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Robertson & Associates 2017-08-08
COU No. I AGREEMENT FOR PROFESSIONAL CONSULTING SERVICES This Agreement, made and entered into thisday of 1 -S �— 2017 ("Effective Date"), by and between CITY OF UKIAH, CALIFORNIA, hereinafter Yeferred to as "City" and Robertson & Associates, CPA's, a corporation organized and in good standing under the laws of the state of California, hereinafter referred to as "Consultant". RECITALS This Agreement is predicated on the following facts: a. City requires consulting services related to an Agreed Upon Procedures financial review between City and Consultant with the consent, cooperation and approval of Tayman Park Golf Group, INC. (TPGG). b. Consultant represents that it has the qualifications, skills, experience and properly licensed to provide these services, and is willing to provide them according to the terms of this Agreement. C. City and Consultant agree upon the Scope -of -Work and Work Schedule attached hereto as Attachment "A", describing contract provisions for the project and setting forth the completion dates for the various services to be provided pursuant to this Agreement. TERMS OF AGREEMENT 1.0 DESCRIPTION OF PROJECT 1.1 The Project is described in detail in the attached Scope -of -Work (Attachment "A"). 2.0 SCOPE OF SERVICES 2.1 As set forth in Attachment "A". 2.2. Additional Services. Additional services, if any, shall only proceed upon written agreement between City and Consultant. The written Agreement shall be in the form of an Amendment to this Agreement. 3.0 CONDUCT OF WORK 3.1 Time of Completion. Consultant shall commence performance of services as required by the Scope -of -Work upon receipt of a Notice to Proceed from City and shall complete such services within 90 days from receipt of the Notice to Proceed. Consultant shall complete the work to the City's reasonable satisfaction, even if contract disputes arise or Consultant contends it is entitled to further compensation. 4.0 COMPENSATION FOR SERVICES 4.1 Basis for Compensation. For the performance of the professional services of this Agreement, Consultant shall be compensated on a time and expense basis not to exceed a guaranteed maximum dollar amount of $5,000. Labor charges shall be based upon hourly billing rates of $200 per hour for the personnel employed by Consultant to perform the Scope of Work as set forth in the attached Attachment A, which shall include all indirect costs and expenses of every kind or nature, except direct expenses. The Std — ProMmAgreement- November 20, 2008 PAGE 1 OF 7 COU No. direct expenses and the fees to be charged for same shall be as set forth in Attachment B. Consultant shall complete the Scope of Work for the not -to -exceed guaranteed maximum, even if actual time and expenses exceed that amount. 4.2 Changes. Should changes in compensation be required because of changes to the Scope -of -Work of this Agreement, the parties shall agree in writing to any changes in compensation. "Changes to the Scope -of -Work" means different activities than those described in Attachment "A" and not additional time to complete those activities than the parties anticipated on the date they entered this Agreement. 4.3 Sub -contractor Payment. The use of sub -consultants or other services to perform a portion of the work of this Agreement shall be approved by City prior to commencement of work. The cost of sub -consultants shall be included within guaranteed not -to -exceed amount set forth in Section 4.1. 4.4 Terms of Payment. Payment to Consultant for services rendered in accordance with this contract shall be based upon submission of monthly invoices for the work satisfactorily performed prior to the date of the invoice less any amount already paid to Consultant, which amounts shall be due and payable thirty (30) days after receipt by City. The invoices shall provide a description of each item of work performed, the time expended to perform each task, the fees charged for that task, and the direct expenses incurred and billed for. Invoices shall be accompanied by documentation sufficient to enable City to determine progress made and to support the expenses claimed. 5.0 ASSURANCES OF CONSULTANT 5.1 Independent Contractor. Consultant is an independent contractor and is solely responsible for its acts or omissions. Consultant (including its agents, servants, and employees) is not the City's agent, employee, or representative for any purpose. It is the express intention of the parties hereto that Consultant is an independent contractor and not an employee, joint venturer, or partner of City for any purpose whatsoever. City shall have no right to, and shall not control the manner or prescribe the method of accomplishing those services contracted to and performed by Consultant under this Agreement, and the general public and all governmental agencies regulating such activity shall be so informed. Those provisions of this Agreement that reserve ultimate authority in City have been inserted solely to achieve compliance with federal and state laws, rules, regulations, and interpretations thereof. No such provisions and no other provisions of this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between Consultant and City. Consultant shall pay all estimated and actual federal and state income and self- employment taxes that are due the state and federal government and shall furnish and pay worker's compensation insurance, unemployment insurance and any other benefits required by law for himself and his employees, if any. Consultant agrees to indemnify and hold City and its officers, agents and employees harmless from and against any claims or demands by federal, state or local government agencies for any such taxes or benefits due but not paid by Consultant, including the legal costs associated with defending against any audit, claim, demand or law suit. Std — ProfSvcsAgreement- November 20, 2008 PAGE 2 OF 7 COU No. Consultant warrants and represents that it is a properly licensed professional or professional organization with a substantial investment in its business and that it maintains its own offices and staff which it will use in performing under this Agreement. 5.2 Conflict of Interest. Consultant understands that its professional responsibility is solely to City. Consultant has no interest and will not acquire any direct or indirect interest that would conflict with its performance of the Agreement. Consultant shall not in the performance of this Agreement employ a person having such an interest. If the City Manager determines that the Consultant has a disclosure obligation under the City's local conflict of interest code, the Consultant shall file the required disclosure form with the City Clerk within 10 days of being notified of the City Manager's determination. 6.0 INDEMNIFICATION 6.1 Insurance Liability. Without limiting Consultant's obligations arising under Paragraph 6.2 Consultant shall not begin work under this Agreement until it procures and maintains for the full period of time allowed by law, surviving the termination of this Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with its performance under this Agreement. A. Minimum Scope of Insurance Coverage shall be at least as broad as: Insurance Services Office ("ISO) Commercial General Liability Coverage Form No. CG 20 10 10 01 and Commercial General Liability Coverage — Completed Operations Form No. CG 20 37 10 01. 2. ISO Form No. CA 0001 (Ed. 1/87) covering Automobile Liability, Code 1 "any auto" or Code 8, 9 if no owned autos and endorsement CA 0025. 3. Worker's Compensation Insurance as required by the Labor Code of the State of California and Employers Liability Insurance. 4. Errors and Omissions liability insurance appropriate to the consultant's profession. Architects' and engineers' coverage is to be endorsed to include contractual liability. B. Minimum Limits of Insurance Consultant shall maintain limits no less than: General Liability: $1,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage including operations, products and completed operations. If Commercial General Liability Insurance or other form with a general aggregate limit is used, the general aggregate limit shall apply separately to the work performed under this Agreement, or the aggregate limit shall be twice the prescribed per occurrence limit. 2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage. Std — ProfSvcsAgreement- November 20, 2008 PAGE 3 OF 7 COU No. 3. Worker's Compensation and Employers Liability: Worker's compensation limits as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. 4. Errors and Omissions liability: $1,000,000 per occurrence. C. Deductibles and Self -Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects to the City, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. D. Other Insurance Provisions The policies are to contain, or be endorsed to contain, the following provisions: General Liability and Automobile Liability Coverages a. The City, it officers, officials, employees and volunteers are to be covered as additional insureds as respects; liability arising out of activities performed by or on behalf of the Consultant, products and completed operations of the Consultant, premises owned, occupied or used by the Consultant, or automobiles owned, hired or borrowed by the Consultant for the full period of time allowed by law, surviving the termination of this Agreement. The coverage shall contain no special limitations on the scope -of -protection afforded to the City, its officers, officials, employees or volunteers. b. The Consultant's insurance coverage shall be primary insurance as respects to the City, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees or volunteers shall be in excess of the Consultant's insurance and shall not contribute with it. C. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its officers, officials, employees or volunteers. d. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 2. Worker's Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the City, its officers, officials, employees and volunteers for losses arising from Consultant's performance of the work, pursuant to this Agreement. Std — ProfSvcsAgreemem- November 20, 2008 PAGE 4 OF 7 COU No. 3. Professional Liability Coverage If written on a claims -made basis, the retroactivity date shall be the effective date of this Agreement. The policy period shall extend for a period of one year from the Effective Date. 4. All Coverages Each Insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. E. Acceptability of Insurers Insurance is to be placed with admitted California insurers with an A.M. Best's rating of no less than A- for financial strength, AA for long-term credit rating and AMB -1 for short-term credit rating. F. Verification of Coverage Consultant shall furnish the City with Certificates of Insurance and with original Endorsements effecting coverage required by this Agreement. The Certificates and Endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The Certificates and Endorsements are to be on forms provided or approved by the City. Where by statute, the City's Workers' Compensation - related forms cannot be used, equivalent forms approved by the Insurance Commissioner are to be substituted. All Certificates and Endorsements are to be received and approved by the City before Consultant begins the work of this Agreement. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. If Consultant fails to provide the coverages required herein, the City shall have the right, but not the obligation, to purchase any or all of them. In that event, the cost of insurance becomes part of the compensation due the contractor after notice to Consultant that City has paid the premium. G. Subcontractors Consultant shall include all subcontractors or sub -consultants as insured under its policies or shall furnish separate certificates and endorsements for each sub- contractor or sub -consultant. All coverage for sub -contractors or sub -consultants shall be subject to all insurance requirements set forth in this Paragraph 6.1. 6.2 Indemnification. Notwithstanding the foregoing insurance requirements, and in addition thereto, Consultant agrees, for the full period of time allowed by law, surviving the termination of this Agreement, to indemnify the City for any claim, cost or liability that arises out of, or pertains to, or relates to any negligent act or omission or the willful misconduct of Consultant in the performance of services under this contract by Consultant, but this indemnity does not apply to liability for damages for death or bodily injury to persons, injury to property, or other loss, arising from the sole negligence, willful misconduct or defects in design by the City, or arising from the active negligence of the City. Std — ProfSvcsAgreement- November 20, 2008 PAGE 5 OF 7 COU No. "Indemnify," as used herein includes the expenses of defending against a claim and the payment of any settlement or judgment arising out of the claim. Defense costs include all costs associated with defending the claim, including, but not limited to, the fees of attorneys, investigators, consultants, experts and expert witnesses, and litigation expenses. References in this paragraph to City or Consultant, include their officers, employees, agents, and subcontractors. 7.0 CONTRACT PROVISIONS 7.1 Ownership of Work. All documents furnished to Consultant by City and all documents or reports and supportive data prepared by Consultant under this Agreement are owned and become the property of the City upon their creation and shall be given to City immediately upon demand and at the completion of Consultant's services at no additional cost to City. Deliverables are identified in the Scope -of -Work, Attachment "A". All documents produced by Consultant shall be furnished to City in digital format and hardcopy. Consultant shall produce the digital format, using software and media approved by City. 7.2 Governing Law. Consultant shall comply with the laws and regulations of the United States, the State of California, and all local governments having jurisdiction over this Agreement. The interpretation and enforcement of this Agreement shall be governed by California law and any action arising under or in connection with this Agreement must be filed in a Court of competent jurisdiction in Mendocino County. 7.3 Entire Agreement. This Agreement plus its Attachment(s) and executed Amendments set forth the entire understanding between the parties. 7.4 Severability. If any term of this Agreement is held invalid by a court of competent jurisdiction, the remainder of this Agreement shall remain in effect. 7.5 Modification. No modification of this Agreement is valid unless made with the agreement of both parties in writing. 7.6 Assignment. Consultant's services are considered unique and personal. Consultant shall not assign, transfer, or sub -contract its interest or obligation under all or any portion of this Agreement without City's prior written consent. 7.7 Waiver. No waiver of a breach of any covenant, term, or condition of this Agreement shall be a waiver of any other or subsequent breach of the same or any other covenant, term or condition or a waiver of the covenant, term or condition itself. 7.8 Termination. This Agreement may only be terminated by either party: 1) for breach of the Agreement; 2) because funds are no longer available to pay Consultant for services provided under this Agreement; or 3) City has abandoned and does not wish to complete the project for which Consultant was retained. A party shall notify the other party of any alleged breach of the Agreement and of the action required to cure the breach. If the breaching party fails to cure the breach within the time specified in the notice, the contract shall be terminated as of that time. If terminated for lack of funds or abandonment of the project, the contract shall terminate on the date notice of termination is given to Consultant. City shall pay the Consultant only for services Std — ProfSvcSAgreement- November 20, 2008 PAGE 6 OF 7 COU No. performed and expenses incurred as of the effective termination date. In such event, as a condition to payment, Consultant shall provide to City all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports prepared by the Consultant under this Agreement. Consultant shall be entitled to receive just and equitable compensation for any work satisfactorily completed hereunder, subject to off -set for any direct or consequential damages City may incur as a result of Consultant's breach of contract. 7.9 Execution of Agreement. This Agreement may be executed in duplicate originals, each bearing the original signature of the parties. Alternatively, this Agreement may be executed and delivered by facsimile or other electronic transmission, and in more than one counterpart, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. When executed using either alternative, the executed agreement shall be deemed an original admissible as evidence in any administrative or judicial proceeding to prove the terms and content of this Agreement. 7.10 Conflict between Agreement for Professional Service as Exhibit A. If any provision of this Agreement conflicts with or is inconsistent with a provision in Exhibit A, the provisions of this Agreement shall prevail. 8.0 NOTICES Any notice given under this Agreement shall be in writing and deemed given when personally delivered or deposited in the mail (certified or registered) addressed to the parties as follows: CITY OF UKIAH Robertson and Associates, CPA's Sage Sangiacomo, City Manager John Robertson, CPA 300 SEMINARY AVENUE 601 North State Street UKIAH, CALIFORNIA 95482-5400 Ukiah, CA 95482 9.0 SIGNATURES IN WITNESS WHEREOF, the parties have executed this Agreement the Effective Date: CONSULTANT BY: PRINT E: IRS IDN Number CITY O UKIAH BY: CITY MANAGER ATTEST kall��(441�— Std — ProtSvcsAgreemem- November 20, 2008 PAGE 7 OF 7 Date i' Date INOBERTSON & ASSOCIATES, CPAS Attachment 1 A PROFESSIONAL CORPORA71ON 1101 NORTH MAIN STREET 601 NORTH STATE STREET LAKEPORT. CA 95453 UKIAH, CA 95482 PHONE: (707) 263-9012 ♦ FAX: (707) 263-6001 PHONE: (707) 469-5711 ♦ FAX: (707) 468-0132 W W W.ROBERTSONCPA.COM TOLL FREE (800) 6194762 August 2, 2017 Mr. Sage Sangiacomo City Manager City of Ukiah 200 S School St Ukiah, CA 95482 To Mr. Sage Sangiacomo: This letter confirms our mutual understanding with respect to the engagement of Robertson & Associates, CPAs by City of Ukiah (Client) to provide professional services in connection with testing select transactions and analysis of the Ukiah Valley Golf Course (UVGC) operations for the twelve month period starting July 1, 2016 through June 30, 2017, to specify the terms of our engagement and to clarify the nature and extent of the services we will provide. The Agreed Upon Procedures are between City of Ukiah, CA (City) and Robertson and Associates, CPAs, A Professional Corporation (CPA) with the consent, cooperation and approval of Tayman Park Golf Group, INC. (TPGG) as confirmed by its signature below. The AUP relates to the Statement of Operations for the twelve (12) Months Ended June, 30 2017 of UVGC. The UVGC is a municipal golf course which operates as a Division of TPGG under lease from the City. Our engagement is to apply agreed-upon procedures, which will be performed in accordance with attestation standards established by the American institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures either for the purpose for which this report has been requested or for any other purpose. If, for any reason, we are unable to complete the procedures, we will describe any restrictions on the performance of the procedures in our report, or will not issue a report as a result of this engagement. Representations of City and TPGG: 1. The City owns and leases the real property and certain personal property of the UVGC to TPGG under the lease agreement dated July 1, 2012, as amended (Lease). 2. The City and TPGG are currently in negotiation to consider changing some of the terms of the Lease. To date, the City has made no representations as to what it may or may not agree to regarding such changes. 3. TPGG has represented to the City that that UVGC division's operating profitability has continued to deteriorate into persistent annual losses, because of continuing drought, followed by an unusually wet winter, the burden of excessively high water costs and other factors. 4. TPGG is organized as a single corporate entity with a financial year end of December 31St 5. UVGC is accounted for as a division of TPGQ and referred to as "UK' in TPGG financial records 6. Historically, TPGG has reported the UVGC division's operating results on an accrual basis to the City in twelve month periods ending June 30th, to accommodate the City's own financial year end. 7. The City, in exercising due diligence in the Lease negotiations, wishes an Independent Certified Public Accountant (CPA) to apply certain AUP to the financial information in the UVGC division Statement of Operations for the 12 Months ended June 30, 2017, in order to achieve a better understanding of the operating results of UVGC division for that period. 8. The City engages the CPA and will pay the cost of the AUP engagement as described herein. 9. TPGG has represented to the City that Ms. Carol Mungle, the Principal of Carol Mungle & Associates (Bookkeeper) provides bookkeeping services to TPGQ and performs on an outsource basis the customary tasks usually performed by an in-house controller, and that she will render the required UVGC division statement of operations to the CPA on behalf of TPGC; and cooperate fully in providing any needed financial records and back up information to the CPA during the AUP engagement. 10. TPGG will pay all costs for the time and efforts performed by the Bookkeeper and TPGG staff related to the AUP engagement. 11. The TPGG financial information provided will be treated by the City as proprietary information to the extent allowed by law. 12. The following AUP are designed to give that City the better understanding of the operating results of TPGG's UVGC division for the 12 Months ended June 30, 2017. This engagement will be designed to perform the following agreed-upon procedures, relating to the statement of operations for the twelve (12) month period from July 1, 2016 through June 30, 2017, as follows: 4. Revenue 4.1: CPA will sum the totals reported on the UVGC Monthly Sales Registers for the 12 months of July, 2016 to June, 2017. 4.2: CPA will compare, and reconcile as reasonably possible, the sum total from step 4.1 to total revenue as reported on the Statement, and note amount of difference, if any. 4.3 CPA will sum the total deposits as recorded on the UVGC monthly Savings Bank of Mendocino County Bank Statements for the 12 months of July, 2016 to June, 2017. 4.4: CPA will compare, and reconcile as reasonably possible, the sum total from step 4.3 to total revenue as reported on the Statement, and note amount of difference, if any. 4.5: CPA will select, without any pattern, any two days, in each of the 12 months of July, 2016 to June, 2017. 4.6 CPA, for each of the 24 days selected in Step 4.5, will trace daily sales (cash and check) as recorded in the daily UVGC sales journal to the corresponding cash bank deposit as recorded on the UVGC monthly Savings Bank of Mendocino County Bank Statement for that day. Note amount of difference, if any. (cash sale deposits are not banked daily, but each day's cash sales are deposited in a separate deposit). 4.7 CPA, for each of the 24 days selected in Step 4.5, will trace daily credit card sales as recorded in the daily sales journal to the corresponding credit card bank deposit as recorded on the UVGC monthly Savings Bank of Mendocino County Bank Statement for that day. Note amount of difference, if any. 5. Cost of Goods Sold 5.1 CPA will calculate and report each Cost of Sales expense, as a percentage of each category Sales, excluding freight, for the following Cost of Sales expenses on the Statement: Merchandise Food Liquor and Beer Non Alcoholic Operating Expenses 6. Shop: Wages, Payroll Tax, Workers Comp Insurance 6.1 CPA will compare the following expense amounts reported in the Statement to the general ledger account balance and report, and if possible explain, differences, if any. 6. 1.1 Shop Wages expense compared to 3241 -UK account balance. 6.1.2 Shop Payroll Tax Expense — Merchandise compared to 3242 -UK account balance. 6.1.3 Shop Workers Comp Insurance — Merchandise compared to 3243 -UK account balance. 6.2 CPA will compare the following expense amounts reported in the Statement to the total payroll by category in the Payroll Register for the twelve months ended June 30, 2017 and report, and if possible explain, differences, if any. 6.2.1 Shop Wages expense compared to Payroll Register total. 6.2.2 Shop Payroll Tax Expense — Merchandise compared to Payroll Register total. 6.2.3 Shop Workers Comp Insurance — Merchandise compared to Payroll Register total. 6.3 CPA will select, without any pattern, two (2) Shop Wages net payroll disbursements from the Payroll Register, in each of the twelve months July 2016 to June 30 2017. 6.4 CPA, for the twenty-four (24) net disbursements selected I Step 6.3, will trace the net disbursement amount for checks to the monthly TPGG Payroll Account Bank Statement, and trace direct deposits net amount to the direct deposit register and then trace the total of the direct deposit register to the charge against the TPGG Payroll Account Bank Statement, and report and if possible explain differences, if any. 7. Carts: Wages, Payroll Tax, Workers Comp Insurance 7.1 CPA will compare the following expense amounts reported in the Statement to the general ledger account balance and report, and if possible explain, differences, if any. 7. 1.1 Cart Wages expense compared to 3271 -UK account balance. 7.1.2 Cart Payroll Tax Expense compared to 3272 -UK account balance. 7.1.3 Cart Workers Comp Insurance compared to 3273 -UK account balance. 7.2 CPA will compare the following expense amounts reported in the Statement to the total payroll by category in the Payroll Register for the twelve months ended June 30, 2017 and report, and if possible explain, differences, if any. 7.2.1 Cart Wages expense compared to Payroll Register total. 7.2.2 Cart Payroll Tax Expense compared to Payroll Register total. 7.2.3 Cart Workers Comp Insurance compared to Payroll Register total. 8. Maintenance: Wages, Payroll Tax, Workers Comp Insurance 8.1 CPA will compare the following expense amounts reported in the Statement to the general ledger account balance and report, and if possible explain, differences, if any. 8. 1.1 Maintenance Wages expense compared to 3301 -UK account balance. 8.1.2 Maintenance Payroll Tax Expense — Merchandise compared to 3302 -UK account balance. 8.1.3 Maintenance Workers Comp Insurance — Merchandise compared to 3303 -UK account balance. 8.2 CPA will compare the following expense amounts reported in the Statement to the total payroll by category in the Payroll Register for the twelve months ended June 30, 2017 and report, and if possible explain, differences, if any. 8.2.1 Maintenance Wages expense compared to Payroll Register total. 8.2.2 Maintenance Payroll Tax Expense compared to Payroll Register total. 8.2.3 Maintenance Workers Comp Insurance compared to Payroll Register total. 8.3 CPA will select, without any pattern, two (2) Maintenance Wages net payroll disbursements from the Payroll Register, in each of the twelve months July 2016 to June 30 2017. 8.4 CPA, for the twenty-four (24) net disbursements selected in Step 8.3, will trace the net disbursement amount for checks to the monthly TPGG Payroll Account Bank Statement, and trace direct deposits net amount to the direct deposit register and then trace the total of the direct deposit register to the charge against the TPGG Payroll Account Bank Statement, and report and if possible explain differences, if any. 9. Carts — Equipment Lease/Rental 9.1 CPA will compare the total of all the monthly billings from vendors for Carts — Equipment Lease/Rental, for the twelve (12) months June 2016 to July 2017, to the account 3280 -UK account balance, and report and if possible explain, differences, if any. (Keep in mind that the Statement is prepared on the accrual basis, and vendor bills may overlap the June 30 year-end). 9.2 CPA will compare the total, of all the monthly billings from vendor(s) for Carts — Equipment Lease/Rental for the twelve (12) months June 2016 to July 2017, and compare the total to the Carts — Equipment Lease/Rental expense reported on the Statement and report and if possible explain, differences, if any. (Vendor bills may not be dated end of month, and may overlap the June 30 year end. That is acceptable as long as only 12 months of invoices have been charged to expense). 10. Water 10.1 CPA will compare the total of the twelve -monthly billings for water from the City of Ukiah, for the twelve (12) months June 2016 to July 2017, to the account 4330 -UK account balance, and report and if possible explain differences, if any. (Keep in mind that the Statement is prepared on the accrual basis, and City bills may overlap the June 30 year-end). 10.2 CPA will compare the total of the twelve -monthly billings for water from the City of Ukiah, for the twelve (12) months June 2016 to July 2017 and compare the total to the Water expense reported on the Statement, and report and if possible explain differences, if any. (City bills may not be dated end of month, and may overlap the June 30 year end. That is acceptable as long as only 12 months of invoices have been charged to expense). 11. Other Operating Expenses 11.1 CPA will select, without a pattern, fifteen (15) expense amounts recorded in the General Ledger in the months July 2016 to June, 2017 charged to any expense in the account range from 3310 -UK to 4324 -UK, excluding accounts:3530-UK, 3581 -UK, 3582 -UK, 3583 -UK, 3600 -UK, 3610 -UK, 3612 -UK, 3702 -UK, 3748 -UK, 4110 -UK, 4120 -UK and 4125 -UK. 11.2 CPA, for the fifteen items selected in Step 11. 1, will compare the expense amount of the item selected to the billed amount in the supporting pay package, and trace to the monthly TPGG Accounts Payable Bank Statement and report and if possible explain, differences, if any. 12. Changes to AUP 12.1If any of these steps cannot be accomplished when on site performing field work, the CPA shall contact the designated City representative immediately. 13. Report and Findings 13.1 Report will summarize results of our testing and include findings related to discrepancies found, if any. "Exhibit A" attached, contains the Chart of Accounts for TPGG as used for the financial recordkeeping and financial reporting of the UVGC (UK) division of TPGCX Our engagement is limited in scope and will be confined to our agreed-upon procedures. We have no obligation to perform any procedures beyond those listed. We will not be conducting an audit or review of the financial statements of UVGC, a division of TPGG, and therefore, we will not express an opinion or any other form of assurance on them. At the end of our engagement, we will submit a report listing the procedures performed and our findings. The report is intended solely for the use of necessary City staff, the City Council and TPGG, and should not be used by anyone else for any other purpose. Our report will include a statement indicating that had we performed additional procedures, other matters might have come to our attention that would have been reported to you. Accordingly, using this report for anything other than the original intent of the agreed-upon procedures could mislead the readers. You must notify us immediately if the original users of the report change. With respect to any services, work product, or other deliverables hereunder, or this engagement generally, the firm's liability to the Client shall in no event exceed the fees that it receives for the portion of the work giving rise to liability, nor shall the firm's liability include any special, consequential, incidental, or exemplary damages or loss, including any lost profits, savings, or business opportunity. The limitation on liability provisions of this engagement letter will apply to the fullest extent of the law, whether in contract, statute, tort (such as negligence), or otherwise. The parties' agreements and undertakings contained in this engagement letter, such as those pertaining to the limitation on liability, will survive the completion or termination of this engagement. The parties agree that their rights and obligations hereunder will be construed and governed under the laws of the California. Either party may terminate this engagement, with or without cause, by providing written notice to the other party. In the event of early termination for any reason, the client will be invoiced and agrees to remit payment for time and expenses incurred up to the end of the notice period together with reasonable time and expenses incurred to bring the engagement to a close in a prompt and orderly manner ("termination compensation"). If terminated by Consultant, the termination compensation shall not exceed the portion of the maximum not to exceed amount ("maximum amount'), as stated in Section 4.1 of the contract, determined by multiplying the maximum amount by a fraction the numerator of which is 90 and the denominator of which is the number of days that have elapsed on the date the notice of termination is given. Neither the client nor the firm shall have any liability to the other for any loss or consequential damage arising from early termination by either the client or the firm. John S. Robertson is the engagement partner for the services specified in this letter. His responsibilities include supervising Robertson & Associates, CPAs' services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the report. Prior to preparation and execution of this engagement letter, we discussed with you the fact that we provide clients with attest and accounting services, as well as services specifically focused on identifying and addressing weaknesses in internal controls (internal control review), and on searching for the existence of fraud within a company (fraud audit). We further explained the additional costs associated with such different levels of service. After consideration of such services, you have informed us that you wish to retain us to perform only the agreed upon procedures services described in this letter. Our engagement cannot be relied upon to disclose errors, irregularities, or illegal acts, including fraud or defalcations, which may exist. However, we will inform you of any such matters that come to our attention. Further, our engagement is not designed to provide assurance on internal controls or to identify reportable conditions, that is, significant deficiencies or material weaknesses in the design or operation of internal control. Accordingly, we have no responsibility to identify and communicate significant deficiencies or material weaknesses in your internal control as part of this engagement, and our engagement cannot be relied upon to disclose the same. However, during the procedures, if we become aware of such reportable conditions, we will communicate them to you. By your signature below, you acknowledge that you are responsible for management decisions and functions. That responsibility includes designating qualified individuals with the necessary expertise to be responsible and accountable for overseeing all the services we perform as part of this engagement, as well as evaluating the adequacy and results of the services performed. You are responsible for establishing and maintaining internal controls, including monitoring ongoing activities. We plan to begin our procedures on approximately August 8, 2017 and, unless unforeseeable problems are encountered, the engagement should be completed by August 18, 2017. To facilitate the timely completion of the engagement contemplated in this letter, you authorize us to send to or receive from you certain information, including correspondence via electronic means (i.e., email, ShareFile, etc.). This authorization extends to the electronic transmission of information to or from any third parties we may engage to assist us in the completion of the engagement. The text of such correspondence, as well as any attachments thereto such as draft or final financial statements or other documents, may contain information of a sensitive nature. We represent to you that we have made a good faith effort to ensure that the security of our information technology infrastructure and our policies and procedures for handling client information meet customary standards. However, due to the inherent limitations of currently available security systems, we cannot provide absolute assurance that any information transmitted to or from us via electronic means will not be compromised as a result of unauthorized access to our files. As such, you agree to hold us harmless with respect to any loss you may suffer as a result of such compromise. All documentation for this engagement remains the property of firm and constitutes confidential information. All information you provide to us in connection with this engagement will be maintained by us on a strictly confidential basis. In the event we receive a subpoena or summons requesting that we produce documents from this engagement or testify about the engagement, we will notify you prior to responding to it if we are legally permitted to do so. You may, within the time permitted for our firm to respond to any request, initiate such legal action as you deem appropriate to protect information from discovery. If you take no action within the time permitted for us to respond or if your action does not result in a judicial order protecting us from supplying requested information, we may constitute your inaction or failure as consent to comply with the request. Time incurred in connection with subpoenas, and/ or other related legal matters involving you, and or your account(s), will be billed at our normal per diem rates. In connection with this engagement, we may communicate with you or others via email transmission. As emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we cannot guarantee or warrant that emails from us will be properly delivered and read only by the addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for interception or unintentional disclosure of emails transmitted by us in connection with the If any portion of this agreement is deemed invalid or unenforceable said finding shall not overate to invalidate the remainder of the terms set forth in this engagement letter. This section shall survive completion or termination of this Agreement but under no circumstances shall either party call for mediation of any claim or dispute arising out of this Agreement after such period of time as would normally bar the initiation of legal proceedings to o litigate such claim or dispute under the laws of the California If mediation fails to resolve the dispute or claim the parties hereby agree to submit any action claim or counterclaim whether based in contract tortstatutory rights or otherwise to the Superior Court of the State of California The parties also agree that the laws of the State of California shall govern all legal proceedings arising from this engagement. The party(ies) signing this engagement letter authorize and represent that they have the legal authority to bind the person(s) and/ or entity(ies) listed on this contract. All parties to this agreement acknowledge and agree that facsimile, electronic and multi-party signatures used to execute this document will legally bind each party to the terms of this agreement. We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign a copy and return it to us. We are looking forward to working with you on this engagement. RESPONSE: This letter correctly sets forth the understanding between the City of Ukiah and Robertson & Associates, CPAs as the following: City of Ukiah Attest: 'h1l, v istine Lawler, City Clerk Approved as to form: Dav appo , Cit Att me Robertson & Associates, CPAs, A Professional Corporation By: I CJ John . R bertson, CPA Its: C O Tayman Park Golf Course, Inc. By:,r? �C James St art ItPres' ent Chart of Accounts Exhibit A TAYMAN PARK GOLF GROUP, INC. (TPG) Account Number Description Status Current Assets 1001 -UK Cash on Hand Active 1100 -UK Accounts Receivable Active 1101 -UK Other Receivables Active 1105 -UK Receivable - Remodel Costs Active 1106 -UK Receivable - CIP Active 1150 -UK Employee Advances Active 1200 -UK Prepaid Expenses Active 1201 -UK Prepaid Rent Active 1205 -UK Prepaid Workers Comp Active 1206 -UK Prepaid Licenses Active 1210 -UK Prepaid Liab Insurance Active 1219 -UK Prepaid Fertilizer Active 1221 -UK Prepaid Unsecured Business Tax Active 1222 -UK Prepaid Property Tax Active 1306 -UK Inventory - Beer Active 1320 -UK Inventory - Shop Active 1322 -UK inventory - Other Active Fixed Assets 1501 -UK Equipment Active 1505 -UK Furniture & Fixtures Active 1516 -UK Leasehold Improvements Active 1519 -UK Pro Shop Construction Active 1520 -UK Cart Barn Improvement Active 1525 -UK Accumulated Depreciation Active Other Assets 1630 -UK Liquor License Active 1800 -UK Suspense Active Current Liabilities 2000 -UK Accounts Payable Active 2013 -UK Wage Garnishment Active 2020 -UK Insurance Payable - Prop/Liabilty Active 2030 -UK Tournament Deposit Active 2031 -UK Junior Golf Team Active 2033 -UK League Deposits Active 2035 -UK Rental Hall Deposit Active 2038 -UK On Book Account-Tayrnan Active 2078 -UK Sales Tax Payable Active 2080 -UK Gift Certificates Active Long Team Liability 2305 -UK Exchange Bank - #67767 Active Equity 2950 -UK Retained Earnings Active Revenue 3001 -UK Golf - Green Fees Active 3003 -UK Tournament Fees Active 3005 -UK Golf - Annual Members Active 3010 -UK Golf - Cart Fees Active 3015 -UK Golf -Annual Trail Fees Active 3023 -UK Lesson Fees Active 3030 -UK Food - Non Restaurant Active 3040 -UK Merchandise Sales Active Run Date: 71712017 2:22:46PM Page: 1 GIL Date: 717/2017 Chart of Accounts TAYMAN PARK GOLF GROUP, INC. (TPG) Account Number Description Status 3045 -UK Grip Income Active 3050 -UK Miscellaneous Income Active 3060 -UK Food Sales Active 3062 -UK Liquor Sales Active 3063 -UK Beer Sales Active 3065 -UK Non Alcohol Sales Active 3070 -UK Banquet Hail Rentals Active Cost of Sales Employee Benefits Active 3121 -UK Merchandise Purchases Active 3122 -UK Merchandise Discounts Active 3123 -UK Freight Active 3124 -UK Merchandise Mgmnt Wages Active 3125 -UK Direct Supplies/Equipment Active 3140 -UK Food Purchases Active 3141 -UK Liquor Purchases Active 3142 -UK Beer Purchases Active 3143 -UK Wine Purchases Active 3144 -UK Non Aicholic Purch. Active 3155 -UK Restaurant Supplies Active 3160 -UK Bar Supplies Active 3172 -UK COS Banquet Hall Food COG Active 3177 -UK COS Banquet Hall Beer COG Active Operating Expenses 3201 -UK Management Salary Active 3203 -UK Management Payroll Tax Active 3204 -UK Management Workers Comp Active 3205 -UK Management Consultant Active 3241 -UK Shop - Wages Active 3242 -UK Shop P/R Tax Exp- Merch Active 3243 -UK Shop - WIC ins - March Active 3245 -UK Employee Benefits Active 3250 -UK Shop - Dues & Subscriptions Active 3254 -UK Shop - Equipment Repairs Active 3255 -UK Shop - Grip Expense Active 3256 -UK Shop - Freight Out Active 3257 -UK Shop - Lesson Expense Active 3258 -UK Mgmt - Lesson Expense Active 3260 -UK Shop - Miscellaneous Active 3261 -UK Shop - Pencils Active 3262 -UK Shop - Scorecards Active 3263 -UK Shop - Operating Supplies Active 3264 -UK Shop - Outside Services Active 3265 -UK Shop - Repair & Maint. Active 3268 -UK Shop - Training & Education Active 3271 -UK Carts - Wages Active 3272 -UK Carts - PIR Tax Expense Active 3273 -UK Carts - Workers Comp Ins Active 3280 -UK Carts - Equipment Lease/Rental Active 3284 -UK Carts - Equipment Repairs Active 3285 -UK Carts - Miscellaneous Active 3290 -UK Carts - Operating Supplies Active 3292 -UK Carts - Outside Services Active 3295 -UK Carts - Repairs & Maint. Active 3301 -UK Maint - Wages Active 3302 -UK Maint - PIR Tax Expenses Active 3303 -UK Maint - Workers Comp Ins Active 3304 -UK Maint. - Supervisor Wages Active 3310 -UK Maint - Equipment Lease Active Run Date. 7/7/2017 2:22:46PM Page: 2 GIL [date; 76/2017 Chart of Accounts TAYMAN PARK GOLF GROUP, INC. (TPG) Account Number description status 3312 -UK Maint -Equipment Rental Active 3315 -UK Maint- Equip. Repairs & Maint. Active 3320 -UK Maint - Chemicals Active 3325 -UK Maint - Fertilizer Active 3328 -UK Maint - Irrigation Repairs Active 3330 -UK Maint - Landscaping Active 3332 -UK Maint.-Water Conservation Active 3350 -UK Maint - Misc. Active 3355 -UK Maint - oil, Gas & Lube Active 3357 -UK Maint - Operating Supplies Active 3360 -UK Maint - Outside Services Active 3365 -UK Maint - Repairs & Maintenance Active 3368 -UK Maint - Sand Active 3370 -UK Maint - Seed Active 3375 -UK Maim - Training & Education Active 3440 -UK Range - Balis Active 3450 -UK Range - Operations Active 3460 -UK Range - Outside Services Active 3530 -UK Employee Benefits Active 3581 -UK Beverage Cart Wages Active 3582 -UK Beverage Cart Payroll Tax Exp - F&B Active 3583 -UK Beverage Cart WIC - F&B Active 3600 -UK Overall Management Active 3601 -UK Advertising & Marketing (Ads) Active 3602 -UK Promo - Customers Active 3603 -UK Promo - Marketing Active 3605 -UK Promo - Fundraisers Active 3606 -UK Promo - I nhouse Active 3608 -UK Promo - Sponsorship Active 3609 -UK Promo Website Active 3610 -UK Credit Card miscounts Active 3612 -UK OVRL Mgmt PR Taxes Active 3615 -UK Decorating Active 3620 -UK Delivery Charges Active 3622 -UK Donations Active 3625 -UK Janitorial Expense Active 3628 -UK Janitorial Supplies Active 3630 -UK Linens Active 3635 -UK Menu & Wine List Active 3640 -UK Band Expense Active 3645 -UK Operating Expense Active 3650 -UK Overages/Shortages Active 3665 -UK R&M - Building Active 3668 -UK R&M - Computers Active 3670 -UK R&M - Equipment Active 3674 -UK R&M - Pest Mgmt Active 3702 -UK Accounting Active 3710 -UK Band Expense Active 3715 -UK Bank Charges Active 3730 -UK Dues and Subscriptions Active 3735 -UK Fees, Permits & Licenses - Corpor Active 3736 -UK Fees, Permits & Licenses - Busine Active 3737 -UK Fees, Permits & Licenses - Other Active 3738 -UK Fees, Permits & Licenses -Bus tax Active 3740 -UK Internet Access Active 3748 -UK Legal Fees Active 3750 -UK Misc. Expense Active 3755 -UK Office Supplies Active 3758 -UK Postage Active 3760 -UK Professional Services Active 3761 -UK Professional Mgmnt Services Active Page: 3 Run date: 71712017 2:22:46PM G/L Date: 7/7/2017 Chart of Accounts TAYMAN PARK GOLF GROUP, INC. (TPG) Account Number Description Status 3780 -UK Telephone Active 3782 -UK Telephone - Cellular Active 3783 -UK Utility/Cable Active 3785 -UK Training & Education Active 3790 -UK Travel Active 4110 -UK CIP Account Active 4120 -UK Insurance - Liability Active 4125 -UK Insurance - Other Active 4150 -UK Property Taxes Active 4210 -UK Lease Expense Active 4212 -UK Security Expense Active 4310 -UK Electric Active 4311 -UK Gas Utility Active 4315 -UK Fuel Active 4320 -UK Refuse Active 4324 -UK Sewer Active 4330 -UK Water Active 5210 -UK Corporate - Salary Active 5215 -UK Corporate - Payroll Taxes Active 5222 -UK Corporate - Bus. Development Active 5225 -UK Corporate - Dues & Subscriptions Active 5230 -UK Corporate - Entertainment Active 5240 -UK Corporate - Gifts/Donation Active 5245 -UK Corporate - Legal Active 5250 -UK Corporate - Marketing Active 5255 -UK Corporate - Office Active 5260 -UK Corporate - Promotion Active 5280 -UK Corporate -Telephone Active 5295 -UK Corporate - Travel Active Other Income/Expenses 6001 -UK Interest Income Active 6110 -UK Exchange Bank Loan interest Active 6120 -UK interest Expense - Credit Card Active 6130 -UK Interest Expense - Lease Active 6140 -UK Interest - Other Active Operating Expenses 7501 -UK FV Labor Kitchen Active Run Date: 71712017 2:22:46PM Page: 4 G/L Dater: 7/7/2017 City of Ukiah Agreed Upon Procedures for Tayman Park Classification Engagement Director Audit Coordinator Senior Auditor Auditor Clerical Totals Out of Pocket Costs (mileage, meals, copies) All -Inclusive Audit Fee Estimated Billing Hours Rates 6 $ 6 14 12 2 Attachment 2 2016/2017 190 $ 1,140 90 540 112 1,568 106 1,272 65 130 4,650 350 $ 5,000 �� `' CERTIFICATE OF LIABILITY INSURANCE DATE( INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER 08/08/2017/1 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the pollcy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: John Lattimore John Lattimore Lataaazr- au 116 South Main St PHONE arc o Ext _(707) 463-0500 ac No:(707) 463-0515 aoo ss,john.lattimore.jhsb@statefarm.com ) Ukiah, CA 95482 INSURERS) AFFORDING COVERAGE NAIL g +.f;'%r�;'wR INSURER State Farm General Insurance Company 25151 $ 5,000 INSURED Robertson & Associates CPA's, A ProfessionalINSURERB State Farm -Mutual Automobile Insurance Company 25178 Corp GEWL AGGREGATE LIMIT APPLIES PER: 55 1st St, STE G INSURER C : POLICY PRO- LOC Lakeport, CA 95453-4842 INSURER 0: JECT PRODUCTS - COMP/OP AGG INSURERS: INSURER F • {'OVFRAC�FS: f.cG�T.�.nA�rer ... ......-.._ - — —"'= I rcCVtWUN IMUMULK: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER NAMED ABOVE FOR THE POLICY PERIOD DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID TO ALL THE TERMS, CLAIMS. INSR ADDL SUER LTR TYPE OF INSURANCE IN POLICY NUMBER MPIO�LDpY EFF EXP MMOUCY lOD>Y A XCOMMERCIAL GENERAL LIABILITY LIMITS 97-F5-7159-0 09/19/2016 09/1912017 CLAIMS -MADE o OCCUR EACH OCCURRENCE $ 1,000,000 PREMISES fEa occurrence $ MED EXP (Any one person) $ 5,000 PERSONAL & ADV INJURY $ GEWL AGGREGATE LIMIT APPLIES PER: POLICY PRO- LOC GENERAL AGGREGATE $ 2,000,000X JECT PRODUCTS - COMP/OP AGG $ OTHER: B AUTOMOBILE LIABILITY 378 4772-A27-05 0712712017 01/27/2018 COMBINED SINGLE LIMIT Ea oxidant $ 1,000,000 ANY AUTO BODILY INJURY (Per person) $ ALL OWNED X SCHEDULED BODILY INJURY (Per accident) $ AUTOS AUTOS HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE $ 1,000,000 L] Per accident UMBRELLA LIAR ° HOCCUR EACH OCCURRENCE $ EXCESS LIAR CLAIMS -MADE AGGREGATE DED RETENTIONS WORKERS COMPENSATION $ AND EMPLOYERS' LIABILITY YIN SF TUTS ERH- ANY PROPRIETORIPARTNER/EXECUTIVE❑ OFFICERIMEMBER EXCLUDED? N!A EL EACH ACCIDENT $ (Mandatory in E.L. DISEASE -EA EMPLOYE $ If yes, describe under DESCRIPTION OF OPERATIONS below E.L DISEASE - POLICY LIMIT $ I DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORO 101, Additional Remarks Schedule, may be attached if more space is required) Accounting & Auditing Services /^L-DT�C.F ATC VAI .1 C.1 Maya Simerson, Project & Grant Administrator City of Ukiah 300 Seminary Ave. Ukiah, CA 95482 ACORD 25 (2014101) GANGELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED O 1988-2014 ACORD CORPORATION. All rights reserved. The ACORD name and logo are istered marks of ACORD 1001486 132849.9 02-04-2014 allrisks Corporate Office 10150 York Road, 5th Floor Hunt Valley, MD 21030 (800) 366-5810 or (410) 828-5810 Fax: (410) 828-8179 www.allrisks.com CERT'IFIC.ATE OF INSURANCE TO: Maya Simerson Project & Grant Administrator City of Ukiah Ukiah, CA 95482 This is to certify that the described insurance is in force at this date with: MARKEL INSURANCE COMPANY NAME AND ADDRESS OF INSURED: ROBERTSON & ASSOCIATES, CPAS 1101 N. Main Street Lakeport, CA 95453 TYPE OF INSURANCE: ACCOUNTANTS PROFESSIONAL LIABILITY AMOUNT OF COVERAGE $1,000,000 per claim 1$3,000,000 annual aggregate POLICY PERIOD February 12, 2017 to February 12, 2018 POLICY NUMBER AK301531 This certificate is furnished to you as a matter of information only and confers no rights upon the Certificate holder. The issuance of the Certificate does not make the person or organization to whom it is issued an additional insured, nor does it modify in any matter the Policy between the Insured and the Insurers. Any amendment, change or extension of such Policy can only be effected by special endorsement attached thereto. In the event of cancellation of the aforementioned Policy by the undersigned, the undersigned will endeavor to give 30 days written notice to the party to whom this Certificate is issued, but failure to give such notice shall impose no obligation upon the undersigned. DATE: August 7, 2017 Authorized Represen five t1t1MGA OArizona a California • DC Metro o Florida • Georgia . Illinois ` Maryland New York • North Carolina • Pennsylvania a Tennessee d Virginia Washington StateFann CALIFORNIA A. . INSURANCE CARD State Farm Mutual Automobile Insurance Company. PO Box 803922 Richardson, TX 75085.3922 INSURED ROB9RT.SON & ASSOCIATES CPAS A IMUTL PROFESSIONAL CORP VOL POLICY NUMBER8784772.A27-05 - EFFECTIVE YR 2016 MAKE SUBARU JUL 27 2017 TO JAN 27 2018 MODEL FORESTER VIN JF2SJAXCSGH473191. s AGENT JOH}NgLATTIMORE 2433•bA4 CO@@VECp pAp��G PR6VIIppaE-0D BY THE POLICYIMEETS THE MINIMUM LIABILiTV LIMITS COVERAGES A 0 )ffi 61000 H U Ut SEE REVERSE SIDE FOR AN EXPLANATION, Preferred___Em_ plovers I NSU R�A N C E CO M P A N Y 08/23/16 VANTREO INSURANCE BROKERAGE 100 STONY POINT ROAD SUITE 160 SANTA ROSA, CA 95401 Insured Name: ROBERTSON & ASSOCIATES, C. P. A.'S, INC. Policy Number: WKN 155697-3 Thank you for choosing Preferred Employers Insurance Company. Enclosed is the original policy for your client and an agency copy for your files. Please review these documents and call us if you have any questions or comments. A claims kit will be mailed directly to each of the insured's business locations. This policy is direct bill. Premium will be billed and collected by Preferred Employers Insurance Company in the following manner: Deposit/Installment # Deposit and Assessments 1 2 3 4 5 6 7 8 9 Amount Billing Date Due Date $620.00 10/01/16 10/21/16 $483.00 11/01/16 11/21/16 $483.00 12/01/16 12/21/16 $483.00 01/01/17 01/21/17 $483.00 02/01/17 02/21/17 $483.00 03/01/17 03/21/17 $483.00 04/01/17 04/21/17 $483.00 05/01/17 05/21/17 $483.00 06/01/17 06/21/17 $483.00 07/01/17 07/21/17 Total Estimated Policy Premium plus Assessments: $4,967.00 Deposit premiums do not include any installment fee. An installment fee of $8 will apply to future installments, if any, and will be indicated on your invoice. Sincerely, Preferred Employers Insurance Company P. O. BOX 85478, SAN DIEGO, CA 92186-5478 888-472-9001 Workers Compensation and Employers Liability Insurance Policy Information Page A Stock Insurance Company Corporate Offices: San Diego , CA Carrier Code: 00403 Policy Number: WKN 155697-3 Preferred _Employers I N SU R A N C E C O M P A N Y Renewal of: WKN 155697-2 FEIN: 68-0290978 1. The Insured Name & Mailing Address: ROBERTSON & ASSOCIATES, C. P. A.'S, INC. 55 1 ST STREET Type of Entity: Corporation SUITE 306 LAKEPORT, CA 95453 Other Insured Names/Workplaces not shown above: See attached schedule" 2. Policy Period: This policy is effective from 10/01/16 to 10/01/17 12:01 A.M. 3. Coverage: A. Workers Compensation Insurance: Part One on the policy applies to Workers Compensation Law of the state(s) listed here: CALIFORNIA B. Employers Liability Insurance : Part Two of the policy applies to work in each state listed in Item 3. The limits of our liability under Part Two are: Bodily Injury by Accident $1,000,000 each accident. Bodily Injury by Disease $1,000,000 policy limit. Bodily Injury by Disease $1,000,000 each employee. C. Other States Insurance: Part Three of the policy applies to the states, if any, listed here: NONE D. Endorsements and schedules included with this policy: PE1101, PE1102, PE1107, PE1111, PE1119A, PE1127A, PN049901C, PN04990213, PN049907, WC000000 C, WC000422 B, WC040416, WC040422 4. Premium: The premium for this policy will be determined by our manuals of rules, classifications, rates and rating plans. All information required below is subject to verification andchange by audit. See Classification and Rating Schedule Deposit premiums do not include any installment fee. An installment fee of $8 will apply to future installments, if any, and will be indicated on your invoice. Minimum Premium: $750 Total Estimated Policy Premium: $4,827 Billing: Direct Premium Adjustment Period: Annual/Interim Deposit Premium: $480 Producer: VANTREO INSURANCE BROKERAGE 100 STONY POINT ROAD SUITE 160 SANTA ROSA, CA 95401 (707) 546 - 2300 Issue Date: 08/23/16 at SAN DIEGO, CA PEI 100 04/01/98 A/uthorized Re resentati!ve Workers Compensation and Employers Liability P_r_efe_r_red_Eppo ers Insurance Policy Information Page � I N S U R A N C E C O M P A N Y Policy Number: WKN 155697-3 Classification and Rating Schedule Estimated Class Code Description Payroll Rate Premium 8803 AUDITORS, ACCOUNTANTS, FACTORY 1,125,200 0.39 $4,388 COST OR OFFICE SYSTEMATIZERS --ALL EMPLOYEES-- INCLUDING CLERICAL OFFICE EMPLOYEES TERRORISM RISK INSURANCE ACT 0.039 $439 CA FRAUD ASSESSMENT 0.0017410 $8 CA WCARF ASSESSMENT 0.0034330 $15 CIGA SURCHARGE 0.0200000 $97 CA UEBTF ASSESSMENT 0.0005320 $2 CA SIBTF ASSESSMENT 0.0011910 $5 CA OSHF ASSESSMENT 0.0019250 $8 CA LECF ASSESSMENT 0.0012150 $5 Total Policy Amount $4,967 /Authorized R sentative PE1101 04/01/98 Workers Compensation and Employers Liability Insurance Policy Information Page Policy Number: WKN 155697-3 Location: PE1102 04/01/98 Insured NameMorkplace Schedule 55 1ST STREET SUITE 306 LAKEPORT CA 95453 601 NORTH STATE STREET UKIAH CA 95482 55 FIRST STREET BOX "G" LAKEPORT CA 95453 Preferred Employers I N S U R A N C E C 0 M P A N Y Autnonzed Kepresentative Preferred Employers A N C E C O M P= N�i WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 04 04 16 TERRORISM PREMIUM ENDORSEMENT — CALIFORNIA This endorsement is notification that your insurance carrier is charging premium for losses that may occur in the event of an act of terrorism. Your policy provides coverage for workers compensation losses caused by acts of terrorism, including workers compensation benefit obligations dictated by state law. Coverage for such losses is still subject to all terms, definitions, exclusions, and conditions in your policy, and any applicable federal and/or state laws, rules or regulations. For purposes of this endorsement, an "act of terrorism" is defined as: a. Any act that is violent or dangerous to human life, property or infrastructure; and b. The act has been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. The premium charge for the coverage your policy provides for workers compensation losses caused by an act of terrorism is shown in item 4 of the information Page or in the Schedule below. Schedule State CA Rate per $100 of payroll 0.0390000 This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Endorsement Effective 10/01/16 Policy No. WKN 155697-3 Endorsement No. 1 Insured ROBERTSON & ASSOCIATES, C. P. A.'S, INC. Insurance Company PREFERRED EMPLOYERS INSURANCE COMPANY Countersigned By O HCl Includes © Copyright 2007 material of the National Council on Compensation Insurance, Inc. Used with permission. All rights reserved. Workers Compensation and Employers Liability Insurance Policy Preferred __Employers I N S U R A N C E�C 0 M P A N Y Private Corporations Where the Officers and Directors are Sole Shareholders If this policy is issued to a private corporation, the entire remuneration earned by each executive officer covered by this policy shall be used as the basis of premium subject to a minimum remuneration of $45,500 and a maximum remuneration of $117,000 per annum for each such executive officer. Partnerships/Limited Liability Company/Limited Liability Partnership If this policy is issued to a partnership, limited liability company or limited liability partnership, the entire remuneration, including the annual amount of wages, salary, emoluments or profits earned by each partner, shall be used as the basis of premium subject to a minimum remuneration of $45,500 per annum and a maximum remuneration of $117,000 per annum. Nothing in this endorsement shall vary, alter, waive or extend any of the terms, conditions or limitations of this policy other than as stated above. Nothing elsewhere in this policy shall be held to vary, alter, waive or limit the terms, conditions, agreements or limitations of this endorsement. This Endorsement when attached to Policy Number: WKN 155697-3 issued to ROBERTSON & ASSOCIATES, C. P. A.'S, INC. shall be valid and shall form part of referenced policy. The effective date of this endorsement is 10/01/16 at 12:01 A.M. Endorsement No.: 2 Producer Number: 58110 Agency Name: VANTREO INSURANCE BROKERAGE PEI111 05/01/98 Date Issued: 08/23/1166�% /Authorized Representative Workers Compensation and Employers Liability Pr_e_Uferred qr hN�S Em to Insurance Policy R A N _ n N C E C O M P A N Y Premium Payment Schedule Endorsement Installment # Amount Due Date Renewal Deposit $480 10/21/2016 1 $483 11/21/2016 2 $483 12/21/2016 3 $483 01/21/2017 4 $483 02/21/2017 5 $483 03/21/2017 6 $483 04/21/2017 7 $483 05/21/2017 8 $483 06/21/2017 g $483 07/21/2017 The installments will be billed by Preferred Employers. An installment fee of $8.00 will be added to each scheduled installment, excluding the deposit. PLEASE NOTE: This policy may be subject to interim payroll verification which can result in an adjustment to the annual premium. Nothing in this endorsement shall vary, alter, waive or extend any of the terms, conditions or limitations of this policy other than as stated above. Nothing elsewhere in this policy shall be held to vary, alter, waive or limit the terms, conditions, agreements or limitations of this endorsement. This endorsement when attached to Policy Number: wKN 155697-3 issued to ROBERTSON & ASSOCIATES, C. P. A.'S, INC. shall be valid and shall form part of referenced policy. The effective date of this endorsementis 10/01/16 at 12:01 A.M. Endorsement No.: 3 Producer Number: 58110 Agency Name: VANTREO INSURANCE BROKERAGE PE1119A 05/01/12 Date Issued: 08/23/16 Authorized Representative Workers Compensation and Employers Liability _Preferre_d_ E to ers Insurance Policy _ ' `° I N S U R A N C E �C 0 M P A N Y California Cancellation Endorsement This endorsement applies only to the insurance provided by the policy because California is shown in Item 3A of the Information Page. The cancellation condition in Part Six (Conditions) of the policy is replaced by these conditions: Cancellation 1. You may cancel this policy. You may mail or deliver advance written notice to stating when the cancellation is to take effect. 2. We may cancel this policy for one or more of the following reasons: a. Non-payment of billed premium; b. Failure to report payroll; c. Failure to permit us to audit payroll as required by the terms of this policy or of a previous policy issued by us; d. Failure to pay any additional premium resulting from an audit of payroll required by the terms of this policy or any previous policy issued by us; e. Material misrepresentation made by you or your agent; f. Failure to cooperate with us in the investigation of a claim; g. Failure to comply with Federal or State safety orders; h. Failure to comply with written recommendations of our designated safety and health representatives; i. The occurrence of a material change in the ownership of your business; j. The occurrence of any change in your business or operation that requires additional or different classification for premium calculation; k. The occurrence of any change in your business or operation that materially increases the hazard for frequency or severity of loss; I. The occurrence of any change in your business or operation, which contemplates an activity, excluded by our reinsurance treaties. 3. If we cancel your policy for any of the reasons listed in (a) through (f), we will give you 10 days advance written notice, stating when the cancellation is to take effect. Mailing that notice to you at your mailing address shown in Item 1 of the Information Page will be sufficient to prove notice. If we cancel your policy for any of the reasons listed in item (g) through (1), we will give you 30 days advance written notice; however, in the event of cancellation and reissuance of a policy effective upon a material change in ownership or operations, notice will not be provided. 4. The policy period will end on the day and hour stated in the cancellation notice. Nothing in this endorsement shall vary, alter, waive or extend any of the terms, conditions or limitations of this policy other than as stated above. Nothing elsewhere in this policy shall be held to vary, alter, waive or limit the terms, conditions, agreements or limitations of this endorsement. This endorsement when attached to Policy Number: WKN 155697-3 issued to ROBERTSON & ASSOCIATES, C. P. A.'S, INC. shall be valid and shall form part of referenced policy. The effective date of this endorsement is Endorsement No.: 4 Producer Number: 58110 Agency Name: VANTREO INSURANCE BROKERAGE PE1107 05/01/98 10/01/16 at 12:01 A.M. Date Issued: 08/23/16 Authorized Representative Preferred EMOOTT§ I N S U R AN C E C O M P A N Y Notice to Policyholder Regarding Your Workers' Compensation Policy Policy Number: WKN 155697-3 Policyholder Notice California Insurance Guarantee Association (CIGA) Surcharge Companies writing property and casualty insurance in California are required to participate in the California Insurance Guarantee Association. If a company becomes insolvent, the California Insurance Guarantee Association settles unpaid claims and assesses each insurance company for its fair share. California law requires all companies to surcharge policies to recover these assessments. If your policy is surcharged, CA Surcharge (CIGA Surcharge) with an amount, it will be displayed on your Classification and Rating Schedule and on the deposit billing statement. This notice does not change the policy to which it is attached. Preferred Employers I N S U R A N C E C O M P A N~uFY Safety and Health Services Dear Policyholder, Thank you for selecting Preferred Employers Insurance as your workers' compensation carrier. We are confident we will be an asset to your business. An important element of our partnership is providing professional safety and health services, at no additional expense to you. We will work with you to: 1. Identify hazards that can contribute to employee injuries. 2. Conduct surveys to evaluate the use of hazardous materials. 3. Assist with the development of your Injury and Illness Prevention Program to meet Senate Bill 198 requirements. 4. Provide educational materials and training programs to help your employees understand their safety responsibilities. 5. Review injury records to identify causes of employee injuries. We will send additional safety bulletins/materials to you during the policy period. Your claims kit contains a fraud prevention poster. Please post this in an appropriate location. To talk to a safety and health consultant call our Customer Service Hotline at (888) 472-9001. You may send comments about our Safety and Health consultation services by writing to: State of California, Director of Industrial Relations, Division of Occupational Safety and Health, P.O. Box 420603, San Francisco, CA 94142. PE1062 P.O. Box 85838 • San Diego, CA 92186-5838 • Facsimile 888/472-9490 7-03 11/01/04 PN 04 99 01 C (Ed. 04-04) POLICYHOLDER NOTICE YOUR RIGHT TO RATING AND DIVIDEND INFORMATION INFORMATION AVAILABLE TO YOU A. Information Available from Us - Preferred Employers Insurance Company (1) General questions regarding your policy should be directed by mail to Preferred Employers Insurance Company, P.O. Box 85478 San Diego, CA 92186-5478 or telephone 888-472-9224. (2) DIVIDEND CALCULATION. If this is a participating policy (a policy on which a dividend may be paid), upon payment or non-payment of a dividend, we shall provide a written explanation to you that sets forth the basis of the dividend calculation. The explanation will be in clear, understandable language and will express the dividend as a dollar amount and as a percentage of the earned premium for the policy year on which the dividend is calculated. (3) CLAIMS INFORMATION. Pursuant to Sections 3761 and 3762 of the California Labor Code, you are entitled to receive information in our claim files that affects your premium. Copies of documents will be supplied at your expense during reasonable business hours. For claims covered under this policy, we will estimate the ultimate cost of unsettled claims for statistical purposes eighteen months after the policy becomes effective and will report those estimates to the Workers' Compensation Insurance Rating Bureau of California (WCIRB) no later than twenty months after the policy becomes effective. The cost of any settled claims will also be reported at that time. At twelve-month intervals thereafter, we will update and report to the WCIRB the estimated cost of any unsettled claims and the actual final cost of any claims settled in the interim. The amounts we report will be used by the WCIRB to compute your experience modification if you are eligible for experience rating. B. Information Available from the Workers' Compensation Insurance Rating Bureau of California (1) The WCIRB is a licensed rating organization and the California Insurance Commissioner's designated statistical agent. As such, the WCIRB is responsible for administering the California Workers' Compensation Uniform Statistical Reporting Plan -1995 (USRP) and the California Workers' Compensation Experience Rating Plan -1995 (ERP). Contact information for the WCIRB is: WCIRB, 525 Market Street, Suite 800, San Francisco, California 94105-2767, Attention: Customer Service. You may also contact WCIRB Customer Service at 1-888-229-2472, by fax at 415-778-7272, or via the Internet at the WCIRB's website: http://www.wcirbonline.org. The regulations contained in the USRP and the ERP are available for public viewing through the WCIRB's website. (2) POLICYHOLDER INFORMATION. Pursuant to California Insurance Code (CIC) Section 11752.6, upon written request, you are entitled to information relating to loss experience, claims, classification assignments, and policy contracts as well as rating plans, rating systems, manual rules, or other information impacting your premium that is maintained in the records of the WCIRB. Complaints and Requests for Action requesting policyholder information should be forwarded to: WCIRB, 525 Market Street, Suite 800, San Francisco, California 94105-2767, Attention: Custodian of Records. The Custodian of Records can be reached by telephone at 415-777-0777 and by fax at 415- 778-7272. II. DISPUTE PROCESS You may dispute our actions or the actions of the WCIRB pursuant to CIC Sections 11737 and 11753.1. A. Our Dispute Resolution Process. If you are aggrieved by our decision adopting a change in a classification assignment that results in increased premium, or by the application of our rating system to your workers' compensation insurance, you may dispute these matters with us. If you are dissatisfied with the outcome of the initial dispute with us, you may send us a written Complaint and Request for Action as outlined below. You may send us a written Complaint and Request for Action requesting that we reconsider a change in a classification assignment that results in an increased premium and/or requesting that we review the manner in which our rating system has been applied in connection with the insurance afforded or offered you. Written Complaints and Requests for Action should be forwarded to: Preferred Employers Insurance Company, P.O. Box 85478 San Diego, CA 92186-5478 or telephone 888-472-9224 or fax 888-472-9490. After you send your Complaint and Request for Action, we have 30 days to send you a written notice indicating whether or not your written request will be reviewed. If we agree to review your request, we must conduct the review and issue a decision granting or rejecting your request within 60 days after sending you the written notice granting review. If we decline to review your request, if you are dissatisfied with the decision upon review, or if we fail to grant or reject your 1 of 2 PN 04 99 01 C (Ed. 04-04) request or issue a decision upon review, you may appeal to the insurance commissioner as described in paragraph II.C., below. B. Disputing the Actions of the WCIRB. If you have been aggrieved by any decision, action, or omission to act of the WCIRB, you may request, in writing, that the WCIRB reconsider its decision, action, or omission to act. You may also request, in writing, that the WCIRB review the manner in which its rating system has been applied in connection with the insurance afforded or offered you. For requests related to classification disputes, the reporting of experience, or coverage issues, your initial request for review must be received by the WCIRB within 12 months after the expiration date of the policy to which the request for review pertains, except if the request involves the application of the Revision of Losses rule. For requests related to your experience modification, your initial request for review must be received by the WCIRB within 6 months after the issuance, or 12 months after the expiration date, of the experience modification to which the request for review pertains, whichever is later, except if the request for review involves the application of the Revision of Losses rule. If the request involves the Revision of Losses rule, the time to state your appeal may be longer. (See Section VI, Rule 14 of the ERP). You may commence the review process by sending the WCIRB a written Inquiry. Written Inquiries should be sent to: WCIRB, 525 Market Street, Suite 800, San Francisco, California 94105-2767, Attention: Customer Service. Customer Service can be reached by telephone at 1-888-229-2472, and by fax at 415-778-7272. If you are dissatisfied with the WCIRB's decision upon an Inquiry, or if the WCIRB fails to respond within 90 days after receipt of the Inquiry, you may pursue the subject of the Inquiry by sending the WCIRB a written Complaint and Request for Action. After you send your Complaint and Request for Action, the WCIRB has 30 days to send you written notice indicating whether or not your written request will be reviewed. If the WCIRB agrees to review your request, it must conduct the review and issue a decision granting or rejecting your request within 60 days after sending you the written notice granting review. If the WCIRB declines to review your request, if you are dissatisfied with the decision upon review, or if the WCIRB fails to grant or reject your request or issue a decision upon review, you may appeal to the insurance commissioner as described in paragraph II.C., below. Written Complaints and Requests for Action should be forwarded to: WCIRB, 525 Market Street, Suite 800, San Francisco, California 94105-2767, Attention: Complaints and Reconsiderations. The WCIRB's telephone number is 1-888-229-2472, and the fax number is 415-371-5204. C. California Department of Insurance — Appeals to the Insurance Commissioner. If, after you follow the Appropriate dispute resolution process described above, we or the WCIRB decline to review your request, if you are dissatisfied with the decision upon review, or if we or the WCIRB fail to grant or reject your request or issue a decision upon review, you may appeal to the insurance commissioner pursuant to CIC Sections 11737, 11752.6, 11753.1 and Title 10, California Code of Regulations, Section 2509.40 et seq. You must file your appeal within 30 days after we or the WCIRB send you the notice rejecting review of your Complaint and Request for Action or the decision upon your Complaint and Request for Action. If no written decision regarding your Complaint and Request for Action is sent, your appeal must be filed within 120 days after you sent your Complaint and Request for Action to us or to the WCIRB. The filing address for all appeals to the insurance commissioner is: Administrative Hearing Bureau California Department of Insurance 45 Fremont Street, 22nd Floor San Francisco, California 94105 You have the right to a hearing before the insurance commissioner, and our action, or the action of the WCIRB, may be affirmed. modified. or reversed III. RESOURCES AVAILABLE TO YOU IN OBTAINING INFORMATION AND PURSUING DISPUTES A. Policyholder Ombudsman. Pursuant to California Insurance Code Section 11752.6, a policyholder ombudsman is available at the WCIRB to assist you in obtaining and evaluating the rating, policy, and claims information referenced in I.A. and I.B., above. The ombudsman may advise you on any dispute with us, the WCIRB, or on an appeal to the insurance commissioner pursuant to Section 11737 of the Insurance Code. The address of the policyholder ombudsman is WCIRB, 525 Market Street, Suite 800, San Francisco, California 94105-2767, Attention: Policyholder Ombudsman. The policyholder ombudsman can be reached by telephone at 415-777-0777 and by fax at 415-778-7007. B. California Department of Insurance — Information and Assistance. Information and assistance on policy questions can be obtained from the Department of Insurance Consumer HOTLINE, 1 -800 -927 - HELP (4357) or http://www.insurance.ca.gov. For questions and correspondence regarding appeals to the Administrative Hearing Bureau, see the contact information in paragraph II.C. This notice does not change the policy to which it is attached. 2OF2 PN 04 99 02 B (Ed. 5-02) POLICYHOLDER NOTICE CALIFORNIA WORKERS' COMPENSATION INSURANCE RATING LAWS Pursuant to Section 11752.8 of the California Insurance Code, we are providing you with an explanation of the California workers' compensation rating laws. 1. We establish our own rates for workers' compensation. Our rates, rating plans, and related information are filed with the insurance commissioner and are open for public inspection. 2. The insurance commissioner can disapprove our rates, rating plans, or classifications only if he or she has determined after public hearing that our rates might jeopardize our ability to pay claims or might create a monopoly in the market. A monopoly Is defined by law as a market where one insurer writes 20% or more of that part of the California workers' compensation insurance that is not written by the State Compensation Insurance Fund. If the insurance commissioner disapproves our rates, rating plans, or classifications, he or she may order an increase in the rates applicable to outstanding policies. 3. Rating organizations may develop pure premium rates that are subject to the insurance commissioner's approval. A pure premium rate reflects the anticipated cost and expenses of claims per $100 of payroll for a given classification. Pure premium rates are advisory only, as we are not required to use the pure premium rates developed by any rating organization in establishing our own rates. 4. We must adhere to a single, uniform experience rating plan. If you are eligible for experience rating under the plan, we will be required to adjust your premium to reflect your claim history. A better claim history generally results in a lower experience rating modification; more claims, or more expensive claims, generally result in a higher experience rating modification. The uniform experience rating plan, which is developed by the insurance rating organization designated by the insurance commissioner, is subject to approval by the insurance commissioner. 5. A standard classification system, developed by the insurance rating organization designated by the insurance commissioner, is subject to approval by the insurance commissioner. The standard classification system is a method of recognizing and separating policyholders into industry or occupational groups according to their similarities and/or differences. We can adopt and apply the standard classification system or develop and apply our own classification system, provided we can report the payroll, expenses, and other costs of claims in a way that is consistent with the uniform statistical plan or the standard classification system. 6. Our rates and classifications may not violate the Unruh Civil Rights Act or be unfairly discriminatory. 7. We will provide an appeal process for you to appeal the way we rate your insurance policy. The process requires us to respond to your written appeal within 30 days. If you are not satisfied with the result of your appeal, you may appeal our decision to the insurance commissioner.. California Workers' Compensation Insurance Notice of Nonrenewal Section 11664 of the California Insurance Code requires us, in most instances, to provide you with a notice of nonrenewal. Except as specified in paragraphs 1 through 6 below, if we elect to nonrenew your policy, we are required to deliver or mail to you a written notice stating the reason or reasons for the nonrenewal of the policy. The notice is required to be sent to you no earlier than 120 days before the end of the policy period and no later than 30 days before the end of the policy period. If we fail to provide you the required notice, we are required to continue the coverage under the policy with no change in the premium rate until 60 days after we provide you with the required notice. 1 of 2 PN 04 99 02 B (Ed. 5-02) We are not required to provide you with a notice of nonrenewal in any of the following situations: 1. Your policy was transferred or renewed without a change in its terms or conditions or the rate on which the premium is based to another insurer or other insurers who are members of the same insurance group as us. 2. The policy was extended for 90 days or less and the required notice was given prior to the extension. 3. You obtained replacement coverage or agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage. 4. The policy is for a period of no more than 60 days and you were notified at the time of issuance that it may not be renewed. 5. You requested a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period. 6. We made a written offer to you to renew the policy at a premium rate increase of less than 25 percent. (A) If the premium rate in your governing classification is to be increased 25 percent or greater and we intend to renew the policy, we shall provide a written notice of a renewal offer not less than 30 days prior to the policy renewal date. The governing classification shall be determined by the rules and regulations established in accordance with California Insurance Code Section 11750.3(c). (B) For purposes of this Notice, "premium rate" means the cost of insurance per unit of exposure prior to the application of Individual risk variations based on loss or expense considerations such as scheduled rating and experience rating. This notice does not change the policy to which it is attached. 2OF2 Workers Compensation and Employers Liability Preferred Employers Insurance Policy INS U R A N C E C O M P A N Y Policy Number: WKN 155697-3 Workers Compensation and Employers Liability Insurance Policy California Policy Amendatory Endorsement Endorsement Agreement Limiting and Restricting This Insurance The insurance under this policy is limited as follows It is agreed that anything in the policy to the contrary notwithstanding, such as insurance as is afforded by this policy by reason of the designation of California in Item 3 of the Information Page is subject to the following provisions: 1. Minors Illegally Employed — Not Insured. This policy does not cover liability for additional compensation imposed on you under Section 4557, Division IV, Labor Code of the State of California, by reason of injury to an employee under sixteen years of age and illegally employed at time of injury. 2. Punitive or Exemplary Damages — Uninsurable. This policy does not cover punitive or exemplary damages where insurance of liability therefore is prohibited by law or contrary to public policy. 3. Increase in Indemnity Payment — Reimbursement. You are obligated to reimburse us for the amount of increase in indemnity payments made pursuant to Subdivision (d) of Section 4650 of the California Labor Code, if the late indemnity payment which gives rise to the increase in the amount of payment is due less than seven (7) days after we receive the completed claim form from you. You are obligated to reimburse us for any increase in indemnity payments not covered under this policy and will reimburse us for any increase in indemnity payment not covered under the policy when the aggregate total amount of the reimbursement payments paid in a policy year exceeds one hundred dollars ($100). If we notify you in writing, within 30 days of the payment, that you are obligated to reimburse us, we will bill you for the amount of increase in indemnity payment and collect it no later than the final audit. You will have 60 days, following notice of the obligation to reimburse, to appeal the decision of the insurer to the Department of Insurance. 4. Application of Policy. Part One , Workers Compensation Insurance", A, "How This Insurance Applies", is amended to read as follows: This workers compensation insurance applies to bodily injury by accident or disease, including death resulting therefrom. Bodily injury by accident must occur during the policy period. Bodily injury by disease must be caused or aggravated by the conditions of your employment. Your employee's exposure to those conditions causing or aggravating such bodily injury by disease must occur during the policy period. 5. Rate Changes. The premium and rates with respect to the insurance provided by this policy by reason of the designation of California in Item 3 of the Information Page are subject to change if ordered by the Insurance Commission of the State of California pursuant to Section 11737 of the California Insurance Code. 6. Long Term Policy. If this policy is written for a period longer than one year, all provisions of this policy shall apply separately to each consecutive twelve month period or, if the first or last consecutive period is less than twelve months, to such period of less than twelve months, in the same manner as if a separate policy had been written for each consecutive period. 7. Statutory Period. Your employee has a first lien upon any amount, which becomes owing to you by us on account of this policy, and in the case of your legal incapacity or inability to receive the money and pay it to the claimant, we will pay it directly to the claimant. Endorsement No.: 7 Producer Number: 55110 PE1127A Agency Name: VANTREO INSURANCE 01/01/12 BROKERAGE Pagel of 4 Policy Number: WKN 155697-3 8. Part Five, "Premium", E "Final Premium", is amended to read as follows: The premium shown on the Information Page, schedules, and endorsements is an estimate. The final premium will be determined after this policy ends by using the actual, not the estimated, premium basis and the proper classifications and rates that lawfully apply to the business and work covered by this policy. If the final premium is more than the premium you paid to us, you must pay us the balance. If it is less, we will refund the balance to you. The final premium will not be less than the highest minimum premium for the classifications covered by the policy. If this policy is cancelled, final premium will be determinated in the following way unless our manuals provide otherwise: a. If we cancel, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium. b. If you cancel, final premium may be more than pro rata; it will be based on the time this policy was in force, and may be increased by our short -rate cancellation table and procedure. Final premium will not be less than pro rata share of the minimum premium. 9. Relatives Not Insured. If the employer named in Item 1 of the information Page is a sole proprietor, a husband and wife, or partnership in which the general partners are husband and wife, this policy does not extend to or cover bodily injury sustained by any of the following relatives of the employer and spouse or of either if at the time of injury such relative: a) Resides in the household of the employer and spouse, or of either, or b) Is a child under the age of twelve years Unless such relative is specifically covered by name in Item 4 of the Information Page or an endorsement attached to this policy. Relatives Not Insured — Spouse, child by birth or adoption, stepchild, grandchild, son-in-law, daughter-in-law, parent, step- parent, parent -in-law, grandparent, brother, sister, stepbrother, stepsister, half-brother, half-sister, brother-in-law, sister-in-law, uncle, aunt, nephew, niece. 10. Private Residence Employees Not Insured. It is further agreed that this policy does not extend to or cover bodily injury sustained by any employee who is covered for workers compensation benefits of a policy also affording comprehensive personal liability insurance which has been issued to this insured. 11. Excluded Employments. This policy shall not operate as an election by the insured to insure under Part One employees who are excluded by the Workers Compensation Law of the State of California unless such employees are engaged in operations specifically described on the Information Page. It is further agreed that remuneration when used as a premium basis for such insurance as is afforded by the policy by reason of the designation of California in Item 3 of the Information Page shall not include the remuneration of any person excluded from coverage in accordance with the foregoing. Failure to secure the payment of full compensation benefits for all employees as required by Labor Code Section 3700 is a violation of law and may subject the employer to the imposition of a work stop order, large fines and other substantial penalties. (Labor Code Section 3710. 1, et seq.) Endorsement No.: 7 Producer Number: 58110 PE1127A Agency Name: VANTREO INSURANCE 01/01/12 BROKERAGE Page 2 of 4 Policy Number: WKN 155697-3 California - Employers Liability Coverage 1. Employers Liability Insurance. Part Two "Employers Liability Insurance", A. "How This Insurance Applies", is replaced by the following: A. How This Insurance Applies This employers liability insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes death resulting therefrom. Bodily injury does not included mental or emotional distress unless it results in a physical injury such as would be compensable under Part One of this insurance, or is caused by a physical injury or disease. 1. The bodily injury must arise out of and in the course of the injured employee's employment by you. 2. The employment must be necessary or incidental to your work in California. 3. Bodily injury by accident must occur during the policy period. 4. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. 5. If you are sued, the original suit and any related legal actions for damages for bodily injury by accident or by disease must be brought in the United States of America, its territories or possessions or Canada. 2. Employers Liability Exclusions. Part Two "Employer Liability Insurance", C. Exclusions is replaced by the following: C. Exclusions This insurance does not cover: 1. liability assumed under contract,- 2. ontract;2. bodily injury to an employee while employed in violation of law with your actual knowledge or the actual knowledge of any of your executive officers; 3. any obligation imposed by a workers compensation, occupational disease, unemployment compensation or disability benefits law or any similar law; 4. bodily injury intentionally caused or aggravated by you; 5. bodily injury occurring outside the United States of America, its territories or possessions and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries; 6. liability imposed under Section 3602(b)(2), of the California Labor Code or any amendment thereto; 7. bodily injury to any employee employed in domestic employment not described in the declaration unless the policy applies under Part One with respect to such employee; 8. punitive or exemplary damages; 9. damages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personal practices, policies, acts or omissions; 10. bodily injury to any person in work subject to the Longshore and Harbor Workers Compensation Act (33 USC Sections 901-950), the Nonappropriated Fund Instrumentalities Act (5 USC Sections 8171-8173) the Outer Continental Shelf Lands Act (43 USC Sections 1331-1356), the Defense Base Act (42 USC Section 1651-1654), the Federal Coal Mine Health And Safety Act of 1969 (30 USC Sections 901-942), any other federal workers for workers compensation law or other federal occupational disease law or any amendments to these laws; 11. bodily injury to any person in work subject to the Federal Employers Liability Act (45 USC Sections 51-60 any other federal laws obligating an employer to pay damages to an employee due to bodily injury arising out of or in the course of employment, or any amendments to those laws; Endorsement No.: 7 Producer Number: 58110 PE1127A Agency Name: VANTREO INSURANCE 01/01/12 BROKERAGE Page 3 of 4 Policy Number: WKN 155697-3 12. bodily injury to a master or member of the crew of any vessel; 13. fines or penalties; 14. damages payable under the Migrant and Seasonal Agricultural Worker Protection Act (29 USC Sections 1801-1872) and under any other federal law awarding damages for violation of those laws or regulations issued thereunder, and any amendments to those laws. 3. Employers Liability Coverage Limits Application of Limits of Liability With respect to such insurance as is afforded by the policy under Part Two by reason of the designation of California in Item 3 of the Information Page, it is agreed that with respect to any injury which is subject to the California Workers Compensation Law; 1. the limit of liability applicable to bodily injury by accident is amended to read $1,000,000 each accident; 2. the limit of liability applicable to bodily injury by disease is amended to read $1,000,000 each employee; 3. the policy limit of liability applicable to bodily injury by disease is amended to read $1,000,000; 4. an aggregate policy limit of $1,000,000 is applicable to any single policy year. Such limits of liability are in lieu of, and shall not cumulate with, any other limit of liability stated in the policy. Rate Change Provision The premium and rates with respect to the insurance provided by this policy by reason of the designation of California in Item 3 of the Information Page are subject to change if ordered by the Insurance Commissioner of the State of California pursuant to Section 11737 of the California Insurance Code. California Participating Provision Under California law it is unlawful for an insurer to promise the future payment of dividends under an unexpired Workers Compensation policy or to misrepresent the conditions for dividend payment. Dividends are payable cnly pursuant to conditions determined by the Board of Directors or other governing Board of the company following policy expiration. Contract of Insurance It is further agreed that this policy, including all endorsements forming a part thereof, constitutes the entire contract of insurance. No condition, provision, agreement or understanding not set forth in this policy or such endorsements shall affect such contract or any rights, duties or privileges arising therefrom. Endorsement No.: 7 Producer Number: 58110 PE1127A Agency Name: VANTREO INSURANCE 01/01/12 BROKERAGE Page 4 of 4 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 00 04 22 B (Ed 1-15) TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT DISCLOSURE ENDORSEMENT This endorsement addresses the requirements of the Terrorism Risk Insurance Act of 2002 as amended and extended by the Terrorism Risk Insurance Program Reauthorization Act of 2015. It serves to notify you of certain limitations under the Act and that your insurance carrier is charging premium for losses that may occur in the event of an act of terrorism. Your policy provides coverage for workers compensation losses caused by Acts of Terrorism, including workers compensation benefit obligations dictated by state law. Coverage for such losses is still subject to all terms, definitions, exclusions, and conditions in your policy, and any applicable federal and/or state laws, rules, or regulations. Definitions The definitions provided in this endorsement are based on and have the same meaning as the definitions in the Act. If words or phrases not defined in this endorsement are defined in the Act, the definitions in the Act will apply. "Act" means the Terrorism Risk Insurance Act of 2002, which took effect on November 26, 2002, and any amendments thereto resulting from the Terrorism Risk Insurance Program Reauthorization Act of 2015. "Act of Terrorism" means any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of Homland Security, and the Attorney General of the United States as meeting all of the following requirements: a. The act is an act of terrorism b. The act is violent or dangerous to human life, property or infrastructure. c. The act resulted in damage within the United States, or outside of the United States in the case of the premises of United States missions or certain air carriers or vessels. d. The act has been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion . "Insured Loss" means any loss resulting from an act of terrorism (and, except for Pennsylvania, including an act of war, in the case of workers compensation) that is covered by primary or excess property and casualty insurance issued by an insurer if the loss occurs in the United States or at the premises of United States missions or to certain air carriers or vessels . "Insurer Deductible" means, for the period beginning on January 1, 2015, and ending on December 31, 2020, an amount equal to 20% of our direct earned premiums, over the calendar year immediately preceding the applicable Program Year. Limitation of Liability The Act limits our liability to you under this policy. If aggregate Insured Losses exceed $100,000,000,000 in a calendar year and if we have met our Insurer Deductible, we are not liable for the payment of any portion of the amount of Insured Losses that exceeds $100,000,000,000; and for aggregate Insured Losses up to $100,000,000,000, we will pay only a pro rata share of such Insured Losses as determined by the Secretary of the Treasury. © 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. WC 00 04 22 B WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY (Ed 1-15) Policyholder Disclosure Notice Insured Losses would be partially reimbursed by the United States Government. If the aggregate industry Insured Losses exceed: a. $100,000,000, with respect to such Insured Losses occurring in calendar year 2015, the United States Government would pay 85% of our Insured Losses that exceed our Insurer Deductible. b. $120,000,000 with respect to such Insured Losses occurring in calendar year 2016, the United States Government would pay 84% of our Insured Losses that exceed our Insurer Deductible. c. $140,000,000 with respect to such Insured Losses occurring in calendar year 2017, the United States Government would pay 83% of our Insured Losses that exceed our Insurer Deductible. d. $160,000,000 with respect to such Insured Losses occurring in calendar year 2018, the United States Government would pay 82% of our Insured Losses that exceed our Insurer Deductible. e. $180,000,000 with respect to such Insured Losses occurring in calendar year 2019, the United States Government would pay 81 % of our Insured Losses that exceed our Insurer Deductible. f. $200,000,000 with respect to such Insured Losses occurring in calendar year 2020, the United States Government would pay 80% of our Insured Losses that exceed our Insurer Deductible. 2. Notwithstanding item 1 above, the United States Government will not make any payment under the Act for any portion of Insured Losses that exceed $100,000,000,000. 3. The premium charge for the coverage your policy provides for Insured Losses is included in the amount shown in Item 4 of the Information Page or in the Schedule below. Schedule State Rate Premium CA 0.04 439.00 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 10/01/16 Policy. No. WKN155697-3 Insured ROBERTSON & ASSOCIATES, C. P. A.'S, INC. Insurance Company PREFERRED EMPLOYERS INSURANCE COMPANY WC 00 04 22 B Countersigned By (Ed 1-15) Endorsement No. Premium $. 0 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. POLICYHOLDER DISCLOSURES NOTICE OF CANCELLATION FEES If you cancel this policy, final premium will be based on the time the policy was in force, and increased up to 11 % of full policy premium by our short -rate cancellation table and procedure. Final premium will not be less than minimum premium. NOTICE OF TERRORISM INSURANCE COVERAGE Coverage for acts of terrorism, as defined in the Terrorism Risk Insurance Act, as amended, (the "Act"), is included in your policy. As defined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by the Secretary of the Treasury -in consultation with the Secretary of Homeland Security, and the Attorney General of the United States - to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of certain air carriers or vessels or the premises of a United States mission; and to have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Under your coverage, any losses resulting from certified acts of terrorism may be partially reimbursed by the United States Government under a formula established by the Act. However, your policy may contain other exclusions which might affect your coverage, such as an exclusion for nuclear events. Under the formula, the United States Government generally reimburses 85% through 2015; 84% beginning January 1, 2016; 83% beginning on January 1, 2017; 82% beginning on January 1, 2018; 81% beginning on January 1, 2019 and 80% beginning on January 1, 2020 of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. The Act contains a $100 billion cap that limits U.S. Government reimbursement as well as insurers' liability for losses resulting from certified acts of terrorism when the amount of such losses exceeds $100 billion in any one calendar year. If the aggregate insured losses for all insurers exceed $100 billion, your coverage may be reduced. The portion of your annual premium that is attributable to coverage for acts of terrorism as defined in the Act, is $ 439.00, and does not include any charges for the portion of losses covered. by the United States government under the Act. Name of Insurer: ROBERTSON & ASSOCIATES, C. P. A.'S, INC. Policy Number: WKN155697-3 KI 2015 National Association of insurance Commissioners PN049907 WKNI55697-3 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 04 04 22 (Ed. 01-12) CALIFORNIA SHORT -RATE CANCELATION ENDORSEMENT It is agreeded that, anything in the policy to the contrary notwithstanding, such insurance as is afforded by this policy by reason of the designation of California in Ite 2 of the Information Page is subject to the following provisions: If you cancel the policy and a disclosure was provided in accordance with Section 481(c) of the California Insurance Code, final premium will be based on the time this policy was in force and increased by the short -rate cancellation table attached: Short Rate Cancelation Table Percent Extended of Number Full Policy of Days Premium Percent Extended of Number Full Policy of Days Premium Percent Extended of Number Full Policy of Days Premium 1 ...... 5.0% 95-98 ...... 37.0% 219-223 ...... 69.0% 2 ...... 6.0% 99-102 ...... 38.0% 224-228 ...... 70.0% 3-4 ...... 7.0% 103-105 ...... 39.0% 229-232 ...... 71.0% 5-6 ...... 8.0% 106- 109 ...... 40.0% 233-237 ...... 72.0% 7-8 ...... 9.0% 110-113 ...... 41.0% 238-241 ...... 73.0% 9- 10 ...... 10.0% 114-116 ...... 42.0% 242-246 (8 mos.) 74.0% 1 1 -12 ...... 11.0% 117-120 ...... 43.0% 247-250 ...... 75.0% 13- 14 ...... 12.0% 121 - 124 (4 mos.) 44.0% 251 -255 ...... 76.0% 15-16 ...... 13.0% 125-125 ...... 45.0% 256-260 ...... 77.0% 17- 18 ...... 14.0% 126- 131 ...... 46.0% 261-264 ...... 78.0% 19-20 ...... 15.0% 132-135 ...... 47.0% 265-269 ...... 79.0% 21-22 ...... 16.0% 136-138 ...... 48.0% 270-273 (9 mos.) 80.0% 23-25 ...... 17.0% 139-142 ...... 49.0% 274-278 ...... 81.0% 26-29 ...... 18.0% 143-146 ...... 50.0% 279-282 ...... 82.0% 30-32 (1 mo.) 19.0% 147- 149 ...... 51.0% 283-287 ...... 83.0% 33-36 ...... 20.0% 150- 153 (5 mos.) 52.0% 288-291 ...... 84.0% 37-40 ...... 21.0% 154- 156 ...... 53.0% 292-296 ...... 85.0% 41-43 ...... 22.0% 157-160 ...... 54.0% 297-301 ...... 86.0% 44-47 ...... 23.0% 161-164 ...... 55.0% 302-305 (10 mos.) 87.0% 48-51 ...... 24.0% 165-167 ...... 56.0% 306-310 ...... 88.0% 52-54 ...... 25.0% 168- 171 ...... 57.0% 311 -314 ...... 89.0% 55-58 ...... 26.0% 172-175 ...... 58.0% 315-319 ...... 90.0% 59-62 (2 mos.) 27.0% 176-178 ...... 59.0% 320-323 ...... 91.0% 63-65 ...... 28.0% 179-182 (6 mos.) 60.0% 324-328 ...... 92.0% 66-69 ...... 29.0% 183- 187 ...... 61.0% 329-332 ...... 93.0% 70-73 ...... 30.0% 188-191 ...... 62.0% 333-337 (11 mos.) 94.0% 74-76 ...... 31.0% 192-196 ...... 63.0% 338-342 ...... 95.0% 77-80 ...... 32.0% 197-200 ...... 64.0% 343-346 ...... 96.0% 81- 83 ...... 33.0% 201-205 ...... 65.0% 347-351 ...... 97.0% 84-87 ...... 34.0% 206-209 ...... 66.0% 352-355 ...... 98.0% 88-91 (3 mos.) 35.0% 210-214 (7 mos.) 67.0% 356-360 ...... 99.0% 92-94 ...... 36.0% 215-218 ...... 68.0% 361 -365 (12 mos.) 100.0% This endorsement changes the policy to which itis attached 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 10/1/2016 Policy No. WKN155697-3 Endorsement No. 10 Insured ROBERTSON & ASSOCIATES, C. P. A.'S, INC. Premium $. Insurance Company PREFERRED EMPLOYERS INSURANCE COMPANY WC 04 04 22 (Ed.01-12) Countersigned By WKN155697-3 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY In return for the payment of the premium and subject to all terms of this policy, we agree with you as follows: GENERAL SECTION A. The Policy This policy includes at its effective date the Infor- mation Page and all endorsements and schedules listed there. It is a contract of insurance between you (the employer named in Item 1 of the Infor- mation Page) and us (the insurer named on the Information Page). The only agreements relating to this insurance are stated in this policy. The terms of this policy may not be changed or waived except by endorsement issued by us to be part of this policy. B. Who is Insured You are insured if you are an employer named in Item 1 of the Information Page. If that employer is a partnership, and if you are one of its partners, you are insured, but only in your capacity as an em- ployer of the partnership's employees. C. Workers Compensation Law Workers Compensation Law means the workers or workmen's compensation law and occupational disease law of each state or territory named in Item 3.A. of the Information Page. It includes any amendments to that law which are in effect during the policy period. It does not include any federal workers or workmen's compensation law, any fed- eral occupational disease law or the provisions of any law that provide nonoccupational disability benefits. D. State State means any state of the United States of America, and the District of Columbia. E. Locations This policy covers all of your workplaces listed in Items 1 or 4 of the Information Page; and it covers all other workplaces in Item 3.A. states unless you have other insurance or are self-insured for such workplaces. 1 of 6 0 Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. WC000000C (Ed 1-15) PART ONE WORKERS COMPENSATION INSURANCE A. How This Insurance Applies This workers compensation insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death. 1. Bodily injury by accident must occur during the policy period. 2. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. B. We Will Pay We will pay promptly when due the benefits required of you by the workers compensation law. C. We Will Defend We have the right and duty to defend at our expense any claim, proceeding or suit against you for benefits payable by this insurance. We have the right to investigate and settle these claims, proceedings or suits. We have no duty to defend a claim, proceeding or suit that is not covered by this insurance. D. We Will Also Pay We will also pay these costs, in addition to other amounts payable under this insurance, as part of any claim, proceeding or suit we defend: 1. reasonable expenses incurred at our request, but not loss of earnings; 2. premiums for bonds to release attachments and for appeal bonds in bond amounts up to the amount payable under this insurance; 3. litigation costs taxed against you; 4. interest on a judgment as required by law until we offer the amount due under this insurance; and 5. expenses we incur. E. Other Insurance We will not pay more than our share of benefits and costs covered by this insurance and other WKN155697-3 WC000000C (Ed 1-15) WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY insurance or self-insurance. Subject to any limits of liability that may apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is exhausted, the shares of all remaining insurance will be equal until the loss is paid. Payments You Must Make You are responsible for any payments in excess of the benefits regularly provided by the workers compensation law including those required because: 1. of your serious and willful misconduct; 2. you knowingly employ an employee in violation of law; 3. you fail to comply with a health or safety law or regulation; or 4. you discharge, coerce or otherwise discriminate against any employee in violation of the workers compensation law. If we make any payments in excess of the benefits regularly provided by the workers compensation law on your behalf, you will reimburse us promptly. G. Recovery From Others We have your rights, and the rights of persons entitled to the benefits of this insurance, to recover our payments from anyone liable for the injury. You will do everything necessary to protect those rights for us and to help us enforce them. H. Statutory Provisions These statements apply where they are required by law. 1. As between an injured worker and us, we have notice of the injury when you have notice. 2. Your default or the bankruptcy or insolvency of you or your estate will not relieve us of our du- ties under this insurance after an injury occurs. 3. We are directly and primarily liable to any per- son entitled to the benefits payable by this in- surance. Those persons may enforce our duties; so may an agency authorized by law. Enforce- ment may be against us or against you and us. 4. Jurisdiction over you is jurisdiction over us for purposes of the workers compensation law. We are bound by decisions against you under that law, subject to the provisions of this policy that are not in conflict with that law. 5. This insurance conforms to the parts of the 2of6 ©Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. workers compensation law that apply to: a. benefits payable by this insurance; b. special taxes, payments into security or other special funds, and assessments payable by us under that law. 6. Terms of this insurance that conflict with the workers compensation law are changed by this statement to conform to that law. Nothing in these paragraphs relieves you of your duties under this policy. PART TWO EMPLOYERS LIABILITY INSURANCE A. How This Insurance Applies This employers liability insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death. 1. The bodily injury must arise out of and in the course of the injured employee's employment by you. 2. The employment must be necessary or incidental to your work in a state or territory listed in Item 3.A. of the Information Page. 3. Bodily injury by accident must occur during the policy period. 4. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. 5. If you are sued, the original suit and any related legal actions for damages for bodily injury by accident or by disease must be brought in the United States of America, its territories or possessions, or Canada. We Will Pay We will pay all sums that you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers Liability Insurance. The damages we will pay, where recovery is permitted by law, include damages: For which you are liable to a third party by rea- son of a claim or suit against you by that third party to recover the damages claimed against WKN155697-3 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY such third party as a result of injury to your employee; 2. For care and loss of services; and 3. For consequential bodily injury to a spouse, child, parent, brother or sister of the injured em- ployee; provided that these damages are the di- rect consequence of bodily injury that arises out of and in the course of the injured employee's employment by you; and 4. Because of bodily injury to your employee that arises out of and in the course of employment, claimed against you in a capacity other than as employer. C. Exclusions This insurance does not cover: 1. Liability assumed under a contract. This exclu- sion does not apply to a warranty that your work will be done in a workmanlike manner; 2. Punitive or exemplary damages because of bodi- ly injury to an employee employed in violation of law; 3. Bodily injury to an employee while employed in violation of law with your actual knowledge or the actual knowledge of any of your executive officers; 4. Any obligation imposed by a workers compensa- tion, occupational disease, unemployment com- pensation, or disability benefits law, or any simi- lar law; 5. Bodily injury intentionally caused or aggravated by you; 6. Bodily injury occurring outside the United States of America, its territories or possessions, and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries; 7. Damages arising out of coercion, criticism, de- motion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimina- tion against or termination of any employee, or any personnel practices, policies, acts or omissions; 8 Bodily injury to any person in work subject to the Longshore and Harbor Workers' Compensation Act (33 U.S.C. Sections 901 et seq.), the Nonap- propriated Fund Instrumentalities Act (5 U.S.C. Sections 8171 et seq.), the Outer Continental Shelf Lands Act (43 U.S.C. Sections 1331 et seq.), the Defense Base Act (42 U.S.C. Sections 1651-1654), the Federal Mine Safety and Health Act (30 U.S.C. Sections 801 et seq. and 901- 944 ), any other federal workers or workmen's compensation law or other federal occupational disease law, or any amendments to these laws; 3of6 © Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. WC 00 00 00 C (Ed 1-15) 9. Bodily injury to any person in work subject to the Federal Employers' Liability Act (45 U.S.C. Sec- tions 51 et seq.), any other federal laws obligat- ing an employer to pay damages to an employee due to bodily injury arising out of or in the course of employment, or any amendments to those laws; 10. Bodily injury to a master or member of the crew of any vessel, and does not cover punitive dam- ages related to your duty or obligation to provide transportation, wages, maintenance, and cure under any applicable maritime law; 11. Fines or penalties imposed for violation of federal or state law; and 12. Damages payable under the Migrant and Sea- sonal Agricultural Worker Protection Act (29 U.S.C.Sections 1801 et seq.) and under any other federal law awarding damages for violation of those laws or regulations issued thereunder, and any amendments to those laws. D. We Will Defend We have the right and duty to defend, at our ex- pense, any claim, proceeding or suit against you for damages payable by this insurance. We have the right to investigate and settle these claims, proceed- ings and suits We have no duty to defend a claim, proceeding or suit that is not covered by this insurance. We have no duty to defend or continue defending after we have paid our applicable limit of liability under this insurance. E. We Will Also Pay We will also pay these costs, in addition to other amounts payable under this insurance, as part of any claim, proceeding, or suit we defend: 1. Reasonable expenses incurred at our request, but not loss of earnings; 2. Premiums for bonds to release attachments and for appeal bonds in bond amounts up to the limit of our liability under this insurance; 3. Litigation costs taxed against you; 4. Interest on a judgment as required by law until we offer the amount due under thjs insurance; and 5. Expenses we incur. WKN155697-3 WC 00 00 00 C WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY (Ed 1-15) Other Insurance We will not pay more than our share of damages and costs covered by this insurance and other in- surance or self-insurance. Subject to any limits of li- ability that apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is ex- hausted, the shares of all remaining insurance and self-insurance will be equal until the loss is paid. G. Limits of Liability Our liability to pay for damages is limited. Our limits of liability are shown in Item 3.13. of the Information Page. They apply as explained below. 1. Bodily Injury by Accident. The limit shown for "bodily injury by accident -each accident" is the most we will pay for all damages covered by this insurance because of bodily injury to one or more employees in any one accident. A disease is not bodily injury by accident unless it results directly from bodily injury by accident. 2. Bodily Injury by Disease. The limit shown for "bodily injury by disease -policy limit" is the most we will pay for all damages covered by this insurance and arising out of bodily injury by dis- ease, regardless of the number of employees who sustain bodily injury by disease. The limit shown for "bodily injury bydisease-each em- ployee" is the most we will pay for all damages because of bodily injury by disease to any one employee. Bodily injury by disease does not include dis- ease that results directly from a bodily injury by accident. 3. We will not pay any claims for damages after we have paid the applicable limit of our liability un- der this insurance. H. Recovery From Others We have your rights to recover our payment from anyone liable for an injury covered by this insurance. You will do everything necessary to protect those rights for us and to help us enforce them. I. Actions Against Us There will be no right of action against us under this insurance unless: 1. You have complied with all the terms of this poli- cy; and 4of6 © Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. 2. The amount you owe has been determined with our consent or by actual trial and final judgment. This insurance does not give anyone the right to add us as a defendant in an action against you to deter- mine your liability. The bankruptcy or insolvency of you or your estate will not relieve us of our obliga- tions under this Part. PART THREE OTHER STATES INSURANCE A. How This Insurance Applies 1. This other states insurance applies only if one or more states are shown in Item 3.C. of the Infor- mation Page. 2. If you begin work in any one of those states after the effective date of this policy and are not in- sured or are not self-insured for such work, all provisions of the policy will apply as though that state were listed in Item 3.A. of the Information Page. 3. We will reimburse you for the benefits required by the workers compensation law of that state if we are not permitted to pay the benefits directly to persons entitled to them. 4. If you have work on the effective date of this pol- icy in any state not listed in Item 3.A. of the In- formation Page, coverage will not be afforded for that state unless we are notified within thirty days. B. Notice Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page. PART FOUR YOUR DUTIES IF INJURY OCCURS Tell us at once if injury occurs that may be covered by this policy. Your other duties are listed here. 1. Provide for immediate medical and other services required by the workers compensation law. 2. Give us or our agent the names and addresses of the injured persons and of witnesses, and other information we may need. 3. Promptly give us all notices, demands and legal WKN155697-3 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY papers related to the injury, claim, proceeding or suit. Cooperate with us and assist us, as we may re- quest, in the investigation, settlement or defense of any claim, proceeding or suit. Do nothing after an injury occurs that would in- terfere with our right to recover from others. Do not voluntarily make payments, assume obli- gations or incur expenses, except at your own cost. PART FIVE -PREMIUM A. Our Manuals All premium for this policy will be determined by our manuals of rules, rates, rating plans and classifica- tions. We may change our manuals and apply the changes to this policy if authorized by law or a gov ernmental agency regulating this insurance. Classifications Item 4 of the Information Page shows the rate and premium basis for certain business or work classifi- cations. These classifications were assigned based on an estimate of the exposures you would have during the policy period. If your actual exposures are not properly described by those classifications, we will assign proper classifications, rates and premium basis by endorsement to this policy. C. Remuneration Premium for each work classification is determined by multiplying a rate times a premium basis. Remu- neration is the most common premium basis. This premium basis includes payroll and all other remu- neration paid or payable during the policy period for the services of: 1. all your officers and employees engaged in work covered by this policy; and 2. all other persons engaged in work that could make us liable under Part One (Workers Com- pensation Insurance) of this policy. If you do not have payroll records for these persons, the con- tract price for their services and materials may be used as the premium basis. This paragraph 2 will not apply if you give us proof that the em- ployers of these persons lawfully secured their workers compensation obligations. 5 of 6 © Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. WC 00 00 00 C (Ed 1-15) D. Premium Payments You will pay all premium when due. You will pay the premium even if part or all of a workers compensa- tion law is not valid. E. Final Premium The premium shown on the Information Page, schedules, and endorsements is an estimate. The final premium will be determined after this policy ends by using the actual, not the estimated, premi- um basis and the proper classifications and rates that lawfully apply to the business and work covered by this policy. If the final premium is more than the premium you paid to us, you must pay us the bal- ance. If it is less, we will refund the balance to you. The final premium will not be less than the highest minimum premium for the classifications covered by this policy. If this policy is canceled, final premium will be de- termined in the following way unless our manuals provide otherwise: 1. If we cancel, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium. 2. If you cancel, final premium will be more than pro rata; it will be based on the time this policy was in force, and increased by our short -rate cancelation table and procedure. Final premium will not be less than the minimum premium. F. Records You will keep records of information needed to com- pute premium. You will provide us with copies of those records when we ask for them. G. Audit You will let us examine and audit all your records that relate to this policy. These records include ledg- ers, journals, registers, vouchers, contracts, tax re- ports, payroll and disbursement records, and pro- grams for storing and retrieving data. We may con- duct the audits during regular business hours during the policy period and within three years after the pol- icy period ends. Information developed by audit will be used to determine final premium. Insurance rate service organizations have the same rights we have under this provision. WKN155697-3 WC000000C (Ed 1-15) WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY PART SIX -CONDITIONS A. Inspection We have the right, but are not obliged to inspect your workplaces at any time. Our inspections are not safety inspections. They relate only to the insurabil- ity of the workplaces and the premiums to be charged. We may give you reports on the conditions we find. We may also recommend changes. While they may help reduce losses, we do not undertake to perform the duty of any person to provide for the health or safety of your employees or the public. We do not warrant that your workplaces are safe or healthful or that they comply with laws, regulations, codes or standards. Insurance rate service organiza- tions have the same rights we have under this provision. B. Long Term Policy If the policy period is longer than one year and six- teen days, all provisions of this policy will apply as though a new policy were issued on each annual anniversary that this policy is in force. C. Transfer of Your Rights and Duties Your rights or duties under this policy may not be transferred without our written consent. If you die and we receive notice within thirty days af- ter your death, we will cover your legal representa- tive as insured. D. Cancelation 1. You may cancel this policy. You must mail or de- liver advance written notice to us stating when the cancelation is to take effect. 2. We may cancel this policy. We must mail or de- liver to you not less than ten days advance writ- ten notice stating when the cancelation is to take effect. Mailing that notice to you at your mailing address shown in Item 1 of the Information Page will be sufficient to prove notice. 3. The policy period will end on the day and hour stated in the cancelation notice. 4. Any of these provisions that conflict with a law that controls the cancelation of the insurance in this policy is changed by this statement to com- ply with the law. E. Sole Representative The insured first named in Item 1 of the Information Page will act on behalf of all insureds to change this policy, receive return premium, and give or receive notice of cancelation. Signatures of Authorized Representatives of Insurer resident 6 of 6 © Copyright 2013 National Council on Compensation Insurance, Inc. All Rights Reserved. Secretary