A. COVERAGES (a) The "bodily injury" or "property
damage" is caused by an

1. BUSINESS LIABILITY COVERAGE (BODILY
INJURY, PROPERTY DAMAGE, PERSONAL "occurrence" that takes place in the "coverage territory";

AND ADVERTISING INJURY)
Insuring Agreement (b) The "bodily injury" or "property damage" occurs during the policy
a. We will pay those sums that the insured period; and
becomes legally obligated to pay as
(c) Prior to the policy period, no insured
damages because "bodily injury", listed under Paragraph 1. of Section "property damage" or "personal and
C. - Who Is An Insured and no
advertising injury" to which this insurance
"employee" authorized by you to give
applies. We will have the right and duty to or receive notice of an "occurrence" defend the insured against any "suit"
or claim, knew that the "bodily injury"
seeking those damages. However, we will or "property damage" had occurred, have no duty to defend the insured against
in whole or in part. If such a listed
any "suit" seeking damages for "bodily insured or authorized "employee" injury", "property damage" or "personal and knew, prior to the policy period, that advertising injury" to which this insurance the "bodily injury" or "property does not apply. damage" occurred, then
We may, at our discretion, investigate any continuation, change or resumption "occurrence" or offense and settle any claim of such "bodily injury" or "property or "suit" that may result. But: damage" during or after the policy (1) The amount we will pay for damages is period will be deemed to have been limited as described in Section D.- known prior to the policy period.

Liability And Medical Expenses Limits (2) To "personal and advertising injury" Of Insurance; and caused by an offense arising out of your (2) Our right and duty to defend ends when business, but only if the offense was we have used up the applicable limit of committed in the "coverage territory" insurance in the payment of judgments, during the policy period. settlements or medical expenses to which c. "Bodily injury" or "property damage" will be this insurance applies. deemed to have been known to have No other obligation or liability to pay sums or occurred at the earliest time when any perform acts or services is covered unless insured listed under Paragraph 1. of Section explicitly provided for under Coverage C. - Who Is An Insured or any "employee" Extension - Supplementary Payments. authorized by you to give or receive notice b. This insurance applies:
(1) To "bodily injury" and "property (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or
damage" only if:
any other insurer;
Form SS 00 08 04 05 Page 1 of 24
© 2005, The Hartford

BUSINESS LIABILITY COVERAGE FORM
(2) Receives a written or verbal demand or b. We will make these payments regardless of claim for damages because of the "bodily fault. These payments will not exceed the injury" or "property damage"; or applicable limit of insurance. We will pay (3) Becomes aware by any other means that reasonable expenses for:
"bodily injury" or "property damage" has (1) First aid administered at the time of an occurred or has begun to occur. accident;
d. Damages because of "bodily injury" include (2) Necessary medical, surgical, x-ray and damages claimed by any person or dental services, including prosthetic organization for care, loss of services or devices; and death resulting at any time from the "bodily (3) Necessary ambulance, hospital,
injury". professional nursing and funeral
e. Incidental Medical Malpractice services.
(1) "Bodily injury" arising out of the 3. COVERAGE EXTENSION - rendering of or failure to render SUPPLEMENTARY PAYMENTS a. We will pay, with respect to any claim or
physician, dentist, nurse, emergency "suit" we investigate or settle, or any "suit" medical technician or paramedic shall against an insured we defend:
be deemed to be caused by an
"occurrence", but only if: (1) All expenses we incur.
(a) The physician, dentist, nurse, (2) Up to $1,000 for the cost of bail bonds emergency medical technician or required because of accidents or traffic paramedic is employed by you to law violations arising out of the use of provide such services; and any vehicle to which Business Liability Coverage for "bodily injury" applies. We
(b) You are not engaged in the
do not have to furnish these bonds.
business or occupation of providing
such services. (3) The cost of appeal bonds or bonds to release attachments, but only for bond
(2) For the purpose of determining the
limits of insurance for incidental medical amounts within the applicable limit of insurance. We do not have to furnish
malpractice, any act or omission
these bonds.
together with all related acts or
omissions in the furnishing of these (4) All reasonable expenses incurred by the services to any one person will be insured at our request to assist us in the considered one "occurrence". investigation or defense of the claim or "suit", including actual loss of earnings

2. MEDICAL EXPENSES
up to $500 a day because of time off
Insuring Agreement from work.
a. We will pay medical expenses as described (5) All costs taxed against the insured in below for "bodily injury" caused by an the "suit".
accident:
(6) Prejudgment interest awarded against
(1) On premises you own or rent; the insured on that part of the judgment (2) On ways next to premises you own or we pay. If we make an offer to pay the rent; or applicable limit of insurance, we will not
(3) Because of your operations; pay any prejudgment interest based on that period of time after the offer.
provided that: (7) All interest on the full amount of any (1) The accident takes place in the judgment that accrues after entry of the "coverage territory" and during the judgment and before we have paid, policy period; offered to pay, or deposited in court the (2) The expenses are incurred and reported part of the judgment that is within the to us within three years of the date of applicable limit of insurance. the accident; and Any amounts paid under (1) through (7) (3) The injured person submits to above will not reduce the limits of insurance. examination, at our expense, by
physicians of our choice as often as we
reasonably require.

Page 2 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
b. If we defend an insured against a "suit" So long as the above conditions are met, and a moment of the eat to attomeys' fees incurred by us in the named as a party to the "suit", we will defense of that indemnitee, necessary defend that indemnitee if all of the litigation expenses incurred by us and following conditions are met: necessary litigation expenses incurred (1) The "suit" against the indemnitee by the indemnitee at our request will be seeks damages for which the insured paid as Supplementary Payments. has assumed the liability of the Notwithstanding the provisions of indemnitee in a contract or agreement Paragraph 1.b.(b) of Section B. - that is an "insured contract; Exclusions, such payments will not be (2) This insurance applies to such liability deemed to be damages for "bodily assumed by the insured; injury" and "property damage" and will not reduce the Limits of Insurance.
(3) The obligation to defend, or the cost of
the defense of, that indemnitee, has Our obligation to defend an insured's also been assumed by the insured in indemnitee and to pay for attorneys' fees the same "insured contract"; and necessary litigation expenses as Supplementary Payments ends when:
(4) The allegations in the "suit" and the
information we know about the (1) We have used up the applicable limit "occurrence" are such that no conflict of insurance in the payment of appears to exist between the interests judgments or settlements; or of the insured and the interest of the (2) The conditions set forth above, or the indemnitee; terms of the agreement described in
(5) The indemnitee and the insured ask Paragraph (6) above, are no longer met. us to conduct and control the defense B. EXCLUSIONS
of that indemnitee against such "suit" 1. Applicable To Business Liability Coverage and agree that we can assign the
same counsel to defend the insured This insurance does not apply to:
and the indemnitee; and a. Expected Or Intended Injury
(6) The indemnitee: (1) "Bodily injury" or "property damage" (a) Agrees in writing to: expected or intended from the standpoint of the insured. This
(i) Cooperate with us in the
exclusion does not apply to "bodily
investigation, settlement or
injury" or "property damage" resulting
defense of the "suit";
from the use of reasonable force to
(ii) Immediately send us copies of protect persons or property; or demands, notices, (2) "Personal and advertising injury" arising summonses or legal papers
out of an offense committed by, at the
received in connection with
the "suit"; direction of or with the consent or
acquiescence of the insured with the
(ill) Notify any other insurer whose
coverage is available to the expectation not inflicting personal and indemnitee: and
b. Contractual Liability
(iv) Cooperate with us with (1) "Bodily injury" or "property damage"; or respect to coordinating other
applicable insurance available (2) "Personal and advertising injury" to the indemnitee: and for which the insured is obligated to pay (b) Provides us with written damages by reason of the assumption of authorization to: liability in a contract or agreement. (i) Obtain records and other This exclusion does not apply to liability nformation related to the for damages because of:
suit": anc (a) "Bodily injury", "property damage" o
(i) Conduct and control th "personal and advertising injury" that defense of the indemnitee ir the insured would have in the such "suit". absence of the contract or
Form SS 00 08 04 05 Page 3 of 24

BUSINESS LIABILITY COVERAGE FORM
(b) "Bodily injury" or "property damage" (b) Performing duties related to the assumed in a contract or agreement conduct of the insured's business, or that is an "insured contract (2) The spouse, child, parent, brother or provided the bodily injury" 0 sister of that "employee" as a "property damage" occurs consequence of (1) above.
subsequent to the execution of the This exclusion applies:
contract or agreement. Solely for
the purpose of liability assumed in (1) Whether the insured may be liable as an "insured contract", reasonable an employer or in any other capacity:
attomeys' fees and necessary
litigation expenses incurred by or for (2) To any obligation to share damages a party other than an insured are with or repay someone else who must deemed to be damages because of pay damages because of the injury. "bodily injury" or "property damage" This exclusion does not apply to liability provided: assumed by the insured under an "insured
(i) Liability to such party for, or for contract.
the cost of, that party's defense f. Pollution
has also been assumed in the
same insured contract", and (1) "Bodily injury", "property damage" or "personal and advertising injury"
(ii) Such attorneys' fees and arising out of the actual, alleged or litigation expenses are for
threatened discharge, dispersal,
defense of that party against a seepage, migration, release or escape civil or alternative dispute
of "pollutants":
resolution proceeding in which
damages to (a) At or from any premises, site or
insurance applies are alleged. location which is or was at any c. Liquor Liability time owned or occupied by, or
rented or loaned to any insured.
munt er proper damage or However, this subparagraph does not apply to:
reason of: (i) "Bodily injury" if sustained within
(1) Causing or contributing to the a building and caused by intoxication of any person; smoke, fumes, vapor or soot 2) The furnishing of alcoholic beverages to produced by or originating from a person under the legal drinking age or equipment that is used to heat, under the influence of alcohol; or cool or dehumidify the building, or equipment that is used to
(3) Any statute, ordinance or regulation
relating to the sale, gift, distribution or heat water for personal use, by use of alcoholic beverages. the building's occupants or their This exclusion applies only if you are in the (ii) "Bodily injury" or "property business of manufacturing, distributing, damage" for which you may be selling, serving or furnishing alcoholic held liable, if you are a beverages. contractor and the owner or
d. Workers' Compensation And Similar
Laws
Any obligation of the insured under :
vorkers' compensation, disability benefit:
or unemployment compensation law or
any similar law.
e. Employer's Liability
"Bodily injury" to:
(1) An "employee" of the insured arising
out of and in the course of:
(a) Employment by the insured; or

Page 4 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(ill) "Bodily injury" or "property released as part of the damage" arising out of heat, operations being performed smoke fumes from a by such insured, contractor o
"hostile fire"; ubcontractor
(b) At or from any premises, site or (i) "Bodily injury" or "property location which is or was at any damage" sustained within a time used by or for any insured or building and caused by the others for the handling, storage, release of gases, fumes or disposal, processing or treatment
of waste;
(C) Which are or were at any time
transported, handled, stored,
treated, disposed of, or processed
as waste by or for: (iii) "Bodily injury" or "property
(i) Any insured; or damage" arising out of heat,
(ii) Any person or organization for
whom you may be legally
responsible; (e) At or from any premises, site or
location on which any insured or any
(d) At or from any premises, site or
contractors subcontractors
location on which any insured or
working directly or indirectly on any
any contractors or subcontractors
insured's behalf are performing
working directly or indirectly on
operations if the operations are to
insured's
test for, monitor, clean up, remove,
pertorming operations if the
"pollutants" are brought on or to contain, treat, detoxify or neutralize, or in any way respond to, or assess
the premises, site or location in
the effects of, "pollutants".
connection with such operations
by such insured, contractor or (2) Any loss, cost or expense arising out subcontractor. However, of any:
subparagraph does not apply to: (a) Request, demand, order or statutory (i) "Bodily injury" or "property or regulatory requirement that any damage" arising out of the insured or others test for, monitor, escape of fuels, lubricants or clean up, remove, contain, treat, other operating fluids which are detoxify or neutralize, or in any way needed to perform the normal respond to, or assess the effects of, electrical, hydraulic Ог "pollutants"; or
mechanical functions (b) Claim or suit by or on behalf of a necessary for the operation of governmental for
"mobile equipment" or its parts, damages because of testing for, such fuels, lubricants or othe onitoring, cleaning up, removin perating fluids escape from ontaining, treating, detoxifying vehicle part designed to hold
store or receive them. This
exception does not apply if the
"bodily injury" or However, this paragraph does not
apply to liability for damages because
of "property damage" that the insurec
would have in the absence of suct
request, demand, order or statutory or
fluids, regulatory requirement, or such claim
Luids are brought on or 10 the or "suit" by or on behalf of a governmental authority.
discharged, dispersed or
Form SS 00 08 04 05 Page 5 of 24

BUSINESS LIABILITY COVERAGE FORM
g. Aircraft, Auto Or Watercraft (2) The use of "mobile equipment" in, or "Bodily injury" or "property damage" arising while in practice or preparation for, a out of the ownership, maintenance, use or prearranged racing, speed entrustment to others of any aircraft, "auto" demolition contest or in any stunting or watercraft owned or operated by or rented activity.
or loaned to any insured. Use includes i. War
operation and "loading or unloading". "Bodily injury", "property damage" or This exclusion applies even if the claims "personal and advertising injury", however against any insured allege negligence or caused, arising, directly or indirectly, out of:
other wrongdoing in the supervision, hiring, (1) War, including undeclared or civil war; employment, training or monitoring of others
by that insured, if the "occurrence" which (2) Warlike action by a military force, caused the "bodily injury" or "property including action in hindering or damage" ownership, defending against an actual or
maintenance, use or entrustment to others of expected attack, by any government, any aircraft, "auto" or watercraft that is sovereign or other authority using owned or operated by or rented or loaned to military personnel or other agents; or any insured. (3) Insurrection, rebellion, revolution,
This exclusion does not apply to: usurped power, or action taken by govermental authority in hindering or
(1) A watercraft while ashore on premises defending against any of these. you own or rent;
j. Professional Services
(2) A watercraft you do not own that is: "Bodily injury", "property damage" or (a) Less than 51 feet long; and "personal and advertising injury" arising (b) Not being used to carry persons out of the rendering of or failure to render for a charge; any professional service. This includes
(3) Parking an "auto" on, or on the ways but is not limited to:
next to, premises you own or rent, (1) Legal, accounting or advertising provided the "auto" is not owned by or services;
rented or loaned to you or the insured; (2) Preparing, approving, or failing to (4) Liability assumed under any "insured prepare or approve maps, shop contract" for the ownership, drawings, opinions, reports, surveys, maintenance or use of aircraft or field orders, change orders, designs or watercraft; drawings and specifications;
(5) "Bodily injury" or "property damage" (3) Supervisory, inspection, architectural arising out of the operation of any of or engineering activities; the equipment listed in Paragraph f.(2) 4) Medical, surgical, dental, x-ray o or f.(3) of the definition of "mobile ursing services treatment, advice c equipment"; or instruction;
(6) An aircraft that is not owned by any (5) Any health or therapeutic service treatment, advice or instruction;
(6) Any service, treatment, advice or
instruction for the purpose
appearance or skin enhancement, hair
njury" or "property damage", whethe removal or replacement or personal he other insurance is primary, excess
grooming;
(7) Optical or hearing aid services
h. Mobile Equipment including the prescribing, preparation, "Bodily injury" or "property damage" fitting, demonstration or distribution of arising out of: ophthalmic lenses
(1) The transportation of "mobile equipment" products or hearing aid devices; by an "auto" owned or operated by or
rented or loaned to any insured; or

Page 6 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(8) Optometry or optometric services Paragraphs (1), (3) and (4) of this including but not limited to examination exclusion do not apply to "property of the eyes and the prescribing, damage" (other than damage by fire) to preparation, fitting, demonstration or premises, including the contents of such distribution of ophthalmic lenses and premises, rented to you for a period of 7 or similar products; fewer consecutive days. A separate Limit (9) Any: of Insurance applies to Damage To
Premises Rented To You as described in
(a) Body piercing (not including ear Section D. - Limits Of Insurance. piercing);
Paragraph (2) of this exclusion does not
(b) Tattooing, including but not limited apply if the premises are "your work" and to the insertion of pigments into or were never occupied, rented or held for under the skin; and
rental by you.
(c) Similar services; Paragraphs (3) and (4) of this exclusion do (10) Services in the practice of pharmacy; not apply to the use of elevators. and
Paragraphs (3), (4), (5) and (6) of this
(11) Computer consulting, design exclusion do not apply to liability assumed programming services, including web under a sidetrack agreement. site design. Paragraphs (3) and (4) of this exclusion do Paragraphs (4) and (5) of this exclusion do not apply to "property damage" to not apply • to the Incidental Medical borrowed equipment while not being used Malpractice coverage afforded under to perform operations at a job site.

Paragraph 1.e. in Section A. - Coverages. Paragraph (6) of this exclusion does not k. Damage To Property apply to "property damage" included in the "Property damage" to: "products-completed operations hazard". (1) Property you own, rent or occupy, I. Damage To Your Product including any costs expenses "Property damage" to "your product" incurred by you, or any other person, arising out of it or any part of it. organization or entity, for repair, m. Damage To Your Work replacement, enhancement,
restoration or maintenance of such "Property damage" to "your work" arising property for any reason, including out of it or any part of it and included in the prevention of injury to a person or "products-completed operations hazard". damage to another's property; This exclusion does not apply if the (2) Premises you sell, give away or damaged work or the work out of which abandon, if the "property damage" arises the damage arises was performed on your out of any part of those premises; behalf by a subcontractor. (3) Property loaned to you; n. Damage To Impaired Property Or Property Not Physically Injured
(4) Personal property in the care, custody
or control of the insured; "Property damage" to "impaired property" or property that has not been physically
(5) That particular part of real property on injured, arising out of:
which you or any contractors or
(1) A defect, deficiency, inadequacy or
dangerous condition in "your product
or "your work", or
(6) That particular part of any property
that must be restored, repaired or
replaced because "your work" was with its terms.
incorrectly performed on it. This exclusion does not apply to the loss of use of other property arising out of
sudden and accidental physical injury to
"your product" or "your work" after it has
been put to its intended use.

Form SS 00 08 04 05 Page 7 of 24

BUSINESS LIABILITY COVERAGE FORM
o. Recall Of Products, Work Or Impaired (c) Title of any literary or artistic work; Property (8) Arising out of an offense committed b
Damages claimed for any loss, cost or an insured whose business is:
expense incurred by you or others for the (a) Advertising, broadcasting, loss of use, withdrawal, recall, inspection, publishing or telecasting; repair, replacement, adjustment, removal (b) Designing or determining content or disposal of: of web sites for others; or
(1) "Your product"; (c) An Internet search, access,
(2) "Your work"; or content or service provider.
(3) "Impaired property"; However, this exclusion does not if such product, work or property is apply to Paragraphs a., b. and c. withdrawn or recalled from the market or under the definition of "personal and from use by any person or organization advertising injury" in Section G. - because of a known or suspected defect, Liability And Medical Expenses deficiency, inadequacy or dangerous Definitions.
condition in it.

For the purposes of this exclusion,
p. Personal And Advertising Injury placing an "advertisement" for or "Personal and advertising injury: linking to others on your web site, by (1) Arising out of oral, written or electronic itself, is not considered the business publication of material, if done by or at advertising, broadcasting, insured with publishing or telecasting;
the direction of the
knowledge of its falsity; (9) Arising out of an electronic chat room (2) or bulletin board the insured hosts,
Arising out of oral, written or electronic owns, or over which the insured publication of material whose first
exercises control;
publication took place before the
beginning of the policy period; (10) Arising out of the unauthorized use of another's name or product in your e-mail
(3) Arising out of a criminal act committed
by or at the direction of the insured; address, domain name or metatags, or any other similar tactics to mislead
(4) Arising out of any breach of contract, another's potential customers; except an implied contract to use
another's "advertising idea" in your (11) Arising out of the violation of a "advertisement; person's right of privacy created by
any state or federal act.
(5) Arising out of the failure of goods, However, this exclusion does not products or services to conform with
quality or apply to liability for damages that the
any statement
insured would have in the absence of
performance made your
"advertisement"; such state or federal act;
(6) Arising out of the wrong description of (12) Arising out of:
the price of goods, products or services; (a) An advertisement for others on (7) Arising out of any violation of any
intellectual property rights such as (b) Placing a link to a web site o copyright, patent, trademark, trade others on your web site; name, trade secret, service mark or c) Content from a web site of other lisplayed within a frame or borde
authenticity. on your web site. Content includes
information, code, sounds, text,
apply infringement, in your
"advertisement", of (d) Computer code, software or
(a) Copyright; programming used to enable:
(b) Slogan, unless the slogan is also (i) Your web site; or a trademark, trade name, service (i) The presentation or functionality mark or other designation of origin of an "advertisement" or other or authenticity; or content on your web site;

Page 8 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(13) Arising out of a violation of any anti- (a) May be awarded or incurred by trust law; reason of any claim or suit
(14) Arising out of the fluctuation in price or alleging actual or threatened injury value of any stocks, bonds or other or damage of any nature or kind to securities; or persons or property which would
not have occurred in whole or in
(15) Arising out of discrimination or part but for the "asbestos hazard"; humiliation committed by or at the
direction of any "executive officer", (b) Arise out of any request, demand, director, stockholder, partner or order or statutory or regulatory member of the insured. requirement that any insured or
others test for, monitor, clean up,
q. Electronic Data remove,
encapsulate, contain,
Damages arising out of the loss of, loss of treat, detoxify or neutralize or in use of, damage to, corruption of, inability any way respond to or assess the to access, or inability to manipulate effects of an "asbestos hazard"; or "electronic data". (c) Arise out of any claim or suit for r. Employment-Related Practices damages because of testing for, "Bodily injury" or "personal and advertising monitoring, cleaning up, removing, injury" to: encapsulating, containing, treating,
(1) A person arising out of any: detoxifying or neutralizing or in any way responding to or assessing the
(a) Refusal to employ that person; effects of an "asbestos hazard". (b) Termination of that person's t. Violation Of Statutes That Govern E- employment; or Mails, Fax, Phone Calls Or Other
(c) Employment-related practices, Methods Of Sending Material Or policies, acts or omissions, such as Information
coercion, demotion, evaluation, "Bodily injury", "property damage", or reassignment, discipline, "personal and advertising injury" arising defamation, harassment, humiliation directly or indirectly out of any action or or discrimination directed at that omission that violates or is alleged to person; or violate:
(2) The spouse, child, parent, brother or (1) The Telephone Consumer Protection sister of person a Act (TCPA), including any amendment
consequence of "bodily injury" or of or addition to such law; "personal and advertising injury" to the
person at whom any of the (2) The CAN-SPAM Act of 2003, including employment-related any amendment of or addition to such practices
law; or
described in Paragraphs (a), (b), or (c)
above is directed. (3) Any statute, ordinance or regulation, other than the TCPA or CAN-SPAM Act
This exclusion applies: of 2003, that prohibits or limits the (1) Whether the insured may be liable as sending, transmitting, communicating or an employer or in any other capacity; distribution of material or information.

Damage To Premises Rented To You -
(2) To any obligation to share damages Exception For Damage By Fire, Lightning with or repay someone else who must or Explosion
pay damages because of the injury
Exclusions c. through h. and k. through o. do
s. Asbestos not apply to damage by fire, lightning ol
(1) "Bodily injury", "property damage" or explosion to premises rented to you ol "personal and advertising temporarily occupied by you with permission of "pering of the abesis hazard ra the owner. A separate Limit of Insurance (2) Any damages, judgments, settlements, applies to this coverage as described in Section D. - Liability And Medical Expenses
loss, costs or expenses that:

Limits Of Insurance.

Form SS 00 08 04 05 Page 9 of 24

BUSINESS LIABILITY COVERAGE FORM

2. Applicable To Medical Expenses Coverage e. A trust, you are an insured. Your trustees We will not pay expenses for "bodily injury": are also insureds, but only with respect to their duties as trustees.
a. Any Insured
To any insured, except "volunteer workers". 2. Each of the following is also an insured:
a. Employees And Volunteer Workers
b. Hired Person
To a person hired to do work for or on behalf Your "volunteer workers" only while of any insured or a tenant of any insured. performing duties related to the conduct of your business, or your "employees", other
c. Injury On Normally Occupied Premises than either your "executive officers" (if you To a person injured on that part of are an organization other than a premises you own or rent that the person partnership, joint venture or limited liability normally occupies. company) or your managers (if you are a d. Workers' Compensation And Similar limited liability company, but only for acts Laws within the scope of their employment by
you or while performing duties related to
To a person, whether or not an the conduct of your business. "employee" of any insured, if benefits for
the "bodily injury" are payable or must be However, none of these "employees" or provided under a workers' compensation "volunteer workers" are insureds for:
or disability benefits law or a similar law. (1) "Bodily injury" or "personal and e. Athletics Activities advertising injury":

To a person injured while practicing, (a) To you, to your partners or instructing or participating in any physical members (if you are a partnership exercises or games, sports or athletic or joint venture), to your members contests. (if you are a limited liability
company), or to a co-"employee"
f. Products-Completed Operations Hazard
while in the course of his or her
Included with the "products-completed employment or performing duties operations hazard". related to the conduct of your
g. Business Liability Exclusions business, or to your other "volunteer workers" while
Excluded under Business Liability Coverage.
performing duties related to the
C. WHO IS AN INSURED conduct of your business;

1. If you are designated in the Declarations as: (b) To the spouse, child, parent, brother or sister of that co-
a. An individual, you and your spouse are
insureds, but only with respect to the "employee" or that "volunteer conduct of a business of which you are the worker" as a consequence of sole owner. Paragraph (1)(a) above;
b. A partnership or joint venture, you are an (c) For which there is any obligation insured. Your members, your partners, and to share damages with or repay their spouses are also insureds, but only with someone else who must pay respect to the conduct of your business. damages because of the injury described in Paragraphs (1)(a) or
c. A limited liability company, you are an (b) above; or insured. Your members are also insureds,
but only with respect to the conduct of your (d) Arising out of his or her providing business. Your managers are insureds, but or failing to provide professional only with respect to their duties as your health care services. managers. If you are not in the business of
d. An organization other than a partnership, providing professional health care joint venture or limited liability company, you services, Paragraph (d) does not apply are an insured. Your "executive officers" and to any nurse, emergency medical directors are insureds, but only with respect technician or paramedic employed by to their duties as your officers or directors. you to provide such services.

Your stockholders are also insureds, but only (2) "Property damage" to property:
with respect to their liability as stockholders. (a) Owned, occupied or used by,

Page 10 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(b) Rented to, in the care, custody or b. Coverage under this provision does not control of, or over which physical apply to:
control is being exercised for any (1) "Bodily injury" or "property damage" purpose by you, any of your that occurred; or
"employees", "volunteer workers",
any partner or member (if you are (2) "Personal and advertising injury" a partnership or joint venture), or arising out of an offense committed any member (if you are a limited before you acquired or formed the liability company. organization.
b. Real Estate Manager 4. Operator Of Mobile Equipment
Any person (other than your "employee" or With respect to "mobile equipment" registered in "volunteer worker"), or any organization your name under any motor vehicle registration while acting as your real estate manager. law, any person is an insured while driving such C. Temporary Custodians Of Your equipment along a public highway with your Property permission. Any other person or organization
responsible for the conduct of such person is
Any person or organization having proper
also an insured, but only with respect to liability
temporary custody of your property if you arising out of the operation of the equipment, and die, but only: only if no other insurance of any kind is available (1) With respect to liability arising out of the to that person or organization for this liability. maintenance or use of that property; and However, no person or organization is an insured (2) Until your legal representative has with respect to:
been appointed. a. "Bodily injury" to a co-"employee" of the d. Legal Representative If You Die person driving the equipment; or Your legal representative if you die, but b. "Property damage" to property owned by, only with respect to duties as such. That rented to, in the charge of or occupied by representative will have all your rights and you or the employer of any person who is duties under this insurance. an insured under this provision. e. Unnamed Subsidiary 5. Operator of Nonowned Watercraft Any subsidiary and subsidiary thereof, of With respect to watercraft you do not own that yours which is a legally incorporated entity is less than 51 feet long and is not being used of which you own a financial interest of to carry persons for a charge, any person is an more than 50% of the voting stock on the insured while operating such watercraft with effective date of this Coverage Part. your permission. Any other person or organization responsible for the conduct of
The insurance afforded herein for any
such person is also an insured, but only with
subsidiary not shown in the Declarations
respect to liability arising out of the operation
as a named insured does not apply to
of the watercraft, and only if no other
injury or damage with respect to which an insurance of any kind is available to that insured under this insurance is also an
insured under another policy or would be person or organization for this liability. an insured under such policy but for its However, no person or organization is an termination or upon the exhaustion of its insured with respect to:
limits of insurance. a. "Bodily injury" to a co-"employee" of the

3. Newly Acquired Or Formed Organization person operating the watercraft; or Any organization you newly acquire or form, b. "Property damage" to property owned by, rented to, in the charge of or occupied by
you or the employer of any person who is
an insured under this provision.
the voting stock, will qualify as a Named 6. Additional Insureds When Required By Insured if there is no other similar insurance Written Contract, Written Agreement Or available to that organization. However: Permit
a. Coverage under this provision is afforded The person(s) or organizations) identified in only until the 180th day after you acquire Paragraphs a. through f. below are additional or form the organization or the end of the insureds when you have agreed, in a written policy period, whichever is earlier; and
Form SS 00 08 04 05 Page 11 of 24

BUSINESS LIABILITY COVERAGE FORM
contract, written agreement or because of a (e) Any failure to make such permit issued by a inspections, adjustments, tests or
subdivision, that such person or organization servicing as the vendor has be added as an additional insured on your agreed to make or normally policy, provided the injury or damage occurs undertakes to make in the usual subsequent to the execution of the contract or course of business, in connection agreement, or the issuance of the permit. with the distribution or sale of the A person or organization is an additional products;
insured under this provision only for that (f) Demonstration, installation, eriod of time required by the contract servicing or repair operations, agreement or permit. except such operations performed
at the vendor's premises ir
However, no such person or organization is an connection with the sale of the additional insured under this provision if such product; (g) Products which, after distribution
y us and made a part of this Coverage Par or sale by you, have been labeled ncluding all persons or organizations adde or relabeled or used as as additional insureds under the specific container, part or ingredient of any additional insured coverage grants in Section other thing or substance by or for F. - Optional Additional Insured Coverages. the vendor; or a. Vendors (h) "Bodily injury" or "property
damage" arising out of the sole
Any person(s) or organization(s) (referred to negligence of the vendor for its below as vendor), but only with respect to own acts or omissions or those of "bodily injury" or "property damage" arising its employees or anyone else out of "your products" which are distributed
acting on its behalf. However, this
or sold in the regular course of the vendor's exclusion does not apply to:
business and only if this Coverage Part
provides coverage for "bodily injury" or (i) The exceptions contained in "property damage" included within the Subparagraphs (d) or (f); or "products-completed operations hazard". (ii) Such inspections, adjustments, (1) The insurance afforded to the vendor tests or servicing as the vendor is subject to the following additional has agreed to make or normally exclusions: undertakes to make in the usual
course of business, in
This insurance does not apply to: connection with the distribution (a) "Bodily injury" or "property or sale of the products. damage" for which the vendor is
(2) This insurance does not apply to any
obligated to pay damages by insured person or organization from reason the whom you have acquired such products,
or any ingredient, part or container,
entering into, accompanying or
containing such products.
of the contract or agreement; b. Lessors Of Equipment
(b) Any express warranty (1) Any person or organization from unauthorized by you; with respect to their liability for "bodily c) Any physical or chemical change
"property
in the vendort made intentionall "personal and advertising injury caused, in whole or in part, by your
(d) Repacked solay for the purpose of except when maintenance, operation or use of

Page 12 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(2) With respect to the insurance afforded e. Permits Issued By State Or Political to these additional insureds, this Subdivisions
insurance does not apply to any (1) Any state or political subdivision, but "occurrence" which takes place after
only with respect to operations
you cease to lease that equipment. performed by you or on your behalf for c. Lessors Of Land Or Premises which the state or political subdivision (1) Any person or organization from has issued a permit. whom you lease land or premises, but (2) With respect to the insurance afforded only with respect to liability arising out to these additional insureds, this of the ownership, maintenance or use insurance does not apply to:
of that part of the land or premises
(a) "Bodily injury", "property damage"
leased to you. or "personal and advertising
2) With respect to the insurance afforde injury" arising out of operations ) these additional insureds. th performed for the state or insurance does not apply to: municipality; or
(a) Any "occurrence" which takes (b) "Bodily injury" or "property damage" place after you cease to lease that included within the "products- land or be a tenant in that completed operations hazard". premises; or f. Any Other Party
(b) Structural alterations, new (1) Any other person or organization who construction demolition
is not an insured under Paragraphs a.
operations performed by or on through e. above, but only with behalf of such person respect to liability for "bodily injury", organization. "property damage" or "personal and
d. Architects, Engineers Or Surveyors advertising injury" caused, in whole or (1) Any architect, engineer, or surveyor, but in part, by your acts or omissions or only with respect to liability for "bodily the acts or omissions of those acting injury", "property damage" or "personal on your behalf:
and advertising injury" caused, in whole (a) In the performance of your or in part, by your acts or omissions or ongoing operations; the acts or omissions of those acting on (b) In connection with your premises your behalf: owned by or rented to you; or
(a) In connection with your premises; (c) In connection with "your work" and or
included within the "products-
(b) In the performance of your completed operations hazard", but ongoing operations performed by only if
you or on your behalf. (i) The written contract or written (2) With respect to the insurance afforded agreement requires you to to these additional insureds, the provide such coverage to following additional exclusion applies: such additional insured; and (i) This Coverage Part provides
"bodily injury", coverage for "bodily injury" or
"personal and advertising injury" "property damage" included arising out of the rendering of or the within the "products- failure to render any professional completed operations hazard". services by or for you, including: (2) With respect to the insurance afforded (a) The preparing, approving, or to these additional insureds, this failure to prepare or approve, insurance does not apply to:
maps, shop drawings, opinions, "Bodily injury", "property damage" o reports, surveys, field orders, "personal and advertising injury" avings and speciations: or arising out of the rendering of, or the failure to render, any professional
(b) Supervisory, inspection, architectural, engineering or surveying architectural engineering services, including:
activities.

Form SS 00 08 04 05 Page 13 of 24

BUSINESS LIABILITY COVERAGE FORM
(a) The preparing, approving, or This General Aggregate limit does not failure to prepare or approve, apply to "property damage" to premises maps, shop drawings, opinions, while rented to you or temporarily reports, surveys, field orders, occupied by you with permission of the change orders, designs or owner, arising out of fire, lightning or drawings and specifications; or explosion.
(b) Supervisory, inspection, 3. Each Occurrence Limit
architectural engineering Subject to 2.a. or 2.b above, whichever activities. applies, the most we will pay for the sum of all The limits of insurance that apply to additional damages because of all "bodily injury", insureds are described in Section D. - Limits "property damage" and medical expenses Of Insurance. arising out of any one "occurrence" is the How this insurance applies when other Liability and Medical Expenses Limit shown in insurance is available to an additional insured the Declarations. is described in the Other Insurance Condition The most we will pay for all medical expenses in Section E. - Liability And Medical Expenses because of "bodily injury" sustained by any General Conditions. one person is the Medical Expenses Limit No person or organization is an insured with shown in the Declarations. respect to the conduct of any current or past 4. Personal And Advertising Injury Limit partnership, joint venture or limited liability Subject to 2.b. above, the most we will pay for company that is not shown as a Named Insured in the sum of all damages because of all the Declarations. "personal and advertising injury" sustained by D. LIABILITY AND MEDICAL EXPENSES any one person or organization is the Personal LIMITS OF INSURANCE and Advertising Injury Limit shown in the Declarations.

1. The Most We Will Pay 5. Damage To Premises Rented To You Limit The Limits of Insurance shown in the
Declarations and the rules below fix the most The Damage To Premises Rented To You we will pay regardless of the number of: Limit is the most we will pay under Business Liability Coverage for damages because of
a. Insureds;
"property damage" to any one premises, while
b. Claims made or "suits" brought; or rented to you, or in the case of damage by fire, c. Persons or organizations making claims or lightning or explosion, while rented to you or bringing "suits". temporarily occupied by you with permission of the owner.

2. Aggregate Limits
The most we will pay for: In the case of damage by fire, lightning or explosion, the Damage to Premises Rented To
a. Damages because of "bodily injury" and You Limit applies to all damage proximately "property the caused by the same event, whether such
"products-completed operations hazard" is • damaged operatons damage results from fire, lightning or explosion
the Products-Completed Operations or any combination of these.

Aggregate Limit shown the

6. How Limits Apply To Additional Insureds
Declarations.
b. Damages because of all other "bodily The most we will pay on behalf of a person or injury", "property damage" or "personal organization who is an additional insured and advertising injury", including medical under this Coverage Part is the lesser of:
expenses, is the General Aggregate Limit a. The limits of insurance specified in a shown in the Declarations. written contract, written agreement or This General Aggregate Limit applies permit issued by a state or political separately to each of your "locations' subdivision; or
owned by or rented to you. b. The Limits of Insurance shown in the "Location" means premises involving the Declarations.
same or connecting lots, or premises Such amount shall be a part of and not in whose connection is interrupted only by a addition to the Limits of Insurance shown in street, roadway or right-of-way of a the Declarations and described in this Section. railroad.

Page 14 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
If more than one limit of insurance under this (1) Immediately send us copies of any policy and any endorsements attached thereto demands, notices, summonses or applies to any claim or "suit", the most we will pay legal papers received in connection under this policy and the endorsements is the with the claim or "suit"; single highest limit of liability of all coverages (2) Authorize us to obtain records and applicable to such claim or "suit". However, this
other information;
paragraph does not apply to the Medical Expenses
limit set forth in Paragraph 3. above. (3) Cooperate with us in the investigation, settlement of the claim or defense
The Limits of Insurance of this Coverage Part apply against the "suit"; and separately to each consecutive annual period and to
(4) Assist us, upon our request, in the
any remaining period of less than 12 months, starting
enforcement of any right against any
with the beginning of the policy period shown in the
person or organization that may be
Declarations, unless the policy period is extended liable to the insured because of injury after issuance for an additional period of less than 12 or damage to which this insurance months. In that case, the additional period will be
may also apply.
deemed part of the last preceding period for purposes
of determining the Limits of Insurance. d. Obligations At The Insured's Own Cost E. LIABILITY AND MEDICAL EXPENSES No insured will, except at that insured's own cost, voluntarily make a payment, assume
GENERAL CONDITIONS any obligation, or incur any expense, other

1. Bankruptcy than for first aid, without our consent.

Bankruptcy or insolvency of the insured or of e. Additional Insured's Other Insurance the insured's estate will not relieve us of our If we cover a claim or "suit" under this obligations under this Coverage Part. Coverage Part that may also be covered

2. Duties In The Event Of Occurrence, by other insurance available to an Offense, Claim Or Suit additional insured, such additional insured must submit such claim or "suit" to the
a. Notice Of Occurrence Or Offense
other insurer for defense and indemnity.

You or any additional insured must see to
it that we are notified as However, this provision does not apply to soon as
practicable of an "occurrence" or an the extent that you have agreed in a offense which may result in a claim. To written contract, written agreement or the extent possible, notice should include: permit that this insurance is primary and non-contributory with the additional
(1) How, when and where the "occurrence" insured's own insurance. or offense took place;
f. Knowledge Of An Occurrence, Offense,
(2) The names and addresses of any Claim Or Suit
injured persons and witnesses; and
Paragraphs a. and b. apply to you or to
3) The nature and location of any injury any additional insured only when such or damage arising out of the "occurrence", offense, claim or "suit" is "occurrence" or offense. known to:
b. Notice Of Claim (1) You or any additional insured that is If a claim is made or "suit" is brought an individual;
against any insured, you or any additional (2) Any partner, if you or an additional insured is a partnership;
(1) Immediately record the specifics of the (3) Any manager, if you or an additional claim or "suit" and the date received; insured is a limited liability company; and
(4) Any "executive officer" or insurance
(2) Notify us as soon as practicable. manager, if you or an additional You or any additional insured must see to insured is a corporation; it that we receive a written notice of the (5) Any trustee, if you or an additional claim or "suit" as soon as practicable. insured is a trust; or c. Assistance And Cooperation Of The (6) Any elected or appointed official, if you Insured or an additional insured is a politica
You and any other involved insured must: subdivision or public entity.

Form SS 00 08 04 05 Page 15 of 24

BUSINESS LIABILITY COVERAGE FORM
This Paragraph f. applies separately to (3) We have issued this policy in reliance you and any additional insured. upon your representations.

3. Financial Responsibility Laws b. Unintentional Failure To Disclose a. When this policy is certified as proof of Hazards
financial responsibility for the future under If unintentionally you should fail to disclose the provisions of any motor vehicle all hazards relating to the conduct of your financial responsibility law, the insurance business at the inception date of this provided by the policy for "bodily injury" Coverage Part, we shall not deny any liability and "property damage" liability will coverage •under this Coverage Part comply with the provisions of the law to because of such failure. the extent of the coverage and limits of 7. Other Insurance insurance required by that law.
b. With respect to "mobile equipment" to If other valid and collectible insurance is which this insurance applies, we will available for a loss we cover under this Coverage Part, our obligations are limited as
provide any liability, uninsured motorists, follows:
underinsured motorists, no-fault or other
coverage required by any motor vehicle a. Primary Insurance law. We will provide the required limits for This insurance is primary except when b. those coverages. below applies. If other insurance is also

4. Legal Action Against Us primary, we will share with all that other No person or organization has a right under insurance by the method described in c. below.
this Coverage Form:
a. To join us as a party or otherwise bring us b. Excess Insurance into a "suit" asking for damages from an This insurance is excess over any of the insured; or other insurance, whether primary, excess,
b. To sue us on this Coverage Form unless contingent or on any other basis:
all of its terms have been fully complied (1) Your Work with. That is Fire, Extended Coverage,
A person or organization may sue us to recover Builder's Risk, Installation Risk or on an agreed settlement or on a final judgment similar coverage for "your work"; against an insured; but we will not be liable for (2) Premises Rented To You damages that are not payable under the terms of
this insurance or that are in excess of the That is fire, lightning or explosion applicable limit of insurance. An agreed insurance for premises rented to you settlement means a settlement and release of or temporarily occupied by you with liability signed by us, the insured and the permission of the owner; claimant or the claimant's legal representative. (3) Tenant Liability

5. Separation Of Insureds That is insurance purchased by you to Except with respect to the Limits of Insurance, cover your liability as a tenant for and any rights or duties specifically assigned "property damage" to premises rented in this policy to the first Named Insured, this to you or temporarily occupied by you insurance applies: with permission of the owner;
a. As if each Named Insured were the only (4) Aircraft, Auto Or Watercraft Named Insured; and If the loss arises out of the maintenance b. Separately to each insured against whom or use of aircraft, "autos" or watercraft to a claim is made or "suit" is brought. the extent not subject to Exclusion g. of Section A. - Coverages.

6. Representations
(5) Property Damage To Borrowed
a. When You Accept This Policy Equipment Or Use Of Elevators By accepting this policy, you agree: If the loss arises out of "property (1) The statements in the Declarations damage" to borrowed equipment or are accurate and complete; the use of elevators to the extent not (2) Those statements are based upon subject to Exclusion k. of Section A. - representations you made to us; and Coverages.

Page 16 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
(6) When You Are Added As An When this insurance is excess over other Additional Insured To Other insurance, we will pay only our share of Insurance the amount of the loss, if any, that
That is other insurance available to exceeds the sum of:
you covering liability for damages (1) The total amount that all such other arising out of the premises o insurance would pay for the loss in the erations, or products and complete absence of this insurance; and erations, for which you have be
(2) The total of all deductible and self-
added as an additional insured by that insured amounts under all that other insurance; or insurance.
(7) When You Add Others As An We will share the remaining loss, if any, with Additional Insured To This
Insurance any other insurance that is not described in
this Excess Insurance provision and was not
That is other insurance available to an bought specifically to apply in excess of the additional insured. Limits of Insurance shown in the
However, the following provisions Declarations of this Coverage Part. apply to other insurance available to c. Method Of Sharing any person or organization who is an If all the other insurance permits additional insured under this Coverage contribution by equal shares, we will follow Part: this method also. Under this approach,
(a) Primary Insurance When each insurer contributes equal amounts Required By Contract until it has paid its applicable limit of This insurance is primary if you insurance or none of the loss remains, have agreed in a written contract, whichever comes first. written agreement or permit that If any of the other insurance does not permit this insurance be primary. If other contribution by equal shares, we will insurance is also primary, we will contribute by limits. Under this method, each share with all that other insurance insurer's share is based on the ratio of its by the method described in c. applicable limit of insurance to the total below. applicable limits of insurance of all insurers.
(b) Primary And Non-Contributory 8. Transfer Of Rights Of Recovery Against To Other Insurance When Others To Us
Required By Contract a. Transfer Of Rights Of Recovery
If you have agreed in a written If the insured has rights to recover all or contract, written agreement or of
part any payment, including
permit that this insurance Supplementary Payments, we have made primary and non-contributory with under this Coverage Part, those rights are the additional insured's transferred to us. The insured must do insurance, this insurance is nothing after loss to impair them. At our Contibution om it to ther request, the insured will bring "suit" or transfer those rights to us and help us
enforce them. This condition does not
Paragraphs (a) and (b) do not apply to apply to Medical Expenses Coverage. other insurance to which the additional b. Waiver Of Rights Of Recovery (Waiver insured has been added as an Of Subrogation)
additional insured.

If the insured has waived any rights of
recovery against any person or
organization for all or part of any payment,
other insurer has a duty to defend the including Supplementary Payments, we have made under this Coverage Part, we
also waive that right, provided the insured
waived their rights of recovery against
such person or organization in a contract,
agreement or permit that was executed
prior to the injury or damage.

Form SS 00 08 04 05 Page 17 of 24

BUSINESS LIABILITY COVERAGE FORM
F. OPTIONAL ADDITIONAL INSURED 3. Additional Insured - Grantor Of Franchise COVERAGES WHO IS AN INSURED under Section C. is
amended to include as an additional insured
If listed or shown as applicable in the Declarations,
one or more of the following Optional Additional the person(s) or organizations) shown in the Declarations as an Additional Insured -
Insured Coverages also apply. When any of these
Optional Additional Insured Coverages apply, Grantor Of Franchise, but only with respect to Paragraph 6. (Additional Insureds When Required their liability as grantor of franchise to you. by Written Contract, Written Agreement or Permit) 4. Additional Insured - Lessor Of Leased of Section C., Who Is An Insured, does not apply Equipment to the person or organization shown in the a. WHO IS AN INSURED under Section C. is Declarations. These coverages are subject to the amended to include as an additional terms and conditions applicable to Business insured the person(s) or organizations) Liability Coverage in this policy, except as shown in the Declarations as an Additional provided below: Insured - Lessor of Leased Equipment,

1. Additional Insured - Designated Person Or but only with respect to liability for "bodily Organization injury", "property damage" or "personal
WHO IS AN INSURED under Section C. is and advertising injury" caused, in whole or amended to include as an additional insured in part, by your maintenance, operation or use of equipment leased to you by such
the person(s) or organization(s) shown in the
Declarations, but only with respect to liability person(s) or organization(s). for "bodily injury", "property damage" or b. With respect to the insurance afforded to "personal and advertising injury" caused, in these additional insureds, this insurance whole or in part, by your acts or omissions or does not apply to any "occurrence" which the acts or omissions of those acting on your takes place after you cease to lease that behalf: equipment.
a. In the performance of your ongoing 5. Additional Insured - Owners Or Other operations; or Interests From Whom Land Has Been
Leased
b. In connection with your premises owned
by or rented to you. a. WHO IS AN INSURED under Section C. is

2. Additional Insured - Managers Or Lessors amended to include as an additional Of Premises insured the person(s) or organizations)
shown in the Declarations as an Additional
a. WHO IS AN INSURED under Section C. is Insured - Owners Or Other Interests From amended to include as an additional insured Whom Land Has Been Leased, but only the person(s) or organization(s) shown in the with respect to liability arising out of the Declarations as an Additional Insured -
ownership, maintenance or use of that part
Designated Person Or Organization; but only of the land leased to you and shown in the with respect to liability arising out of the Declarations. ownership, maintenance or use of that part of
b. With respect to the insurance afforded to
Dedarties leased to you and shown in the these additional insureds, the following b. With respect to the insurance afforded to additional exclusions apply:
these additional insureds, the following This insurance does not apply to:
additional exclusions apply: (1) Any "occurrence" that takes place This insurance does not apply to: after you cease to lease that land; or (1) Any "occurrence" which takes place (2) Structural alterations, new after you cease to be a tenant in that construction or demolition operations performed by or on behalf of such
person or organization.
(2) Structural alterations,
construction or demolition operations 6. Additional Insured - State Or Political performed by or on behalf of such Subdivision - Permits person or organization. a. WHO IS AN INSURED under Section C. is amended to include as an additiona
insured the state or political subdivision
shown in the Declarations as an Additional

Page 18 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
Insured - State Or Political Subdivision - (e) Any failure to make such Permits, but only with respect to inspections, adjustments, tests or operations performed by you or on your servicing as the vendor has agreed behalf for which the state or political to make or normally undertakes to subdivision has issued a permit. make in the usual course of b. With respect to the insurance afforded to usiness, in connection with the these additional insureds, the following distribution or sale of the products additional exclusions apply: (1) Demonstration, installation, This insurance does not apply to: servicing or repair operations, except such operations performe
(1) "Bodily injury", "property damage" or at the vendor's premises i "personal and advertising injury" connection with the sale of the arising out of operations performed for product;
the state or municipality; or
(g) Products which, after distribution
2) "Bodily injury" or "property damage or sale by you, have been labeled ncluded in the "product-complete
operations" hazard. or relabeled or used as a
ontainer, part or ingredient of a

7. Additional Insured - Vendors her thing or substance by or 1 a. WHO IS AN INSURED under Section C. is the vendor; or amended to include as an additional (h) "Bodily injury" "property insured the person(s) or organization(s) damage" arising out of the sole (referred to below as vendor) shown in the negligence of the vendor for its Declarations as an Additional Insured - own acts or omissions or those of Vendor, but only with respect to "bodily its employees or anyone else injury" or "property damage" arising out of acting on its behalf. However, this "your products" which are distributed or exclusion does not apply to:
sold in the regular course of the vendor's
(i) The exceptions contained in
business and only if this Coverage Part
provides coverage for "bodily injury" or Subparagraphs (d) or (f); or "property damage" included within the (il) Such inspections, "products-completed operations hazard". adjustments, tests or servicing as the vendor has agreed to
b. The insurance afforded to the vendor is
make or normally undertakes
subject to the following additional exclusions: to make in the usual course of (1) This insurance does not apply to: business, in connection with (a) "Bodily injury" or "property the distribution or sale of the damage" for which the vendor is products.
obligated to pay damages by (2) This insurance does not apply to any reason of the assumption of insured person or organization from liability in a contract or agreement. whom you have acquired such products, or any ingredient, part or
entering into,
vendor would have in the absence accompanying or containing such of the contract or agreement; products.
(b) Any express warranty 8. Additional Insured - Controlling Interest unauthorized by you;
WHO IS AN INSURED under Section C. is
c) Any physical or chemical chang amended to include as an additional insured 1 the product made intentional the person(s) or organizations) shown in the by the vendor; Declarations as an Additional Insured -
(d) Repackaging, unless unpacked Controlling Interest, but only with respect to solely for the purpose of inspection, their liability arising out of:
demonstration, a. Their financial control of you; or
substitution of b. Premises they own, maintain or control instructions from the manufacturer, while you lease or occupy these premises. and then repackaged in the original
container;
Form SS 00 08 04 05 Page 19 of 24

BUSINESS LIABILITY COVERAGE FORM
This insurance does not apply to structural The limits of insurance that apply to additional alterations, new construction and demolition insureds are described in Section D. - Limits Of operations performed by or for that person or Insurance. organization. How this insurance applies when other insurance

9. Additional Insured - Owners, Lessees Or is available to an additional insured is described in Contractors - Scheduled Person Ог the Other Insurance Condition in Section E. - Organization Liability And Medical Expenses General
a. WHO IS AN INSURED under Section C. is Conditions.
amended to include as an additional G. LIABILITY AND MEDICAL EXPENSES insured the person(s) or organizations) DEFINITIONS
shown in the Declarations as an Additional
Insured - Owner, Lessees Or Contractors, 1. "Advertisement" means the widespread public but only with respect to liability for "bodily dissemination of information or images that injury", "property damage" or "personal has the purpose of inducing the sale of goods, and advertising injury" caused, in whole or products or services through:
in part, by your acts or omissions or the a. (1) Radio; acts or omissions of those acting on your (2) Television; behalf:
(3) Billboard;
(1) In the performance of your ongoing (4) Magazine;
operations for the additional
(5) Newspaper;
(2) In connection with "your work" b. The Internet, but only that part of a web performed for that additional insured site that is about goods, products or and included within the "products- services for the purposes of inducing the completed operations hazard", but sale of goods, products or services; or only if this Coverage Part provides c. Any other publication that is given coverage for "bodily injury" or widespread public distribution. "property damage" included within the However, "advertisement" does not include:
"products-completed operations
hazard". a. The design, printed material, information
or images contained in, on or upon the
b. With respect to the insurance afforded to packaging or labeling of any goods or these additional insureds, this insurance products or
does not apply to "bodily injury", "property
damage" or "personal b. An interactive conversation between or an advertising
injury" arising out of the rendering of, or among persons through a computer network. the failure to render, any professional 2. "Advertising idea" means any idea for an architectural, engineering or surveying "advertisement". services, including: 3. "Asbestos hazard" means an exposure or (1) The preparing, approving, or failure to threat of exposure to the actual or alleged prepare or approve, maps, shop properties of asbestos and includes the mere drawings, opinions, reports, surveys, presence of asbestos in any form. field orders, change orders, designs or 4. "Auto" means a land motor vehicle, trailer or drawings and specifications; or semi-trailer designed for travel on public (2) Supervisory, inspection, architectural roads, including any attached machinery or or engineering activities. equipment. But "auto" does not include

10. Additional Insured - Co-Owner Of Insured "mobile equipment".

Premises 5. "Bodily injury" means physical:

WHO IS AN INSURED under Section C. is a. Injury;
amended to include as an additional insured b. Sickness; o the person(s) or Organization(s) shown in the c. Disease Declarations as an Additional Insured - Co-
Owner Of Insured Premises, but only with sustained by a person and, if arising out of the respect to their liability as co-owner of the above, mental anguish or death at any time premises shown in the Declarations. 6. "Coverage territory" means:

Page 20 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
a. The United States of America (including its b. You have failed to fulfill the terms of a territories and possessions), Puerto Rico contract or agreement; and Canada;
if such property can be restored to use by:
b. International waters or airspace, but only if a. The repair, replacement, adjustment or the injury or damage occurs in the course removal of "your product" or "your work"; of travel or transportation between any ог
places included in a. above;
b. Your fulfilling the terms of the contract or
c. All other parts of the world if the injury or agreement. damage arises out of:

12. "Insured contract" means:
(1) Goods or products made or sold by you
in the territory described in a. above; a. A contract for a lease of premises.

However, that portion of the contract for a
(2) The activities of a person whose home lease of premises that indemnifies any is in the territory described in a.
person or organization for damage by fire,
above, but is away for a short time on lightning or explosion to premises while your business; or
rented to you or temporarily occupied by
(3) "Personal and advertising injury" you with permission of the owner is offenses that take place through the subject to the Damage To Premises Internet or similar electronic means of Rented To You limit described in Section communication D. - Liability and Medical Expenses Limits provided the insured's responsibility to pay of Insurance. damages is determined in the United States of b. A sidetrack agreement; America (including its territories and c. Any easement or license agreement, possession moRe corina ne including an easement or license the merits according to the agreement in connection with construction substantive law in such territory, or in a or demolition operations on or within 50 settlement we agree to. feet of a railroad;

7. "Electronic data" means information, facts or d. Any obligation, as required by ordinance, programs: to indemnify a municipality, except in
a. Stored as or on; connection with work for a municipality; b. Created or used on; or e. An elevator maintenance agreement; or c. Transmitted to or from f. That part of any other contract or computer software, including systems and agreement pertaining to your business applications software, hard or floppy disks, (including an indemnification of a CD-ROMS, tapes, drives, cells, data municipality in connection with work processing devices or any other media which performed for a municipality under which are used with electronically controlled you assume the tort liability of another equipment. party to pay for "bodily injury" or "property

8. "Employee" includes a "leased worker". damage" to a third person or organization, "Employee" does not include a "temporary provided the "bodily injury" or "property worker". damage" is caused, in whole or in part, by
you or by those acting on your behalf.
"Executive officer" means a person holding Tort liability means a liability that would be any of the officer positions created by your imposed by law in the absence of any charter, constitution, by-laws or any other contract or agreement. similar governing document.

Paragraph f. includes that part of any

10. "Hostile fire" means one which becomes contract or agreement that indemnifies a uncontrollable or breaks out from where it was railroad for "bodily injury" or "property intended to be. damage" arising out of construction or

11. "Impaired property" means tangible property, demolition operations within 50 feet of any other than "your product" or "your work", that railroad property and affecting any railroad cannot be used or is less useful because: bridge or trestle, tracks, road-beds, tunnel, a. It incorporates "your product" or "your work" underpass or crossing. that is known or thought to be defective, However, Paragraph f. does not include deficient, inadequate or dangerous; or that part of any contract or agreement:

Form SS 00 08 04 05 Page 21 of 24

BUSINESS LIABILITY COVERAGE FORM
(1) That indemnifies architect, (1) Power cranes, shovels, loaders, engineer or surveyor for injury or diggers or drills; or damage arising out of: (2) Road construction or resurfacing (a) Preparing, approving or failing to equipment such as graders, scrapers prepare or approve maps, shop or rollers;
drawings, opinions, reports, e. Vehicles not described in a., b., c., or d. surveys, field orders, change above that are not self-propelled and are orders, designs or drawings and maintained primarily to provide mobility to specifications; or permanently attached equipment of the (b) Giving directions or instructions, following types:
or failing to give them, if that is the (1) Air compressors, pumps and primary cause of the injury or including spraying,
damage; or generators, building
welding, cleaning,
(2) Under which the geophysical exploration, lighting and architect, engineer well servicing equipment; or
assumes liability for an injury or (2) Cherry pickers and similar devices damage arising out of the insured's used to raise or lower workers; rendering or
professional services, including those f. Vehicles not described in a., b., c., or d. listed in (1) above and supervisory, above maintained primarily for purposes inspection, architectural other than the transportation of persons or engineering activities. cargo.

13. "Leased worker" means a person leased to However, self-propelled vehicles with the you by a labor leasing firm under an following types of permanently attached agreement between you and the labor leasing equipment are not "mobile equipment" but firm, to perform duties related to the conduct of will be considered "autos":
your business. "Leased worker" does not (1) Equipment, of at least 1,000 pounds include a "temporary worker". gross vehicle weight, designed

14. "Loading or unloading" means the handling of primarily for:
property: (a) Snow removal;
a. After it is moved from the place where it is (b) Road maintenance, but not accepted for movement into or onto an construction or resurfacing; or aircraft, watercraft or "auto"; (c) Street cleaning;
b. While it is in or on an aircraft, watercraft or (2) Cherry pickers and similar devices "auto"; or mounted on automobile or truck
c. While it is being moved from an aircraft, chassis and used to raise or lower watercraft or "auto" to the place where it is workers; and finally delivered; (3) Air compressors, pumps and
but "loading or unloading" does not include the generators, including spraying, movement of property by means of a mechanical welding, building cleaning, levice, other than a hand truck, that is no geophysical exploration, lighting and attached to the aircraft, watercraft or "auto". wateran or tat is not well servicing equipment.

15. "Mobile equipment" means any of the following 16. "Occurrence" means an accident, including ypes of land vehicles, including any attached continuous or repeated exposure to substantiall machinery or equipment: he same general harmful conditions. a. Bulldozers, farm machinery, forklifts and 17. "Personal and advertising injury" means injury, other vehicles designed for use principally including consequential "bodily injury", arising off public roads; out of one or more of the following offenses:
b. Vehicles maintained for use solely on or a. False arrest, detention or imprisonment; next to premises you own or rent; b. Malicious prosecution; c. Vehicles that travel on crawler treads;
d. Vehicles, whether self-propelled or not, on
which are permanently mounted:

Page 22 of 24 ends

BUSINESS LIABILITY COVERAGE FORM
c. The wrongful eviction from, wrongful entry Work that may need service, maintenance, into, or invasion of the right of private correction, repair or replacement, but occupancy of a room, dwelling or which is otherwise complete, will be premises that the person occupies, treated as completed. committed by or on behalf of its owner,
The "bodily injury" or "property damage"
landlord or lessor; must occur away from premises you own d. Oral, written or electronic publication of or rent, unless your business includes the material that slanders or libels a person or selling, handling or distribution of your organization or disparages a person's or product" for consumption on premises you organization's goods, products or services; own or rent. e. Oral, written or electronic publication of b. Does not include "bodily injury" or material that violates a person's right of "property damage" arising out of:
privacy; (1) The transportation of property, unless
f. Copying, in your "advertisement", the injury or damage arises out of a person's or organization's "advertising condition in or on a vehicle not owned idea" or style of "advertisement"; or operated by you, and that condition g. Infringement of copyright, slogan, or title of was created by the "loading or any literary or artistic work, in your unloading" of that vehicle by any "advertisement"; or insured; or
h. Discrimination or humiliation that results in (2) The existence of tools, uninstalled injury to the feelings or reputation of a equipment or abandoned or unused natural person. materials.

18. "Pollutants" means any solid, liquid, gaseous or 20. "Property damage" means:
thermal irritant or contaminant, including smoke, a. Physical injury to tangible property, vapor, soot, fumes, acids, alkalis, chemicals and including all resulting loss of use of that waste. Waste includes materials to be recycled, property. All such loss of use shall be reconditioned or reclaimed. deemed to occur at the time of the

19. "Products-completed operations hazard"; physical injury that caused it; or a. Includes all "bodily injury" and "property b. Loss of use of tangible property that is not damage" occurring away from premises physically injured. All such loss of use you own or rent and arising out of "your shall be deemed to occur at the time of product" or "your work" except: "occurrence" that caused it. (1) Products that are still in your physical As used in this definition, "electronic data" is possession; or not tangible property.
(2) Work that has not yet been completed 21. "Suit" means a civil proceeding in which or abandoned. However, "your work" damages because of "bodily injury", "property will be deemed to be completed at the damage" or "personal and advertising injury" earliest of the following times: to which this insurance applies are alleged. (a) When all of the work called for in "Suit" includes:
your contract has been completed. a. An arbitration proceeding in which such (b) When all of the work to be done at Insured must suit or does submit with the job site has been completed if
your contract calls for work at our consent; or
more than one job site. b. Any other alternative dispute resolution (c) When that part of the work done at proceeding in which such damages are a job site has been put to its claimed and to which the insured submits with our consent.

22. "Temporary worker" means a person who is
or furnished to you to substitute for a permanent
working on the same project. "employee" on leave or to meet seasonal or short-term workload conditions.

23. "Volunteer worker" means a person who:
a. Is not your "employee";
Form SS 00 08 04 05 Page 23 of 24

BUSINESS LIABILITY COVERAGE FORM
b. Donates his or her work; (2) The providing of or failure to provide c. Acts at the direction of and within the warnings or instructions. scope of duties determined by you; and c. Does not include vending machines or d. Is not paid a fee, salary or other other property rented to or located for the compensation by you or anyone else for use of others but not sold. their work performed for you. 25. "Your work":

24. "Your product": a. Means:
a. Means: (1) Work or operations performed by you
(1) Any goods or products, other than real or on your behalf; and property, manufactured, sold, handled, (2) Materials, parts or equipment distributed or disposed of by: furnished in connection with such work (a) You; or operations.
(b) Others trading under your name; b. Includes:
(1) Warranties or representations made at
(c) A person or organization whose any time with respect to the fitness, business or assets you have quality, durability, performance or use acquired; and of "your work"; and
2) Containers (other than vehicles), (2) The providing of or failure to provide materials, equipment warnings or instructions.
furnished in connection with such
goods or products.
b. Includes:
(1) Warranties or representations made at
any time with respect to the fitness,
quality, durability, performance or use
of "your product"; and

Page 24 of 24 ends

Mayor and City CouncilJune 5, 2024

Mayor and City Council
June 5, 2024