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26-085 Vasquez & Company LLP Service Business for Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services (2)
Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 1 of 9 Professional/Consulting Contracts /Version: March 2025 PROFESSIONAL/CONSULTING SERVICES AGREEMENT 1. PARTIES This Agreement is made by and between the City of Cupertino, a municipal corporation (“City”), and Vasquez & Company LLP (“Contractor”), a Service Business for Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services, and is effective on the last date signed below (“Effective Date”). 2. SERVICES 2.1 Contractor agrees to provide the services and perform the tasks (“Services”) set forth in detail in Scope of Services, attached here and incorporated as Exhibit A. Contractor further agrees to carry out its work in compliance with any applicable local, State, or Federal order regarding COVID-19. 2.2 Contractor’s duties and services under this agreement shall not include preparing or assisting the City with any portion of the City’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with the City. The City shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. Contractor’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. Contractor shall cooperate with the City to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by contractor pursuant to this agreement. 2.3 The quality and sufficiency of Contractor’s professional work shall be measured by this professional standard of care and by compliance with applicable auditing standards (GAAS and GAGAS), and not by the subjective satisfaction of the City. The City may review deliverables for completeness and conformity with the agreed-upon scope (Exhibit A); however, the City shall not direct, approve, or exercise control over the auditor’s professional judgements, audit methodology, findings, conclusions, or the content of audit reports. 3. TIME OF PERFORMANCE 3.1 This Agreement begins on the Effective Date and ends on August 15, 2026 (“Contract Time”), unless terminated earlier as provided herein. The City’s appropriate department head or City Manager may extend the Contract Time through a written amendment to this Agreement, provided such extension does not include additional contract funds. Extensions requiring additional contract funds are subject to the City’s purchasing policy. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 2 of 9 Professional/Consulting Contracts /Version: March 2025 3.2 Schedule of Performance. Contractor must deliver the Services in accordance with the Schedule of Performance, attached and incorporated here Exhibit B. 3.3 Time is of the essence for the performance of all the Services. Contractor must have sufficient time, resources, and qualified staff to deliver the Services on time. 4. COMPENSATION 4.1 Maximum Compensation. City will pay Contractor for satisfactory performance of the Services an amount that will based on actual costs but that will be capped so as not to exceed $35,000 (“Contract Price”), based upon the scope of services in Exhibit A and the budget and rates included in Exhibit C, Compensation attached and incorporated here. The maximum compensation includes all expenses and reimbursements and will remain in place even if Contractor’s actual costs exceed the capped amount. No extra work or payment is permitted without prior written approval of City. 4.2 Invoices and Payments. Monthly invoices must state a description of the deliverable completed and the amount due for the preceding month. Within thirty (30) days of completion of Services, Contractor must submit a requisition for final and complete payment of costs and pending claims for City approval. Failure to timely submit a complete and accurate payment requisition relieves City of any further payment or other obligations under the Agreement. 5. INDEPENDENT CONTRACTOR 5.1 Status. Contractor is an independent contractor and not an employee, partner, or joint venture of City. Contractor is solely responsible for the means and methods of performing the Services and for the persons hired to work under this Agreement. Contractor is not entitled to health benefits, worker’s compensation, or other benefits from the City. 5.2 Contractor’s Qualifications. Contractor warrants on behalf of itself and its subcontractors that they have the qualifications and skills to perform the Services in a competent and professional manner and according to the highest standards and best practices in the industry. 5.3 Permits and Licenses. Contractor warrants on behalf of itself and its subcontractors that they are properly licensed, registered, and/or certified to perform the Services as required by law and have procured a City Business License, if required by the Cupertino Municipal Code. 5.4 Subcontractors. Only Contractor’s employees are authorized to work under this Agreement. Prior written approval from City is required for any subcontractor, and the terms and conditions of this Agreement will apply to any approved subcontractor. 5.5 Tools, Materials, and Equipment. Contractor will supply all tools, materials and equipment required to perform the Services under this Agreement. 5.6 Payment of Benefits and Taxes. Contractor is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. Contractor and any of its employees, agents, and subcontractors shall not have any claim under this Agreement or Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 3 of 9 Professional/Consulting Contracts /Version: March 2025 otherwise against City for seniority, vacation time, vacation pay, sick leave, personal time off, overtime, health insurance, medical care, hospital care, insurance benefits, social security, disability, unemployment, workers compensation or employee benefits of any kind. Contractor shall be solely liable for and obligated to pay directly all applicable taxes, fees, contributions, or charges applicable to Contractor’s business including, but not limited to, federal and state income taxes. City shall have no obligation whatsoever to pay or withhold any taxes or benefits on behalf of Contractor. In the event that Contractor or any employee, agent, or subcontractor of Contractor providing services under this Agreement is determined by a court of competent jurisdiction, arbitrator, or administrative authority, including but not limited to the California Public Employees Retirement System (PER S) to be eligible for enrollment in PERS as an employee of City, Contractor shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Contractor or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the r esponsibility of City, and actual attorney’s fees incurred by City in connection with the above. 6. PROPRIETARY/CONFIDENTIAL INFORMATION In performing this Agreement, Contractor may have access to private or confidential information owned or controlled by the City, which may contain proprietary or confidential details the disclosure of which to third parties may be damaging to City. Contractor shall hold in confidence all City information provided by City to Contractor and use it only to perform this Agreem ent. Contractor shall exercise the same standard of care to protect City information as a reasonably prudent contractor would use to protect its own proprietary data. 7. OWNERSHIP OF MATERIALS 7.1 Property Rights. Any interest (including copyright interests) of Contractor in any product, memoranda, study, report, map, plan, drawing, specification, data, record, document, or other information or work, in any medium (collectively, “Work Product”), prepared by Contractor in connection with this Agreement will be the exclusive property of the City upon completion of the work to be performed hereunder or upon termination of this Agreement, to the extent requested by City. In any case, no Work Product shall be shown to any third-party without prior written approval of City. 7.2 Copyright. To the extent permitted by Title 17 of the U.S. Code, all Work Product arising out of this Agreement is considered “works for hire” and all copyrights to the Work Product will be the property of City. Alternatively, Contractor assigns to City all Work Product copyrights. Contractor may use copies of the Work Product for promotion only with City’s written approval. 7.3 Patents and Licenses. Contractor must pay royalties or license fees required for authorized use of any third party intellectual property, including but not limited to patented, trademarked, or copyrighted intellectual property if incorporated into the Services or Work Product of this Agreement. 7.4 Re-Use of Work Product. Unless prohibited by law and without waiving any rights, City may use or modify the Work Product of Contractor or its sub-contractors prepared or created under this Agreement, to execute or implement any of the following: Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 4 of 9 Professional/Consulting Contracts /Version: March 2025 (a) The original Services for which Contractor was hired; (b) Completion of the original Services by others; (c) Subsequent additions to the original Services; and/or (d) Other City projects. 7.5 Deliverables and Format. Contractor must provide electronic and hard copies of the Work Product, on recycled paper and copied on both sides, except for one single-sided original. 7.6 Notwithstanding the foregoing, audit workpapers, including but not limited to computations, analyses, memoranda, correspondence, and other records prepared by contractor in connection with the audit engagement and in accordance with auditing standards, shall remain the sole property of contractor. Contractor shall retain such workpapers for a minimum of seven (7) years in accordance with professional standards and California Business and Professions Code Section 5097. The City shall have access to such workpapers upon reasonable written request, subject to applicable professional standards. Nothing herein shall restrict contractor from providing workpapers to its professional peer reviewers, regulatory bodies, successor auditors, or other parties as required or permitted by professional auditing standards, Government Auditing Standards, or applicable law. Audit workpapers shall be made available to authorized representatives of the City upon reasonable written request and at mutually convenient times, subject to the confidentiality requirements of professional auditing standards. Nothing in this section shall be construed to transfer ownership of audit workpapers to the City or to restrict contractor’s ability to comply with professional standards regarding workpaper access by peer reviewers, regulators, or successor auditors. The City shall own the final deliverables identified in the Scope (e.g., auditors’ reports and management letter) in the form issued, and contractor grants the City a perpetual, nonexclusive, royalty-free license to use and reproduce such final deliverables for internal and statutory purposes. 8. RECORDS Contractor must maintain complete and accurate accounting records relating to its performance in accordance with generally accepted accounting principles. The records must include detailed information of Contractor’s performance, benchmarks and deliverables, which must be available to City for review and audit. The records and supporting documents must be kept separate from other records and must be maintained for four (4) years from the date of City’s final payment. Contractor acknowledges that certain documents generated or received by Contractor in connection with the performance of this Agreement, including but not limited to correspondence between Contractor and any third party, are public records under the California Public Records Act, California Government Code section 6250 et seq. Contractor shall comply with all laws regarding the retention of public records and shall make such records available to the City upon request by the City, or in such manner as the City reasonably directs that such records be provided. 9. ASSIGNMENT Contractor shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of City. Any attempt to do so will be null and void. Any changes related to the financial control or Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 5 of 9 Professional/Consulting Contracts /Version: March 2025 business nature of Contractor as a legal entity is considered an assignment of the Agreement and subject to City approval, which shall not be unreasonably withheld. Control means fifty percent (50%) or more of the voting power of the business entity. 10. PUBLICITY / SIGNS Any publicity generated by Contractor for the project under this Agreement, during the term of this Agreement and for one year thereafter, will reference the City’s contributions in making the project possible. The words “City of Cupertino” will be displayed in all pieces of publicity, including flyers, press releases, posters, brochures, public service announcements, interviews and newspaper articles. No signs may be posted, exhibited or displayed on or about City property, except signage required by law or this Contract, without prior written approval from the City. 11. INDEMNIFICATION 11.1 To the fullest extent allowed by law, and except for losses caused by the sole and active negligence or willful misconduct of City personnel, Contractor shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, officials, employees, agents, servants, volunteers, and consultants (“Indemnitees”), through legal counsel acceptable to City, from and against any and all liability, damages, claims, actions, causes of action, demands, charges, losses, costs, and expenses (including attorney fees, legal costs, and expenses related to litigation and dispute resolution proceedings) of every natur e, arising directly or indirectly from this Agreement or in any manner relating to any of the following: (a) Breach of contract, obligations, representations, or warranties; (b) Negligent or willful acts or omissions committed during performance of the Services; (c) Personal injury, property damage, or economic loss resulting from the work or performance of Contractor or its subcontractors or sub-subcontractors; (d) Unauthorized use or disclosure of City’s confidential and proprietary Information; (e) Claim of infringement or violation of a U.S. patent or copyright, trade secret, trademark, or service mark or other proprietary or intellectual property rights of any third party. 11.2 Contractor must pay the costs City incurs in enforcing this provision. Contractor must accept a tender of defense upon receiving notice from City of a third-party claim. At City’s request, Contractor will assist City in the defense of a claim, dispute, or lawsuit arising out of this Agreement. 11.3 Contractor’s duties under this section are not limited to the Contract Price, workers’ compensation payments, or the insurance or bond amounts required in the Agreement. Nothing in the Agreement shall be construed to give rise to an implied right of indemnity in favor of Contractor against City or any Indemnitee. 11.4 Contractor’s payments may be deducted or offset to cover any money the City lost due to a claim or counterclaim arising out of this Agreement, or a purchase order, or other transaction. 11.5 Contractor agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Section 11 from each and every subcontractor, or any other person or entity involved by, for, with, or on behalf of Contractor in the performance of this Agreement. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 6 of 9 Professional/Consulting Contracts /Version: March 2025 Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. 11.6 This Section 11 shall survive termination of the Agreement. 12. INSURANCE Contractor shall comply with the Insurance Requirements, attached and incorporated here as Exhibit D, and must maintain the insurance for the duration of the Agreement, or longer as required by City. City will not execute the Agreement until City approves receipt of satisfactory certificates of insurance and endorsements evidencing the type, amount, class of operations covered, and the effective and expiration dates of coverage. Failure to comply with this provision may result in City, at its sole discretion and without notice, purchasing insurance for Contractor and deducting the costs from Contractor’s compensation or terminating the Agreement. 13. COMPLIANCE WITH LAWS 13.1 General Laws. Contractor shall comply with all local, state, and federal laws and regulations applicable to this Agreement. Contractor will promptly notify City of changes in the law or other conditions that may affect the Project or Contractor’s ability to perform. Contractor is responsible for verifying the employment authorization of employees performing the Services, as required by the Immigration Reform and Control Act. 13.2 Labor Laws. Contractor shall comply with all labor laws applicable to this Agreement. If the Scope of Services includes a “public works” component, Contractor is required to comply with prevailing wage laws under Labor Code Section 1720 and other labor laws. 13.3 Discrimination Laws. Contractor shall not discriminate on the basis of race, religious creed, color, ancestry, national origin, ethnicity, handicap, disability, marital status, pregnancy, age, sex, gender, sexual orientation, gender identity, Acquired-Immune Deficiency Syndrome (AIDS), or any other protected classification. Contractor shall comply with all anti-discrimination laws, including Government Code Sections 12900 and 11135, and Labor Code Sections 1735, 1777, and 3077.5. Consistent with City policy prohibiting harassment and discrimination, Contractor understands that harassment and discrimination directed toward a job applicant, an employee, a City employee, or any other person, by Contractor or its employees or sub-contractors will not be tolerated. Contractor agrees to provide records and documentation to the City on request necessary to monitor compliance with this provision. 13.4 Conflicts of Interest. Contractor shall comply with all conflict of interest laws applicable to this Agreement and must avoid any conflict of interest. Contractor warrants that no public official, employee, or member of a City board or commission who might have been i nvolved in the making of this Agreement, has or will receive a direct or indirect financial interest in this Agreement, in violation of California Government Code Section 1090 et seq. Contractor may be required to file a conflict of interest form if Contractor makes certain governmental decisions or serves in a staff capacity, as defined in Section 18700 of Title 2 of the California Code of Regulations. Contractor agrees to abide by the City’s rules governing gifts to public officials and employees. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 7 of 9 Professional/Consulting Contracts /Version: March 2025 13.5 Remedies. Any violation of Section 13 constitutes a material breach and may result in City suspending payments, requiring reimbursements or terminating this Agreement. City reserves all other rights and remedies available under the law and this Agreement, including the right to seek indemnification under Section 11 of this Agreement. 14. PROJECT COORDINATION City Project Manager. The City assigns Jonathan Orozco as the City’s representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. City reserves the right to substitute another Project manager at any time, and without prior notice to Contractor. Contractor Project Manager. Subject to City approval, Contractor assigns Cristy Canieda as its single Representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. Contractor’s Project manager is responsible for coordinating and scheduling the Services in accordance with the Scope of Services and the Schedule of Performance. Contractor must regularly update the City’s Project Manager about the progress with the work or any delays, as required under the Scope of Services. City written approval is required prior to substituting a new Representative. The City may raise reasonable objections within ten (10) business days of such notice; however, final staffing decisions, including the designation of the Responsible Principal, shall remain with contractor to preserve auditor independence under Auditing Standards. Contractor shall ensure that any replacement Responsible Principal possesses qualifications and experience comparable to the individual being replaced. 15. ABANDONMENT OF PROJECT City may abandon or postpone the Project or parts therefor at any time. Contractor will be compensated for satisfactory Services performed through the date of abandonment, and will be given reasonable time to assemble the work and close out the Services. With City’s pre-approval in writing, the time spent in closing out the Services will be compensated up to a maximum of ten percent (10%) of the total time expended to date in the performance of the Services. 16. TERMINATION City may terminate this Agreement for cause or without cause at any time. Contractor will be paid for satisfactory Services rendered through the date of termination, but final payment will not be made until Contractor closes out the Services and delivers the Work Product. Contractor may also terminate this Agreement if conditions arise that would impair its independence under AICPA Auditing Standards, or if the City fails to provide access to records or personnel necessary to complete the audit after written notice and a reasonable cure period. Upon receipt of termination notice, contractor shall cease all work on or before the effective date of termination, except for work reasonably necessary to preserve the integrity of work in progress. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 8 of 9 Professional/Consulting Contracts /Version: March 2025 17. GOVERNING LAW, VENUE, AND DISPUTE RESOLUTION This Agreement is governed by the laws of the State of California. Any lawsuits filed related to this Agreement must be filed with the Superior Court for the County of Santa Clara, State of California. Contractor must comply with the claims filing requirements under the Government Code prior to filing a civil action in court. If a dispute arises, Contractor must continue to provide the Services pending resolution of the dispute. If the Parties elect arbitration, the arbitrator’s award must be supported by law and substantial evidence and include detailed written findings of law and fact. 18. ATTORNEY FEES If City initiates legal action, files a complaint or cross-complaint, or pursues arbitration, appeal, or other proceedings to enforce its rights or a judgment in connection with this Agreement, the prevailing party will be entitled to reasonable attorney fees and costs. 19. THIRD PARTY BENEFICIARIES There are no intended third party beneficiaries of this Agreement. 20. WAIVER Neither acceptance of the Services nor payment thereof shall constitute a waiver of any contract provision. City’s waiver of a breach shall not constitute waiver of another provision or breach. 21. ENTIRE AGREEMENT This Agreement represents the full and complete understanding of every kind or nature between the Parties, and supersedes any other agreement(s) and understanding(s), either oral or written, between the Parties. Any modification of this Agreement will be effective only if in writing and signed by each Party’s authorized representative. No verbal agreement or implied covenant will be valid to amend or abridge this Agreement. If there is any inconsistency between any term, clause, or provision of the main Agreement and any term, clause, or provision of the attachments or exhibits thereto, the terms of the main Agreement shall prevail and be controlling. 22. INSERTED PROVISIONS Each provision and clause required by law for this Agreement is deemed to be included and will be inferred herein. Either party may request an amendment to cure mistaken insertions or omissions of required provisions. The Parties will collaborate to implement this Section, as appropriate. 23. HEADINGS The headings in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit, or amplify the terms or provisions of this Agreement. 24. SEVERABILITY/PARTIAL INVALIDITY Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 9 of 9 Professional/Consulting Contracts /Version: March 2025 If any term or provision of this Agreement, or their application to a particular situation, is found by the court to be void, invalid, illegal, or unenforceable, such term or provision shall remain in force and effect to the extent allowed by such ruling. All other terms and provisions of this Agreement or their application to specific situations shall remain in full force and effect. The Parties agree to work in good faith to amend this Agreement to carry out its intent. 25. SURVIVAL All provisions which by their nature must continue after the Agreement expires or is terminated, including the Indemnification, Ownership of Materials/Work Product, Records, Governing Law, and Attorney Fees, shall survive the Agreement and remain in full force and effect. Professional Communications and Regulatory Compliance: Notwithstanding any other provision of this Agreement, Contractor shall be permitted, without prior City approval, to communicate with and provide information to: (a) federal, state, or local regulatory and oversight bodies, including but not limited to the California Board of Accountancy and the State Controller’s Office; (b) Contractor’s professional peer reviewers in connection with quality control reviews required by professional standards; (c) successor auditors, in accordance with AU-C Section 210 and Government Auditing Standards; and (d) any other parties as required or permitted by professional auditing standards, Government Auditing Standards, or applicable law. Contractor shall maintain the confidentiality of the City’s non-public financial information and shall not disclose such information to unauthorized third parties except as required by the foregoing professional and legal obligations. 26. NOTICES All notices, requests and approvals must be sent in writing to the persons below, which will be considered effective on the date of personal delivery or the date confirmed by a reputable overnight delivery service, on the fifth calendar day after deposit in the United States Mail, postage prepaid, registered or certified, or the next business day following electronic submission: To City of Cupertino Office of the City Manager 10300 Torre Ave. Cupertino, CA 95014 Attention: Jonathan Orozco Email: jonathano@cupertino.gov To Contractor: Vasquez & Company LLP 655 N. Central Avenue Ste. 1550 Glendale, CA 91203 Attention: Cristy Canieda Email: c_canieda@vasquezcpa.com 27. EXECUTION The person executing this Agreement on behalf of Contractor represents and warrants that Contractor has full right, power, and authority to enter into and carry out all actions contemplated Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 10 of 9 Professional/Consulting Contracts /Version: March 2025 by this Agreement and that he or she is authorized to execute this Agreement, which constitutes a legally binding obligation of Contractor. This Agreement may be executed in counterparts, each one of which is deemed an original and all of which, taken together, constitute a single b inding instrument. IN WITNESS WHEREOF, the parties have caused the Agreement to be executed. CITY OF CUPERTINO CONTRACTOR A Municipal Corporation By By Name Jonathan Orozco Name Cristy Canieda Title Acting Director of Administrative Services Title Audit Partner Date Date APPROVED AS TO FORM: MICHAEL K. WOO Senior Assistant City Attorney ATTEST: LAUREN SAPUDAR City Clerk Date 06/05/202606/05/2026 Jennifer Woodworth for 06/05/2026 City of Cupertino Proposal to Provide Professional Services 12 Exhibit A - Scope of Work Objective To evaluate whether costs charged to cities under county sheriff department contracts represent only the actual and reasonable costs incurred to provide public safety protection and related services, and whether general county overhead or countywide services prohibited by Government Code §51350 have been excluded from billings. Key §51350 Considerations Unique to Sheriff Services Sherrif contracts present heightened risk under §51350 because they often involve: •Use of a regional policing model (shared stations, patrol areas) •Allocation of “contract law enforcement overhead” •Inclusion of command staff and headquarters functions •Countywide services such as: o Dispatch (911 centers) o Specialized units (SWAT, air support, homicide) o Jail and custody operations (often improperly included) •Capital-intensive assets (stations, apparatus, equipment) The review must therefore distinguish between costs that support the contracted City directly and those that support the countywide law enforcement infrastructure and governance. Phase 1 – Service Model + Allowability Establish how sheriff services are delivered to the City, identify what costs are attributable to city service delivery, and test whether prohibited countywide/general overhead is being billed. Step 1 - Understand the Sheriff Service Delivery Model Procedures Obtain and review: •Sheriff/police service contract(s) •Staffing plans (deputy levels, supervision ratios) •Patrol area maps and station assignments •Description of included services (patrol, traffic, detectives, specialized units) Evaluation Focus Determine: •Whether the City is paying for: a.Dedicated personnel, or b.A share of a regional policing system •Which services are baseline vs. optional (add-on) Step 2 – Test Direct Law Enforcement Costs Procedures For selected contracts: •Trace direct costs to: o Payroll (deputy, sergeant, lieutenant assigned to the City) o Overtime records (City-specific events, coverage) o Equipment, vehicles, and supplies assigned to city use City of Cupertino Proposal to Provide Professional Services 13 Evaluation Criteria •Direct patrol and investigative costs attributable to the City are allowable •Costs must be: o Actually incurred o Clearly linked to service delivery within the City •Unsupported “average cost per deputy” without reconciliation to actuals is a risk indicator Step 3 – Evaluate Patrol and Station-Level Cost Allocation Procedures •Identify the station(s) serving the City •Review: o Staffing allocations by shift o Call-for-service data by jurisdiction o Time studies or workload metrics Evaluation Criteria •If a station serves multiple jurisdictions: o Costs must be allocated based on actual service usage (e.g., calls, workload, or time) •Charging a city for: o Unused patrol capacity o Coverage for other jurisdictions creates §51350 exposure Step 4 – Scrutinize “Contract Law Enforcement Overhead” High-Risk Cost Pools •Division chiefs and area commanders •Administrative bureaus •Planning, policy, and executive management •Internal affairs, legal support, media relations Procedures For each overhead component: 1.Determine whether the function: o Supports day-to-day policing of the City, or o Supports the Sheriff’s Department as a whole 2.Evaluate allocation basis: o Per deputy o Percentage add-on o Flat overhead rate Evaluation Criteria •Allowable: Supervision and support necessary to deliver city policing •Not allowable: o General department leadership and governance o Systemwide administrative functions that exist regardless of city contracts Per §51350, costs that would exist even without the contract are general overhead and prohibited. City of Cupertino Proposal to Provide Professional Services 14 Step 5 – Reconcile to CAP and Financial Records Procedures •Trace billed costs back to: o Countywide CAP allocations o Sheriff department financial records •Identify adjustments made to remove: o General county overhead o Non-contract functions Evaluation Criteria •CAP-derived costs must be adjusted for §51350 compliance •Failure to adjust = common root cause of overbilling Step 6 – Evaluate Transparency and Contract Support Procedures Assess whether the City is provided with: •Detailed cost breakdowns (not just % overhead) •Staffing models and assumptions •Allocation methodologies for shared services •Explicit exclusions of general overhead Evaluation Criteria •Lack of transparency is a key risk indicator •§51350 compliance is difficult to demonstrate without clear, supportable schedules Reporting Considerations (Sheriff-Specific) Clearly conclude whether: •Patrol and investigative costs are properly supported and attributable to the City •Overhead charges include prohibited general department or countywide costs •Shared services (dispatch, air support, specialized units) are allocated on a reasonable and supportable basis •Adjustments to CAP-derived costs are sufficient for §51350 compliance Common §51350 Findings in Sheriff Contracts From an audit perspective, the most frequent issues are: •Inclusion of department-wide administrative overhead •Allocation of command staff not tied to city operations •Charging for systemwide readiness (e.g., helicopters, SWAT) without usage basis •Use of blended overhead rates without transparency •Failure to distinguish CAP-allowable vs. §51350-allowable costs Exhibit B - Timeframe The engagement may be scheduled to occur from June through the end of July. Completion is contingent upon a timely engagement start and timely access to, as well as the availability of, information from the County. City of Cupertino Proposal to Provide Professional Services 15 Exhibit C - Proposed Fee Our fees for the services outlined in this proposal are based on the assumption that unexpected circumstances will not be encountered during the engagement, along with the following: 1.City and County staff are available to answer questions within the agreed timeframe. 2.No instances of fraud that will require additional procedures. 3.All information requested is provided within the agreed timeframe. 4.The information provided is complete. 5.The City and the County will provide documentation electronically. 6.Other unforeseen events. We will bill the City based on the actual hours worked on the project at the following hourly rates, not to exceed a total of $35,000. Personnel Category Hourly Rates Partner $ 300 Director 250 Sr. Manager 225 Manager 200 Supervisor 175 Senior 150 Staff 120 www.vasquez.cpa Vasquez & Company LLP has over 55 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. 06/02/2026 The Liberty Company Insurance Brokers Lic #0D79653 5955 De Soto Ave, Ste 250 Woodland Hills CA 91367 Kelle Kelley (888) 918-3960 Kelle.Kelley@libertycompany.com Vasquez & Company Llp 655 N Central Ave Ste 1550 Glendale CA 91203 Allmerica Financial Benefit Insurance Co 41840 26-27 COIs KK signature A Y Y Z2FH550106 04/01/2026 04/01/2027 2,000,000 1,000,000 10,000 2,000,000 4,000,000 included Business Interruption included A Y Y Z2FH550106 04/01/2026 04/01/2027 2,000,000 A Z2FH550106 04/01/2026 04/01/2027 5,000,000 5,000,000 A Business Personal Property Z2FH550106 04/01/2026 04/01/2027 Replacement Cost Limit $297,200 Deductible $1,000 The City of Cupertino, its City Council, officers, officials, employees, agents, and volunteers are included as an Additional Insureds under the Commercial General Liability and Auto Liability on a Primary/Non-Contributory basis when required by written contract. A Waiver of Subrogation in favor of the Additional Insureds applies to the General Liability and Auto Liability when required by written contract. City of Cupertino 10300 Torre Ave nue Cupertino CA 95014 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD 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. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY Waiver of Subrogation WVSUB $13.00 Umbrella(C)CUMBR ADDITIONAL COVERAGES Ref #Description Edition DateForm No.Coverage Code Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Copyright 2001, AMS Services, Inc.OFADTLCV Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 1 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. SMALL COMMERCIAL LIABILITY COMPANION ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SUMMARY OF COVERAGES Page SECTION I – ADDITIONAL INSURED PROVISIONS 2 A. Automatic Additional Insured Provisions Including Primary and Non-contributory 2 4. Additional Insureds 2 a. Broad Form Vendors 3 b. Co-owner of Insured Premises 3 c. Controlling Interest 3 d. Mortgagee, Assignee, or Receiver 4 e. Grantor of Franchise 4 f. Lessor of Leased Equipment 4 g. Manager or Lessor of Premises 4 B. Additional Insured by Contract, Agreement or Permit With Completed Operations and Primary and Non-contributory 4 1. SECTION II – COVERAGE EXTENSIONS 5 A. Supplementary Payments Extension 5 B. Alienated Premises 5 C. Broad Form Property Damage Legal Liability 6 D. Broad Form Property Damage – Borrowed Equipment, Customers’ Goods, Use of Elevators 6 E. Incidental Malpractice – Employed Nurses, EMT’s and Paramedics 6 F. Personal and Advertising Injury – Broad Form 6 G. Product Recall Expense Product Recall Expense Each Occurrence Limit $25,000 Product Recall Expense Aggregate Limit $50,000 Product Recall Deductible $500 6 H. Who is an Insured Amended “Employees” Redefined Subsidiaries Newly Acquired or Formed Organizations – 180 Days 8 I. Limits of Insurance Amended: Aggregate Limits of Insurance Per Location Products-Completed Operations Aggregate – Twice the Each Occurrence Limit 9 J. Blanket Waiver of Subrogation 9 K. Unintentional Failure to Disclose Hazards 9 L. Unintentional Failure to Notify/Knowledge of an Occurrence 9 M. Medical Expenses – Three Years to Report 9 Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 2 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. SECTION III – ADDITIONAL CONDITIONS 9 A. Liberalization 9 B. Concealment, Misrepresentation or Fraud 10 C. Insurance Under Two or More Coverages 10 SECTION IV – EXCLUSIONS 10 A. Coverage A – Bodily Injury and Property Damage Liability and Coverage B – Personal and Advertising Injury Exclusions 10 Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability 10 Aircraft Products, Grounding and Testing 10 Professional Services 11 Unmanned Aircraft 11 B. Coverage A – Bodily Injury and Property Damage and Coverage C – Medical Payments Exclusions 12 Nuclear Energy Liability 12 C. Amended Exclusion With Coverage Extension 13 Aircraft (Other Than Unmanned Aircraft), Auto or Watercraft 13 SECTION V – AMENDED DEFINITIONS 13 “Bodily Injury”14 “Products – Completed Operations Hazard”14 “Property Damage”14 SECTION I – ADDITIONAL INSURED PROVISIONS A. Automatic Additional Insured Provisions Including Primary and Non-contributory: 1. SECTION II – WHO IS AN INSURED is amended to include as an insured any person or organization described in paragraphs 4.a through 4.g. below, whom you agree to add as an Additional Insured. 2.However, the insurance afforded to such Additional Insured described below: a.Only applies to the extent permitted by law. b.Will not be broader than the insurance which you are required by the written contract, agreement or permit, if any, to provide for such additional insured. c.Applies on a primary basis and we will not seek contribution from any other insurance available to the Additional Insured, if that is required by an applicable written contract, agreement or permit. d.Will not be broader than coverage provided to any other insured. e.Does not apply if the “bodily injury”, “property damage” or “personal and advertising injury” is otherwise excluded from coverage under this Coverage Part, including any endorsements thereto. f.Does not apply to any person or organization included as an insured by another endorsement issued by us and made part of this Coverage Part. 3.The most we will pay on behalf of the Additional Insured for a covered claim is the lesser of the amount of insurance: a.Required by the applicable written contract, agreement or permit, if any; or b.Available under the applicable Limits of Insurance shown in the Declarations or any endorsement to the policy. 4. Additional Insureds The following persons or organizations qualify as additional insureds under this endorsement: Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 3 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. The following is added to SECTION II – WHO IS AN INSURED: a. Broad Form Vendors (1)Any person or organization that is a vendor with whom you agreed in a written contract or agreement to include as an additional insured under this Coverage Part is an insured, but only with respect to liability for “bodily injury” or “property damage” arising out of “your products” which are distributed or sold in the regular course of the vendor’s business. (2)With respect to insurance afforded to such vendors, the following additional exclusions apply: The insurance afforded to the vendor does not apply to: (a)“Bodily injury” or “property damage” for which the vendor is obligated to pay damages by reasons of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the insured would have in the absence of the contract or agreement; (b)Any express warranty unauthorized by you; (c)Any physical or chemical change in the product made intentionally by the vendor; (d)Repackaging, unless unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instruction from the manufacturer, and then repackaged in the original container; (e)Any failure to make such inspection, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business in connection with the sale of the product; (f)Demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; (g)Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; (h)“Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (i)The exceptions contained within the exclusion in paragraphs (d) or (f) above; or (ii)Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. (i)“Bodily injury” or “property damage” arising out of an “occurrence” that took place before you have signed the contract or agreement with the vendor. (j)Any insured person or organization, from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products. b. Co-owner of Insured Premises Any person or organization who is a co- owner of premises described in the declarations. Such person(s) or organization(s) is an insured only with respect to their liability as co-owner of the co-owned premises. c. Controlling Interest Any person or organization that has a majority controlling interest in you, but only with respect to their liability arising out of: (1)Their financial control of you; or (2)Premises they own, maintain or control while you lease or occupy these premises. This insurance does not apply to structural alterations, new construction and demolition operations performed by or for such additional insured. d. Mortgagee, Assignee, or Receiver Any mortgagee, assignee or receiver, but only with respect to their liability as Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 4 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. mortgagee, assignee, or receiver and arising out of the ownership, maintenance or use of a premises by you. This insurance does not apply to structural alterations, new construction or demolition operations performed by or for such additional insured. e. Grantor of Franchise Any person or organization who is a grantor of a franchise to you, but only with respect to their liability as grantor of a franchise to you. f. Lessor of Leased Equipment Any person or organization from whom you lease equipment is also an additional insured, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person or organization. However, the insurance afforded to such additional insured does not apply to any “occurrence” that takes place after the equipment lease expires. g. Manager or Lessor of Premises Any person or organization from whom you lease premises is also an additional insured, but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you. However, this provision does not apply to: (1)Any "occurrence" that takes place after you cease to be a tenant in the premises. (2)Structural alterations, new construction or demolition operations performed by or for such additional insured(s). B. Additional Insured by Contract, Agreement or Permit With Completed Operations and Primary and Non-contributory 1.Any person or organization who does not qualify as an Additional Insured in A. Automatic Additional Insured Provisions Including Primary and Non-contributory, 4. Additional Insureds, paragraphs a. through g. above with whom you agreed in a written contract, agreement or permit to add as an additional insured on your policy is an additional insured only with respect to liability for “bodily injury”, “property damage”, or “personal and advertising injury” caused, in whole or in part, by your acts or omissions, or the acts or omissions of those acting on your behalf, but only with respect to: a.Premises you own, rent, lease or occupy; b.Your ongoing operations for the additional insured(s) designated in the written contract, agreement or permit; c.“Your work” included in the “products- completed operations hazard”, but only if: (1)The written contract, agreement or permit requires you to provide such coverage to the additional insured; and (2)This Coverage Part provides coverage for “bodily injury” or “property damage” included within the “products- completed operations hazard”. 2.The insurance afforded to such additional insured described above: a.Only applies to the extent permitted by law. b.Will not be broader than the insurance which you are required by the written contract, agreement or permit to provide for such additional insured. c.Applies on a primary basis and we will not seek contribution from any other insurance available to the Additional Insured, if that is required by the written contract, agreement or permit. d.Does not apply if the “bodily injury”, “property damage”, or “personal and advertising injury” arises out of sole negligence of the additional insured. e.Will not be broader than coverage provided to any other insured. f.Does not apply if the “bodily injury”, “property damage” or “personal and advertising injury” is otherwise excluded from coverage under this Coverage Part, including any endorsements thereto. g.Does not apply unless the written contract or agreement was executed or permit was issued prior to the "bodily injury”, “property damage", or "personal and advertising injury". h.Does not apply to any person or organization included as an insured by another endorsement issued by us and made part of this Coverage Part. i.Does not apply to any lessor of equipment after the equipment lease expires. j.Does not apply to any: (1)Owners or other interests from whom land has been leased if the “occurrence” takes place or the offense Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 5 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. is committed after the lease for the land expires; or (2)Managers or lessors of premises if: (a)The “occurrence” takes place or the offense is committed after you cease to be a tenant in that premises; or (b)The "bodily injury", "property damage", "personal and advertising injury" arises out of structural alterations, new con- struction or demolition operations performed by or on behalf of the manager or lessor. k.Does not apply to “bodily injury”, “property damage” or “personal and advertising injury” arising out of the rendering of or the failure to render any professional services. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage” or the offense which caused the “personal and advertising injury” involved the rendering of or failure to render any professional services by or for you. 3.With respect to the insurance afforded to these additional insureds, the following is added to SECTION III – LIMITS OF INSURANCE: The most we will pay on behalf of the additional insured for a covered claim is the lesser of the amount of insurance: 1.Required by the written contract, agreement or permit described in B. Additional Insured by Contract, Agreement or Permit With Completed Operations and Primary and Non- contributory, paragraph 1. or 2.Available under the applicable Limits of Insurance shown in the Declarations or any endorsement to this policy. This provision shall not increase the applicable Limits of Insurance shown in the Declarations. SECTION II – COVERAGE EXTENSIONS A. Supplementary Payments Extension SECTION I – COVERAGES, SUPPLEMENTARY PAYMENTS – COVERAGES A AND B, paragraph 1. is replaced by the following: 1.We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: a.All expenses we incur. b.Up to $2500 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. c.The cost of bonds to release attachments, but only for bond amounts within our Limit of Insurance. We do not have to furnish these bonds. d.All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $500 a day because of time off from work. e.All court costs taxed against the insured in the "suit". However, these payments do not include attorneys’ fees or attorneys’ expenses taxed against the insured. f.Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the Limit of Insurance, we will not pay any prejudgment interest based on that period of time after the offer. g.All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within our Limit of Insurance. These payments will not reduce the Limits of Insurance. B. Alienated Premises SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions, j. Damage to Property, paragraph (2) is replaced by the following: (2)Premises you sell, give away or abandon, if the “property damage” arises out of any part of those premises and occurred from hazards that were known by you, or should have reasonably been known by you, at the time the property was transferred or abandoned. C. Broad Form – Property Damage Legal Liability The following is added to SECTION III - LIMITS OF INSURANCE, Paragraph 6. The Damages to Premises Rented to You Limit shown on the Declarations will apply to a claim because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, while rented to you or temporarily Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 6 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. occupied by you with permission of the owner. If the General Aggregate Limit shown on the Declarations is less than $1,000,000, for the purpose of the Damages To Premises Rented to You coverage only, the General Aggregate Limit will be equal to the Damage to Premises Rented to You Limit shown on the Declarations. The Damage to Premises Rented to You Limit does not and should not be construed to increase the General Aggregate Limit except as provided in the limited circumstance described in this paragraph. D. Broad Form Property Damage – Borrowed Equipment, Customers’ Goods, Use of Elevators 1.The following is added to SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions, j. Damage to Property: Paragraph (4) does not apply to “property damage” to borrowed equipment while at a jobsite and not being used to perform operations. Paragraphs (3), (4) and (6) do not apply to “property damage” to “customers’ goods” while on your premises. Paragraphs (3), (4) and (6) do not apply to the use of elevators. 2.For the purposes of this endorsement, the following definition is added to SECTION V – DEFINITIONS: 1.“Customers’ goods” means property of your customer(s) on your premises for the purpose of being: a.Worked on; or b.Used in your manufacturing process. 3.The insurance afforded under this provision is excess over any other valid and collectible property insurance (including deductible) available to the insured whether primary, excess, contingent or on any other basis. E. Incidental Malpractice – Employed Nurses, EMT’s and Paramedics With respect to the COMMERCIAL GENERAL LIABILITY COVERAGE form, SECTION II – WHO IS AN INSURED, paragraph 2.a.(1)(d) and with respect to the SMALL COMMERCIAL LIABILITY COMPANION endorsement, SECTION IV – EXCLUSIONS, A. Professional Services do not apply to a nurse, emergency medical technician or paramedic employed by you if you are not engaged in the business or occupation of providing medical, paramedical, surgical, dental, x-ray or nursing services. F. Personal and Advertising Injury – Broad Form 1. SECTION I – COVERAGES, COVERAGE B – PERSONAL AND ADVERTISING INJURY LIABILITY, 2. Exclusions, e. Contractual Liability is deleted. 2. SECTION V – DEFINITIONS, 14. "Personal and advertising injury", paragraph b. is replaced by the following: b.Malicious prosecution or abuse of process. 3.The following is added to SECTION V – DEFINITIONS, 14. "Personal and advertising injury": “Discrimination” (unless insurance thereof is prohibited by law) that results in injury to the feelings or reputation of a natural person, but only if such “discrimination” is: (1)Not done intentionally by or at the direction of: (a)The insured; (b)Any officer of the corporation, director, stockholder, partner or member of the insured; and (2)Not directly or indirectly related to an "employee", nor to the employment, prospective employment or termination of any person or persons by an insured. 4.For purposes of this endorsement, the following definition is added to SECTION V – DEFINITIONS: 1.“Discrimination” means the unlawful treatment of individuals based upon race, color, ethnic origin, gender, religion, age, or sexual preference. “Discrimination” does not include the unlawful treatment of individuals based upon developmental, physical, cognitive, mental, sensory or emotional impairment or any combination of these. 5.This coverage does not apply if liability coverage for “personal and advertising injury” is excluded either by the provisions of the Coverage Form or any endorsement thereto. G. Product Recall Expense 1. SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions, n. Recall of Products, Work or Impaired Property is replaced by the following: n. Recall of Products, Work or Impaired Property Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 7 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. repair, replacement, adjustment, removal or disposal of: (1)“Your product”; (2)“Your work”; or (3)“Impaired property”; if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it, but this exclusion does not apply to “product recall expenses” that you incur for the “covered recall” of “your product” if the “covered recall” was initiated during the policy period. However, the exception to the exclusion does not apply to “product recall expenses” resulting from: (4)Failure of any products to accomplish their intended purpose; (5)Breach of warranties of fitness, quality, durability or performance; (6)Loss of customer approval, or any cost incurred to regain customer approval; (7)Redistribution or replacement of “your product” which has been recalled by like products or substitutes; (8)Caprice or whim of the insured; (9)A condition likely to cause loss of which any insured knew or had reason to know at the inception of this insurance; (10)Asbestos, including loss, damage or clean up resulting from asbestos or asbestos containing materials; or (11)Recall of “your products” that have no known or suspected defect solely because a known or suspected defect in another of “your products” has been found. 2.The following is added to SECTION II – WHO IS AN INSURED, paragraph 3.b.: “Product recall expense” arising out of any withdrawal or recall that occurred before you acquired or formed the organization. 3.The following is added to SECTION III – LIMITS OF INSURANCE: Product Recall Expense Limits of Insurance a.The Limits of Insurance shown in the SUMMARY OF COVERAGES of this endorsement and the rules stated below fix the most that we will pay under this Product Recall Expense coverage regardless of the number of: (1)Insureds; (2)“Covered Recalls” initiated; or (3)Number of “your products” withdrawn or recalled. b.The Product Recall Expense Aggregate Limit is the most we will reimburse you for the sum of all “product recall expenses” incurred for all “covered recalls” initiated during the policy period. c.The Product Recall Each Occurrence Limit is the most we will pay in connection with any one defect or deficiency. d.All “product recall expenses” in connection with substantially the same general harmful condition will be deemed to arise out of the same defect or deficiency and considered one “occurrence”. e.Any amount reimbursed for “product recall expenses” in connection with any one “occurrence” will reduce the amount of the Product Recall Expense Aggregate Limit available for reimbursement of “product recall expenses” in connection with any other defect or deficiency. f.If the Product Recall Expense Aggregate Limit has been reduced by reimbursement of “product recall expenses” to an amount that is less than the Product Recall Expense Each Occurrence Limit, the remaining Aggregate Limit is the most that will be available for reimbursement of “product recall expenses” in connection with any other defect or deficiency. g. Product Recall Deductible We will only pay for the amount of "product recall expenses" which are in excess of the $500 Product Recall Deductible. The Product Recall Deductible applies separately to each "covered recall". The limits of insurance will not be reduced by the amount of this deductible. We may, or will if required by law, pay all or any part of any deductible amount, if applicable. Upon notice of our payment of a deductible amount, you shall promptly reimburse us for the part of the deductible amount we paid. The Product Recall Expense Limits of Insurance apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 8 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. case, the additional period will be deemed part of the last preceding period for the purposes of determining the Limits of Insurance. 4.The following is added to SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS, 2. Duties in the Event of Occurrence, Offense, Claim or Suit: You must see to it that the following are done in the event of an actual or anticipated “covered recall” that may result in “product recall expense”: (1)Give us prompt notice of any discovery or notification that “your product” must be withdrawn or recalled. Include a description of “your product” and the reason for the withdrawal or recall; (2)Cease any further release, shipment, consignment or any other method of distribution of like or similar products until it has been determined that all such products are free from defects that could be a cause of loss under this insurance. 5.For the purpose of this endorsement, the following definitions are added to SECTION V – DEFINITIONS: 1.“Covered recall” means a recall or withdrawal made necessary because you or a government body has determined that a known or suspected defect, deficiency, inadequacy, or dangerous condition in “your product” has resulted or is reasonably expected to result in “bodily injury” or “property damage”. 2.“Product recall expense(s)” means: a.Necessary and reasonable expenses for: (1)Communications, including radio or television announcements or printed advertisements including stationary, envelopes and postage; (2)Shipping the recalled products from any purchaser, distributor or user to the place or places designated by you; (3)Remuneration paid to your regular “employees” for necessary overtime; (4)Hiring additional persons, other than your regular “employees”; (5)Expenses incurred by “employees” including transportation and accommodations; (6)Expenses to rent additional warehouse or storage space; (7)Disposal of “your product”, but only to the extent that specific methods of destruction other than those employed for trash discarding or disposal are required to avoid “bodily injury” or “property damage” as a result of such disposal, you incur exclusively for the purpose of recalling “your product”; and b.Your lost profit resulting from such “covered recall”. 6.This Product Recall Expense Coverage does not apply: a.If the “products – completed operations hazard” is excluded from coverage under this Coverage Part including any endorsement thereto; or b.To “product recall expense” arising out of any of “your products” that are otherwise excluded from coverage under this Coverage Part including endorsements. H. Who is an Insured Amended 1. SECTION II – WHO IS AN INSURED, paragraph 2.a.(1)(d) is replaced by the following: (d)Arising out of his or her providing or failing to provide professional services. 2. Insured Employee Extension The following is added to SECTION II – WHO IS AN INSURED, paragraph 2.a.(1)(a): With respect to “bodily injury” only, the limitations above do not apply to your “employees” as insureds with respect to damages caused by cardiopulmonary resuscitation or first aid services administered by such an “employee”. 3. Who is an Insured – Subsidiaries The following is added to SECTION II – WHO IS AN INSURED: Subsidiaries Any of your subsidiaries, other than a partnership or joint venture, that is not shown as a Named Insured in the Declarations is a Named Insured if: a.You maintain an ownership interest of more than 50% in such subsidiary on the first day of the policy period; and b.Such subsidiary is not an insured under similar other insurance. Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 9 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. No such subsidiary is an insured for "bodily injury" or “property damage” that occurred, or “personal and advertising injury” caused by an offense committed: c.Before you maintained an ownership interest or more than 50% in such subsidiary; or d.After the date, if any, during the policy period that you no longer maintain an ownership interest of more than 50% in such subsidiary. 4. Newly Acquired or Formed Organizations – 180 Days SECTION II – WHO IS AN INSURED, paragraph 3.a. is replaced by the following: a.Coverage under this provision is afforded only until the 180th day after you acquire or form the organization or the end of the policy period, whichever is earlier. I. Limits of Insurance Amended General Aggregate Limits of Insurance Per Location The following is added to SECTION III – LIMITS OF INSURANCE: The General Aggregate Limits of Insurance apply separately to each of your “locations” owned by or rented to you. “Location” means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway, waterway or right-of-way of a railroad. J. Blanket Waiver of Subrogation The following is added to SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS, 8. Transfer of Rights of Recovery Against Others to Us: We waive any right of recovery we may have against any person or organization with whom you have a written contract, agreement or permit to waive any rights of recovery against such person or organization because of payments we make for injury or damage arising out of your ongoing operations or “your work” done under a contract with that person or organization and included in the “products-completed operations hazard”. This condition does not apply to Medical Expenses Coverage. K. Unintentional Failure to Disclose Hazards SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS, 6. Representations is replaced by the following: 6. Representations We will not disclaim coverage under this Coverage Part if you fail to disclose all hazards existing as of the inception date of the policy provided such failure is not intentional. L. Unintentional Failure to Notify/Knowledge of an Occurrence The following is added to SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS, 2. Duties in the Event of Occurrence, Offense, Claim or Suit, paragraph a.: Your rights afforded under this Coverage Part shall not be prejudiced if you fail to give us notice of an “occurrence”, offense, claim or “suit”, solely due to your reasonable and documented belief that the “bodily injury”, “property damage” or “personal and advertising injury” is not covered under this Coverage Part. Knowledge of an “occurrence” or offense by an agent or “employee” of the insured will not constitute knowledge by the insured, unless an “executive officer” of the insured knows about such “occurrence” or offense. Failure of an agent or “employee” of the insured, other than an “executive officer” of the insured, to notify us of an “occurrence” or offense that such person knows about will not affect the insurance afforded to you. M. Medical Payments – Three Years to Report SECTION I – COVERAGES, COVERAGE C – MEDICAL PAYMENTS, 1. Insuring Agreement, paragraph a.(3)(b) is replaced by the following: (b)The expenses are incurred and reported to us within three years of the date of the accident; and SECTION III – ADDITIONAL CONDITIONS The following are added to SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS: A. Liberalization If, within 45 days prior to or during the policy period, we adopt any revision that would broaden the coverage under this policy without additional premium, the broadened coverage will immediately apply to this policy. B. Concealment, Misrepresentation or Fraud This policy is void in any case of fraud by you as it relates to this policy at any time. It is also void if you or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning: 1.This policy; 2.The Covered Property; 3.Your interest in the Covered Property; or 4.A claim under this policy. C. Insurance Under Two or More Coverages Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 10 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. It is our stated intent that the various Coverage Parts, forms, endorsements or policies issued to the named insured by us, or any company affiliated with us, do not provide any duplication or overlap of coverage for the same claim, “suit”, “occurrence”, offense, accident, “wrongful act” or loss. We will not pay more than the actual amount of the loss or damage. If this Coverage Part and any other Coverage Part, form, endorsement or policy issued to the named insured by us, or any company affiliated with us, apply to the same claim, "suit", occurrence, offense, accident, “wrongful act” or loss, the maximum Limit of Insurance under all such Coverage Parts, forms, endorsements or policies combined shall not exceed the highest applicable Limit of Insurance under any one Coverage Part, form, endorsement or policy. This condition does not apply to any Excess or Umbrella Policy issued by us specifically to apply as excess insurance over this policy. SECTION IV – EXCLUSIONS A.The following are added to SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions and SECTION I – COVERAGES, COVERAGE B – PERSONAL AND ADVERTISING INJURY, 2. Exclusions: Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability Damages arising out of: (1)Any access to or disclosure of any person's or organization's confidential or personal information, including patents, trade secrets, processing methods, customer lists, financial information, credit card information, health information or any other type of nonpublic information; or (2)The loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate electronic data. This exclusion applies even if damages are claimed for notification costs, credit monitoring expenses, forensic expenses, public relations expenses or any other loss, cost or expense incurred by you or others arising out of that which is described in paragraphs (1) or (2) above. However, unless paragraph (1) above applies, this exclusion does not apply to damages because of “bodily injury”. As used in this exclusion, electronic data means information, facts or computer programs stored as or on, created or used on, or transmitted to or from computer software including systems and applications software), on hard or floppy disks, CD- ROMs, tapes, drives, cells, data processing devices or any other repositories of computer software which are used with electronically controlled equipment. The term computer programs, referred to in the foregoing description of electronic data, means a set of related electronic instructions which direct the operations and functions of a computer or device connected to it, which enable the computer or device to receive, process, store, retrieve or send data. Aircraft Products, Grounding and Testing (1)“Bodily injury”, “property damage” or “personal and advertising injury” arising out of: (a)“Aircraft products” or reliance upon any representation or warranty made with such product; (b)The “grounding” of any aircraft; or (c)The “testing” of any aircraft. (2)For purposes of this Exclusion, the following definitions apply: (a)“Aircraft Products” means: (i)Aircraft, including but not limited to missiles, spacecraft, or any other aircraft goods or products you manufacture, sell, handle or distribute; (ii)Aircraft and any ground support or control equipment used in connection therewith; (iii)Any product provided by the insured and installed or used in connection with any aircraft; (iv)Any tooling used in respect to any aircraft; (v)Training and navigational aids, instructions, manuals, blueprints, engineering or other data in connection with any aircraft; (vi)Any advice, service or labor supplied with any aircraft; or (vii)Services you or others trading under your name provide or recommend for use in the manufacture, repair, operation, maintenance or use of any aircraft. (b)“Grounding” means the withdrawal of one or more aircraft from flight operations or the imposition of speed, passenger or load restrictions on such aircraft, due to the existence of or alleged or suspected existence of any defect, fault or condition: (i)In such aircraft or any part sold, handled or distributed by you or that is manufactured, assembled or Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 11 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. processed by any other person or organization according to your specifications, plans, suggestions, orders or drawings; or (ii)With tools, machinery or other equipment furnished to such persons or organizations by you; whether such withdrawn aircraft are owned or operated by the same or different persons or organizations. “Grounding” shall be deemed to commence on the date of an “occurrence” which discloses the necessity of “grounding” or on the date an aircraft is first withdrawn from service because of such condition, whichever comes first. (c)“Testing” means examination, observation, evaluation or measuring of the performance of “aircraft products”, while either in the air or on the ground. Professional Services "Bodily injury", "property damage", or "personal and advertising injury" caused by the rendering of or failure to render any professional service, advice or instruction: (1)By any insured; or (2)On behalf of any insured; or (3)From whom any insured assumed liability by reason of a contract or agreement, regardless of whether any such service, advice or instruction is ordinary to any insured’s profession. Professional services include but are not limited to: (4)Legal, accounting or advertising services, notary, title abstract, tax preparation, real estate, stockbroker, publishing, architects or insurance services; (5)Preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs or specifications; (6)Supervisory, inspection or engineering services; (7)Any medical, surgical, dental, x-ray, nursing, health or therapeutic services, treatment, advice or instruction including, but not limited to, the prescribing, furnishing or dispensing of drugs; (8)Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming, including body piercing services or use or exposure to any sun lamp, tanning booth or other similar appliance; (9)Optometry or optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices; (10) Services in the practice of pharmacy; (11)Management, Human Resource, Testing, Media or Public Relations consulting services. This exclusion applies even if a claim alleges negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the “occurrence” which caused the “bodily injury” or “property damage”, or the offense which caused the “personal and advertising injury”, involved the rendering of or failure to render any professional service. Unmanned Aircraft (1)“Bodily injury”, “property damage” or “personal and advertising injury” arising out of the ownership, maintenance, use or entrustment to others of any aircraft that is an “unmanned aircraft”. Use includes operation and “loading and unloading”. This paragraph applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage” or the offense which caused the “personal and advertising injury” involved the ownership, maintenance, use or entrustment to others of any aircraft that is an “unmanned aircraft”. This paragraph does not apply to: (a)The use of another’s advertising idea in your “advertisement”; or (b)Infringing upon another’s copyright, trade dress or slogan in your “advertisement”. (2)For purposes of this endorsement, the following is added to SECTION V – DEFINITIONS: “Unmanned aircraft” means an aircraft that is not: (a)Designed; (b)Manufactured; or (c)Modified after manufacture; to be controlled directly by a person from within or on the aircraft. B.The following is added to SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions and SECTION I – COVERAGES, COVERAGE C – MEDICAL PAYMENTS, 2. Exclusions: Nuclear Energy Liability Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 12 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. (1)"Bodily injury" or "property damage": (a)With respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by the Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or (b)Resulting from the "hazardous properties" of "nuclear material" and with respect to which: (i)Any person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof; or (ii)The insured is, or had this policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America, or any agency thereof, with any person or organization. (2)Under COVERAGE C – MEDICAL PAYMENTS, expenses incurred with respect to "bodily injury" resulting from the "hazardous properties" of "nuclear material" and arising out of the operation of a "nuclear facility" by any person or organization. (3)"Bodily injury" or "property damage" resulting from the "hazardous properties" of the "nuclear material"; if: (a)The "nuclear material": (i)Is at any "nuclear facility" owned by, or operated by or on behalf of, an insured; or (ii)Has been discharged or dispersed therefrom; (b)The "nuclear material" is contained in "spent fuel" or "waste" at any time possessed, handled, used, processed, stored, transported or disposed of by or on behalf of an insured; or (c)The "bodily injury" or "property damage" arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the planning, construction, maintenance, operation or use of any "nuclear facility"; but if such facility is located within the United States of America, its territories or possessions or Canada, this Exclusion (3) applies only to "property damage" to such "nuclear facility" and any property thereat. (4)As used in this exclusion: (a)"By-product material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof; (b)"Hazardous properties" include radioactive, toxic or explosive properties; (c)"Nuclear facility" means: (i)Any "nuclear reactor"; (ii)Any equipment or device designed or used for: 1)Separating the isotopes of uranium or plutonium; 2)Processing or utilizing "spent fuel"; or 3)Handling, processing or packaging "waste"; (iii)Any equipment or device used for the processing, fabricating or alloying of "special nuclear material" if at any time the total amount of such material in the custody of the insured at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235; (iv)Any structure, basin, excavation, premises or place prepared or used for the storage or disposal of "waste"; and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations; (d)"Nuclear material" means "source material", "special nuclear material" or "by- product material"; (e)"Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of fissionable material; (f)"Property damage" includes all forms of radioactive contamination of property. (g)"Source material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof; (h)"Special nuclear material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof; Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 13 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. (i)"Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor"; (j)"Waste" means any waste material: (i)Containing "by-product material" other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its "source material" content; and (ii)Resulting from the operation by any person or organization of any "nuclear facility" included under paragraphs (i) and (ii) of the definition of "nuclear facility". C. Amended Exclusion With Coverage Extension SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions, g. Aircraft, Auto or Watercraft is replaced by the following: g. Aircraft (Other Than Unmanned Aircraft), Auto or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft (other than “unmanned aircraft”), "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading". This paragraph g. applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft (other than “unmanned aircraft”), "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This paragraph g. does not apply to: (a)A watercraft while ashore on premises you own or rent; (b)A watercraft you do not own that is: (i)Less than 51 feet long; and (ii)Not being used to carry persons or property for a charge; (c)Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (d)Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft (other than “unmanned- aircraft”) or watercraft; or (e)"Bodily injury" or "property damage" arising out of: (i)The operation of machinery or equipment that is attached to, or part of, a land vehicle that would qualify under the definition of “mobile equipment” if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance or motor vehicle registration law where it is licensed or principally garaged; or (ii)The operation of any of the following machinery or equipment: 1)Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and 2)Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well-servicing equipment; or (f)An aircraft (other than “unmanned aircraft”) that is: (i)Chartered by, loaned to, or hired by you with a paid crew; and (ii)Not owned by any insured. SECTION V – AMENDED DEFINITIONS A. SECTION V – DEFINITIONS, 3. "Bodily injury", 16. "Products – completed operations hazard", and 17. "Property damage" are replaced by the following: 3."Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. “Bodily injury” includes mental anguish or other mental injury resulting from “bodily injury”. 16."Products – completed operations hazard": a.Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1)Products that are still in your physical possession; or (2)Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: (a)When all of the work called for in your contract has been completed. (b)When all of the work to be done at the job site has been completed if Insured Copy Z2F H550106 05 5701621 822-0001 08 19 Includes copyrighted material of the Insurance Services Office Inc., with its permission.Page 14 of 14 Copyright 2019 The Hanover Insurance Company. All Rights Reserved. your contract calls for work at more than one job site. (c)When that part of the work done at the job site has been put to its intended use by any other person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. The "bodily injury" or "property damage" must occur away from premises you own or rent, unless your business includes the selling, handling or distribution of "your product" for consumption on premises you own or rent. b.Does not include "bodily injury" or "property damage" arising out of: (1)The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2)The existence of tools, uninstalled equipment or abandoned or unused materials. 17.“Property damage” means: a.Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b.Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD- ROMs, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS REMAIN UNCHANGED. Insured Copy Affinity Insurance Services 1100 Virginia Drive, Suite 250 Fort Washington, PA 19034 APL 658773160 03/08/2026 Continental Casualty Company 20443 Professional Liability (Claims-Made Policy) City of Cupertino 10300 Torre Ave Cupertino, CA 95014 06/01/2026 03/08/2027 Vasquez & Company LLP 655 N Central Ave Suite 1550 Glendale, CA 91203 A Per Claim/Aggregate Limit $2,000,000 / $2,000,000 Limits shown are as requested. No Prior Acts Date Limitation Applies. . . 06/03/2026 Marsh Affinity a division of Marsh USA LLC. PO BOX 14404 Des Moines, IA 50306-9686 Marsh Affinity 800-743-8130 ADPTotalSource@marsh.com AIU Insurance Company 19399 A N 07/01/2025 07/01/2026 2,000,000 2,000,000 2,000,000 ADP TotalSource FL XVI, Inc. 5800 Windward Parkway Alpharetta, GA 30005 L/C/F: Vasquez and Company LLP 655 N CENTRAL AVENUE STE. 1550 Glendale, CA 912030000 WC 063530587 CAX All worksite employees working for Vasquez and Company LLP paid under ADP TOTALSOURCE, INC.'s payroll, are covered under the above stated policy. Proprietor/Partner/Executive Officer/Member are not excluded as long as they are in the ADPTS payroll or have completed the SEI Participation Addendum. WAIVER OF SUBROGATION IN FAVOR OF City of Cupertino AS RESPECTS OF JOB PERFORMED BY Vasquez and Company LLP AS REQUIRED BY WRITTEN CONTRACT. City of Cupertino 10300 Torre Ave Cupertino, CA 95014 X WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 43 03 06 (Ed. 4-84) WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT - CALIFORNIA We have the right to recover our payments from anyone liable for an injury covered by this policy.We will not enforce our right against the person or organization named in the Schedule. (Th is agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) You must maintain payroll records accurately segregating the remuneration of your employees while engaged in the work described in the Schedule. The ad ditional premium for this endorsement shall be __% of the California workers’compensation premium otherwise due on such remuneration. Schedule Person or Organization Job Description Notes: 1. This endors ement may be used to waive the company’s right of subrogation against named third parties who may be responsible for an injury. 2. The s entence in ( ) is optional with the company.It limits the endorsement to apply to specific jobs of the insured, and only to the extent that the insured is required to obtain 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 Policy No.Endorsement No. Insured Insurance Company Countersigned by ©1998 by the Workers’ Co mpensation Insurance Rating Bureau of California. All rights reserved. From the WCIRB’s California Workers' Compensation Insurance Forms Manual ©2001. WAIVER OF SUBROGATION IN FAVOR OF City of Cupertino AS RESPECTS OF JOB PERFORMED BY Vasquez and Company LLP AS REQUIRED BY WRITTEN CONTRACT. City of Cupertino 10300 Torre Ave Cupertino, CA 95014 07/01/2025 WC 063530587 CA AIU Insurance Company ADP TotalSource FL XVI, Inc. 5800 Windward Parkway Alpharetta, GA 30005 L/C/F: Vasquez and Company LLP 655 N CENTRAL AVENUE STE. 1550 Glendale, CA 912030000 Exh. D-Insurance Requirements for Design Professionals & Consultant Contracts 1 Version: May 2025 Consultant shall procure prior to commencement of Services and maintain for the duration of the contract, at its own cost and expense, the following insurance policies and coverage with companies doing business in California and acceptable to City. INSURANCE POLICIES AND MINIMUMS REQUIRED 1. Commercial General Liability (CGL) with coverage at least as broad as Insurance Services Office (ISO) Form CG 00 01, with limits no less than $2,000,000 per occurrence and $2,000,000 general aggregate. The policy shall include a per project or per location general aggregate endorsement as broad as CG 25 03 or CG 24 04. If a per project/location endorsement is not available, the limit of the general aggregate shall be doubled. a. It shall be a requirement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits shall be made available to the Additional Insured and shall be (i) the minimum coverage/limits specified in this agreement; or (ii) the broader coverage and maximum limits of coverage of any insurance policy, whichever is greater. b. Additional Insured coverage under Consultant's policy shall allow and be endorsed "primary and non-contributory," will not seek contribution from City’s insurance/self-insurance, and shall be at least as broad as the most recent edition of ISO Form CG 20 01. c. The limits of insurance required may be satisfied by a combination of primary and umbrella or excess liability insurance, provided each policy follows form of the underlying policy and complies with the requirements set forth in this Contract. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary basis for the benefit of City. The City’s own insurance or self-insurance shall not be called upon. 2. Automobile Liability: Coverage shall be provided using ISO CA 00 01 covering any auto (including owned, hired, and non-owned autos) with limits no less than $1,000,000 each accident for bodily injury and property damage. Not required. Consultant shall be fully remote and not use automobiles to provide the service. In the event Consultant uses an automobile or automobiles in the operation of its business to provide services under this Agreement, the Consultant shall, prior to such use, provide the City with evidence of Business Automobile Liability insurance coverage in the amount required under this Section 2 for owned, non-owned and hired autos (any auto-Symbol 1), or if Consultant does not own autos (hired autos-Symbol 8 and non-owned autos-Symbol 9). Evidence shall be provided with a Certificate of Insurance, along with an additional insured endorsement in favor of the City, primary and non- contributory coverage and endorsement, and waiver of subrogation coverage and endorsement under the policy prior to the use of any automobile. Consultant has provided written confirmation that it does not own any autos. Consultant shall provide coverage for hired autos-Symbol 8 and non-owned autos-Symbol 9. Primary and Non-Contributory coverage and Waiver of Subrogation coverage is waived under the Automobile Liability hired and non-owned only coverage. In the event Consultant uses an owned automobile or automobiles in the operation of its business to provide services under this Agreement, the Consultant shall, prior to such use, provide the City with evidence of Business Automobile Liability insurance coverage in the amount required under this Section 2 for owned, non-owned and hired autos (any auto-Symbol 1). EXHIBIT D Insurance Requirements Design Professionals & Consultants Contracts Exh. D-Insurance Requirements for Design Professionals & Consultant Contracts 2 Version: May 2025 In lieu of Business Automobile Liability, Consultant shall maintain throughout the term of this Agreement and provide the City with evidence (including the policy Declarations Page) of personal automobile insurance coverage in accordance with the laws of the State of California. As available under the policy, evidence shall be provided with the Certificate of Insurance, along with an additional insured endorsement in favor of the City, primary and non-contributory coverage and endorsement, and waiver of subrogation coverage and endorsement. City approval of coverage is required prior to commencement of services. 3. Workers’ Compensation: As required by the State of California, with Statutory Limits and Employer’s Liability Insurance of no less than $1,000,000 each accident/ disease. Not required. Consultant has provided written verification of no employees. 4. Professional Liability for professional acts, errors and omissions, if applicable and as appropriate to Consultant’s profession, with limits no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. If written on a claims-made basis form: a. The Retroactive Date must be shown and must be before the Effective Date of the Contract. b. Insurance must be maintained for at least five (5) years after completion of the Services. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the Contract Effective Date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the Services. OTHER INSURANCE PROVISIONS The aforementioned insurance policies shall contain, be endorsed and have all the following conditions and provisions: Additional Insured Status The City of Cupertino, its City Council, officers, officials, employees, agents, and volunteers (“Additional Insureds”) are to be covered and endorsed as additional insureds on Consultant’s CGL and automobile liability policies. General Liability coverage can be provided in the form of an endorsement to Consultant’s insurance (at least as broad as ISO Form CG 20 10 (11/ 85) or if not available, through the addition of both CG 20 10 and CG 20 37 forms, if later editions are used). Primary and Non-Contributory Coverage Except Workers Compensation, coverage afforded to City/Additional Insureds shall allow and be endorsed primary insurance. Any insurance or self-insurance maintained by City, its officers, officials, employees, or volunteers shall be excess of Consultant’s insurance and shall not contribute to it. Notice of Cancellation Each insurance policy shall state that coverage shall not be canceled or allowed to expire, except with written notice to City 30 days in advance or 10 days in advance if due to non-payment of premiums. If a carrier will not provide the required notice of cancellation or policy modification, the Consultant shall provide written notice to the City of a cancellation or policy modification no later than 30 days in advance or 10 days in advance if due to non-payment of premiums. Waiver of Subrogation Consultant waives any right to subrogation against City/Additional Insureds for recovery of damages to the extent said losses are covered by the insurance policies required herein. Specifically, the General Liability, Automobile Liability and Workers’ Compensation policies shall allow and be endorsed with a waiver of subrogation in favor of City, its employees, agents and volunteers. This provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. Exh. D-Insurance Requirements for Design Professionals & Consultant Contracts 3 Version: May 2025 Deductibles and Self-Insured Retentions Any deductible or self-insured retention must be declared to and approved by the City (Insert on the Certificate of Insurance, if zero, insert “$0”). At City’s option, either: the insurer must reduce or eliminate the deductible or self-insured retentions as respects the City/Additional Insureds; or Consultant must show proof of ability to pay losses and costs related investigations, claim administration and defense expenses. The policy shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the insured or the City. Acceptability of Insurers Insurance shall be placed with insurers admitted in the State of California and with an AM Best rating of A- VII or higher. Verification of Coverage Consultant must furnish acceptable insurance certificates and amendatory endorsements (or copies of the policies effecting the coverage required by this Contract), including a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements prior to commencement of the Contract. City retains the right to demand verification of compliance at any time during the Contract term. Subconsultants Consultant shall require and verify that all subconsultants maintain insurance that meet the requirements of this Contract, including indemnification, defense, and naming the City as an additional insured on subconsultant’s insurance policies. Higher Insurance Limits If Consultant maintains broader coverage and/or higher limits than the minimums shown above, City shall be entitled to coverage for the higher insurance limits maintained by Consultant. Adequacy of Coverage City reserves the right to modify these insurance requirements/coverage based on the nature of the risk, prior experience, insurer or other special circumstances, with not less than ninety (90) days prior written notice. Professional Consultant - Vasquez Final Audit Report 2026-06-05 Created:2026-06-05 By:Janet Liang (JanetL@cupertino.gov) Status:Signed Transaction ID:CBJCHBCAABAASod1MAz7wkS815EoclJKOv75U1ZZMSxj "Professional Consultant - Vasquez" History Document created by Janet Liang (JanetL@cupertino.gov) 2026-06-05 - 6:23:09 PM GMT- IP address: 64.165.34.3 Document emailed to Cristy Canieda (c_canieda@vasquezcpa.com) for signature 2026-06-05 - 6:24:11 PM GMT Email viewed by Cristy Canieda (c_canieda@vasquezcpa.com) 2026-06-05 - 8:44:08 PM GMT- IP address: 104.47.56.126 Document e-signed by Cristy Canieda (c_canieda@vasquezcpa.com) Signature Date: 2026-06-05 - 8:56:01 PM GMT - Time Source: server- IP address: 137.135.62.247 - Signature Appearance Selected: IMAGE Document emailed to Jonathan Orozco (jonathano@cupertino.gov) for signature 2026-06-05 - 8:56:03 PM GMT Email viewed by Jonathan Orozco (jonathano@cupertino.gov) 2026-06-05 - 8:56:10 PM GMT- IP address: 32.192.209.214 Document e-signed by Jonathan Orozco (jonathano@cupertino.gov) Signature Date: 2026-06-05 - 8:57:41 PM GMT - Time Source: server- IP address: 74.244.51.214 - Signature Appearance Selected: IMAGE Document emailed to Michael Woo (michaelw@cupertino.gov) for signature 2026-06-05 - 8:57:44 PM GMT Email viewed by Michael Woo (michaelw@cupertino.gov) 2026-06-05 - 8:57:57 PM GMT- IP address: 100.53.235.25 Document e-signed by Michael Woo (michaelw@cupertino.gov) Signature Date: 2026-06-05 - 9:26:33 PM GMT - Time Source: server- IP address: 98.33.114.31 - Signature Appearance Selected: MOBILE_IMAGE Document emailed to Lauren Sapudar (laurens@cupertino.gov) for signature 2026-06-05 - 9:26:36 PM GMT Email viewed by Lauren Sapudar (laurens@cupertino.gov) 2026-06-05 - 9:26:45 PM GMT- IP address: 32.192.40.118 Janet Liang (JanetL@cupertino.gov) added alternate signer Jen Woodworth (JenW@cupertino.gov). The original signer Lauren Sapudar (laurens@cupertino.gov) can still sign. 2026-06-05 - 9:43:05 PM GMT- IP address: 24.6.211.237 Document emailed to Jen Woodworth (JenW@cupertino.gov) for signature 2026-06-05 - 9:43:05 PM GMT Email viewed by Jen Woodworth (JenW@cupertino.gov) 2026-06-05 - 9:44:19 PM GMT- IP address: 34.216.141.191 Signer Jen Woodworth (JenW@cupertino.gov) entered name at signing as Jennifer Woodworth for 2026-06-05 - 9:46:49 PM GMT- IP address: 146.75.146.64 Document e-signed by Jennifer Woodworth for (JenW@cupertino.gov) Signature Date: 2026-06-05 - 9:46:52 PM GMT - Time Source: server- IP address: 146.75.146.64 - Signature Appearance Selected: MOBILE_TYPE Agreement completed. 2026-06-05 - 9:46:52 PM GMT