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HomeMy WebLinkAboutCSG Consultants, Inc. - 2012-06-18Dept. ID PL 13-019 Page 1 of 2 Meeting Date: 9/3/2013 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 9/3/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Scott Hess, AICP, Director of Planning and Building SUBJECT: Approve and authorize execution of amendments to two existing contracts between the City of Huntington Beach and CSG Consultants, Inc. for Plan Review Services and Buildina Staffina Services Statement of Issue: This is a request to amend two existing Professional Services Contracts between the City and CSG Consultants, Inc. The contract for building plan review services would be increased by $100,000 for a total amount not to exceed $740,000. The existing building staffing services contract would increase by $300,000 for a total amount not to exceed $450,000. Financial Impact: An appropriation of $100,000 from the General Fund to the Planning and Building Department Professional Services Account 10060501.69365 is required. These funds will be offset by revenue collected in the Building Plan Review Account 10000100.47215. An appropriation of $300,000 from the General Fund to the Planning and Building Department Professional Services Account 1006001.69365 is required. These funds will be offset by revenue collected in the Building Inspection Account 10000100.42310. Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement Between the City of Huntington Beach and CSG Consultants, Inc. For Plan Review Services;" (Attachment No. 2) and, B) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Agreement Between the City of Huntington Beach and CSG Consultants, Inc. For Building Staffing Services." (Attachment No. 1) Alternative Action(s): The City Council may make the following alternative motion(s): 1. Deny the Amendment No. 2 to the agreement between the City and CSG Consultants, Inc. 2. Deny the Amendment No. 1 to the agreement between the City and CSG Consultants, Inc. 3. Continue the item and direct staff accordingly. Item 5. - 1 HB -46- Dept. ID PL 13-019 Page 2 of 2 Meeting Date: 9/3/2013 Analysis: Plan Review Services On August 20, 2012, the City of Huntington Beach approved a two-year, three hundred thousand dollar ($300,000) contract with CSG Consultants, Inc. for plan review services. Subsequently, on May 6, 2013, City Council approved Amendment No. 1 to the contract for an additional $340,000 for a total contract amount not to exceed $640,000. Currently, there is no staff to perform certain plan review services (specifically structural building plan checks). Therefore, we are using outside consultants. Applicants who submit projects to the City pay fees for these services and expect reasonable service levels. The original contract was funded by salary savings and the first amendment was funded by increased revenues collected from building plan review services. In the past 10 months those funds have been exhausted due to the increase in activity throughout the city, including submittal of numerous mixed -use and multifamily residential projects along the Beach and Edinger corridors. This increase in activity is anticipated to continue with the upcoming submittals of projects4ong Pacific Coast Highway. With the submittal of these large projects the year to date revenue collected is $1,050,931 while the cost of outside professional services has been $517,535. The additional revenue plus the revenue collected over the remaining two months of FY12/13 can support the request for the General Fund appropriation. Building Staffing Services On June 18, 2012, the City of Huntington Beach approved a three-year, one hundred fifty thousand dollar ($150,000) contract with CSG Consultants, Inc. for Building Staffing Services, specifically for inspection services. Three large projects paid inspection fees within the last four calendar months of FY12/13 and work on these projects will commence in FY13/14. In order to meet expected inspection demand, the Planning and Building Department requires additional resources to provide inspection services at these three large development projects. With the permit issuance of these large projects plus the increase in building permit activity, the year to date revenue collected is $ 2,984,920 while the forecasted revenue was $2,850,000. This additional revenue plus the revenue collected over the remaining two months of FY12/13 can support the request for the General Fund appropriation. Environmental Status: The request is exempt pursuant to Section 15061(b)(3) of the California Environmental Quality Act. Strategic Plan Goal: Improve the City's infrastructure 1. Amendment No. 2 to Agreement between the City of Huntington Beach and CSG ->✓ Consultants, Inc. for Plan Review Services � ��� 2. Amendment No 1 to Agreement between the City of Huntington Beach and CSG Consultants, Inc. for Plan Review Services 3. Original Contract for Professional Services Contract between the City of Huntington Beach and CSG Consultants, Inc. for Plan Review Services 4. Amendment No. 1 to Agreement between the City of Huntington Beach and CSG Consultants, Inc. for Building Staffing Services 5. Original Professional Services contract between the City of Huntington Beach and CSG Consultants in for Building Staffing Services 6. Insurance Certificate and Waiver SH:KDC:MBB:DG HB -47- Item 5. - 2 -ATTACHMENT #4 11 -- ___j Item 5. - 27 HB -72- AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND CSG CONSULTANTS, INC. FOR BUILDING STAFFING SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "City," and CSG CONSULTANTS, INC., a California corporation, hereinafter referred to as "Consultant." WHEREAS, City and Consultant are parties to that certain agreement, dated June 18, 2012, entitled "Professional Services Contract Between the City of Huntington Beach and CSG Consultants, Inc. for Building Staffing Services" which agreement shall hereinafter be referred to as the "Original Agreement"; and City and Consultant wish to amend the Original Agreement to add more tasks and increase the amount of the compensation to be paid to Consultant, NOW, THEREFORE, it is agreed by City and Consultant as follows: 1. ADDITIONAL TASKS AND COMPENSATION. Consultant agrees to perform additional counter services and field inspections as requested by City. In consideration of the performance of such additional tasks, City agrees to pay Consultant on a time and materials basis at the rates specified in the Original Agreement, an additional sum, including all costs and expenses, not to exceed Three Hundred Thousand Dollars ($300,000.00). This additional sum shall be added to the original contract amount of One Hundred Fifty Thousand Dollars ($150,000.00), for a new total contract amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000.00). 2. REAFFIRMATION. Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. 13-3662.001 / 99899 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on �� 03 , 2013. CSG CONSULTANTS, INC. A California corporation By:� , r' c, print name ITS: (circle one) Chairman/Presiden ice President AND By: kwo#*� DvortC, print name ITS: (circle one) Secretary/LChief Financial Officer/Asst. Secretary Treasurer 13-3662.001 / 99899 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of Director of Planning & Building APPROVED AS TO FORM: Attorn ey � 3 �.13 y -7z� I� /l -O7' REVIl /EDaAND APPROVED: 2 ATTACHMENT #5 xs -75- Item 5. - 30 City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk June 21, 2012 Khoa Duong CSG Consultants, Inc. 801 Park Center Drive, #230 Santa Ana CA 92705 Dear Mr. Duong: Enclosed for your records is an original signed copy of the "Professional Services Contract Between the City of Huntington Beach and CSG Consultants, Inc., for Building Staffing Services. Sincerely, oan L. Flynn, CIVIC City Clerk JF:pe Enclosure G:folwu :agr�r►tltr tst'r toes: Anjo, Japan ♦ Waitakere, New Zealand Item 5. - 31 xB -76- ..�J • (,�per/C,.���-CCG,� "r � tr � ' 7, /�- Council/Agency Meeting Held: - l Def�e red/Continued to: Q Approv Conditionally Approved ❑ Denied City Clerk's Signat Coun it Meeting Date: June 18, 2012 Department ID Number: PL 2012-014 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Scott Hess, AICP, Director of Planning and Building SUBJECT: Approve Professional Services Contract with CSG Consultants, Inc. for Contract Inspection Services at The Village Residential at Bella Terra II; approve a Reimbursement Agreement with Holland Construction, Inc.; and, appropiate funds to be fully reimbursed Statement of Issue: Transmitted for City Council's consideration is a professional services agreement with CSG Consultants, Inc. for Building Division staffing services at The Village at Bella Terra II residential project and a reimbursement agreement with Holland Construction, Inc. to fund the special building inspection services requested. Financial Impact: None. An appropriation of $150,000 from the General Fund to the Planning and Building Department Professional Services Account 10060401.69365 is required. However, these funds will be offset by the attached reimbursement agreement with the developer of the project, Holland Construction, Inc. Recommended Action: Motion to: A) Approve and authorize the Mayor and City Clerk to execute the "Professional Services Contact between the City of Huntington Beach and CSG Consultants, Inc. for Building Staff Services" in the amount of One Hundred and Fifty Thousand Dollars ($150,000), as prepared by the City Attorney; and, B) Approve and authorize the Mayor and City Clerk to execute the "Reimbursement Agreement Between the City of Huntington Beach and Holland Construction, Inc. for Costs Incurred for Special Services" in the amount of One Hundred and Fifty Thousand Dollars ($150,000), as prepared by the City Attorney; and, C) Appropriate funds in the amount of $150,000 from the City's General Fund to the Planning and Building Department Professional Services Account 10060401.69365 for the Professional Services contract between the City and CSG Consultants, Inc., which is funded by the reimbursement agreement. �,� ..�� � Qom- C�cc,G-�►-� HB _77_ 1Item 5. - 32 h,D -juJ- 11.V111 1 V. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 6/18/2012 DEPARTMENT ID NUMBER: PL 2012-014 Alternative Action(s): The City Council may make the following alternative motions: 1. Deny the Professional Services Contract between the City and CSG Consultants, Inc. and the Reimbursement Agreement between the City and Holland Construction, Inc. or 2. Continue the item and direct staff accordingly. Analysis: Holland Construction, Inc. has begun construction at The Village at Bella Terra II residential project. In order to help expedite the project, the developer has requested that the Planning and Building Department commit sufficient resources to provide special inspection services. The special services are to include a full-time Building Inspector assigned to the project for twelve months. In order to provide for the special services, it will be necessary for the City to hire a contract inspector. To pay for these services, the City and Holland Construction, Inc. will enter into a Reimbursement Agreement in the amount of $150,000. The payments have been divided into two equal payments of $75,000, the first due on or before June 25, 2012 and the second payment by December 25, 2012. CSG Consultants, Inc. currently provides contract inspectors to the City. Staff recommends the City Council approve the agreement with CSG Consultants, Inc. for a not -to -exceed total contract amount of $150,000 and authorize the Mayor and City Clerk to execute the documents. CSG Consultants, Inc. is well respected in the industry and continues to provide exceptional services for the City of Huntington Beach. Also, CSG Consultants, Inc. works exclusively for government agencies avoiding any conflict of interest with private developers. If the Reimbursement Agreement and budget appropriation to the Planning and Building Department are not approved, the City will not be able to provide the proposed special services in order to meet the developer's construction schedule. Staff solicited proposals from the following three qualified vendors for this project: - CSG Consultants, Inc. - Scott Fazekas & Associates, Inc. - Charles Abbott and Associates, Inc. Staff distributed Requests for Proposals for Building Staffing Services to these three consultants. One proposal was received from CSG Consultants, Inc. One consultant indicated that they were committed to other projects and elected to decline to submit a proposal, and one consultant did not respond to the Request for Proposal. The proposal was reviewed by staff, and then other cities were contacted to determine the fair prevailing wage for the services to be performed. It was determined that CSG Consultants, Inc proposal to be competitive. Staff recommends approval of the professional services agreement with CSG 'Consultants, Inc. and the reimbursement agreement with Holland Construction, Inc. Item 5. - 33 HB -78_ 14V111 1 V . Ls 111J -1 VT- REQUEST FOR COUNCIL ACTION MEETING DATE: 6/18/2012 DEPARTMENT ID NUMBER: PL 2012-014 Environmental Status: Not Applicable Strategic Plan Goal: Improve the City's infrastructure Attachment(s): -,* � � L4., HB -79- HD -1V.J- Item 5. - 34 IL1i111 x V . - A TA C_HMENT #1 Item 5. - 35 1HB -80- PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CSG CONSULTANTS, INC. FOR BUILDING STAFFING SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY, and CSG Consultants, Inc., a California Corporation hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to perform counter services and field inspections; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Khoa Duong who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. agree/ surfnet/professional Svcs mayor 1 of 11 l2/07 HB -81- Item 5. - 36 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on 20_0 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than 45 days from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed One Hundred and Fifty Thousand Dollars ($150,000). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake agree/ surfnedprofessional svcs mayor 2 of 11 Item 5. - 37 Hs -82- such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall tuna these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any agree/ surfnet/professional svcs mayor 3 of 11 12/07 HB -83- Item 5. - 38 insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and fumish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above -mentioned insurance shall not contain a self -insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims -made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect agree/ surfneUprofessional svcs mayor 4 of 11 Item 5. - 39 1413 -84- Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. agree/ surfnedprofessional svcs mayor 5 of 11 lzro7 xB -85- Item 5. - 40 CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. agree/ surfnedprofessional Svcs mayor 6 of 11 Item 5. - 41 HB -86- 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: TO CITY: City of Huntington Beach ATTN: Scott Hess, Director of Planning & Building 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULTANT: Khoa Duong CSG Consultants, Inc. 801 Park Center Dr. #230 Santa Ana, CA 92705 When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. agree/ surfneYprofessional svcs mayor 12/07 7of11 Item 5. - 42 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be agree/ surfnet/professional Svcs mayor 8 of 11 Item 5. - 43 HB -88- 1 curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY' S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. agree/ surfnedprofessional svcs mayor 9 of 11 12/07 HB -89- Item 5. - 44 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. CONSULTANT's initials C 11- U/L 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that. party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof agree/ surfner/professional svcs mayor 10 of 11 Item 5. - 45 HB -90- 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Council. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CSG CONSULTANTS, INC. COMPANY NAME print name " ITS: (circle one[Chairmart:!5111ice President ND By: o Cicx . P• print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk APPROVED: Manager ROVED AS TO FORM: e� Ci Attorney agree/ surfnet/professional svcs mayor 12/07 11 of 11 HB -91- Item 5. - 46 EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of work to be performed) 1. Perform counter services and field inspections of construction projects to ensure that the contractor or homeowner properly follow the approved construction plans and standards in accordance with the adopted building codes. B. CONSULTANT'S DUTIES AND RESPONSIBILITIES: 1. CSG Consultants, Inc. to maintain daily inspection records and all necessary documents on file and available to the City. 2. Consultant will perform as an extension of staff. C. CITY'S DUTIES AND RESPONSIBILITIES: 1. City shall provide the workplace for all employees in strict compliance with applicable health and working standards and specifications. 2. City shall comply with all safety engineering and governmental health and safety rules, regulations, directives, orders or similar requirements. 3. City shall talce all actions necessary to establish and implement an injury and illness prevention program as required by the Occupational Injury Program Act. 4. City shall post or provide employee notices as required by law. 5. City shall notify CSG immediately of all employee illnesses, accidents, injuries, and absences. 6. City will make timely payments as outlined in Exhibit "B" D. WORK PROGRAM/PROJECT SCHEDULE: N/A EXHIBIT A Item 5. - 47 HB -92- EXHIBIT "B" Payment Schedule (Hourly Payment) A. Hourly Rate CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost schedule: Counter Services Building Inspector I Building Inspector II $45.00 per hour $55.00 per hour $65.00 per hour C • IL W B. Travel Charges for time during travel are not reimbursable. C. Billing 1. All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non -approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought 1 Exhibit B HB -93- Item 5. - 48 into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. Item 5. - 49 2 Exhibit B HB -94- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CSG CONSULTANTS, INC. FOR BUILDING STAFFING SERVICES Table of Contents Scopeof Services.....................................................................................................1 CityStaff Assistance................................................................................................2 Term; Time of Performance.....................................................................................2 Compensation..........................................................................................................2 ExtraWork...............................................................................................................2 Methodof Payment..................................................................................................3 Disposition of Plans, Estimates and Other Documents..........................................3 HoldHarmless.........................................................................................................3 Professional Liability Insurance.............................................................................4 Certificate of Insurance............................................................................................5 Independent Contractor............................................................................................6 Termination of Agreement.......................................................................................6 Assignment and Delegation......................................................................................6 Copyrights/Patents...................................................................................................7 City Employees and Officials..................................................................................7 Notices.........................................................................................7 Consent....................................................................................................................8 Modification............................................................................................................. 8 SectionHeadings.....................................................................................................8 Interpretation of this Agreement..............................................................................8 DuplicateOriginal....................................................................................................9 Immigration............................................................................................................... 9 Legal Services Subcontracting Prohibited................................................................9 Attorney's Fees..........................................................................................................10 Survival.....................................................................................................................10 GoverningLaw.........................................................................................................10 Signatories.................................................................................................................1.0 Entirety..............................................................................................................:.......10 EffectiveDate................................................................................. I I HB -95- Item 5. - 50 J Su iiy INSURANCE AND INDEMNIFICATION WAIVER ,tee MODIFICATION REQUEST 1. Requested by: Planning and Building -, 2. Date: 3/15/2012 3. Name of contractor/permittee: CSG Consultants, Inc. 4. Description of work to be performed: Professional Inspection Services 5. Value and length of contract: $30,000; 3/15/2012 to 12/14/2012 6. Waiver/modification request: $50,000 SIR on professional liability 7. Reason for request and why it should be granted: Unable to comply with requirements, financials requested 8. Identify the risk" the City in approving this waiver/modification: N/A epartment Heaa Signature � //*//,// 7- Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from he City Admini rator's Offioe Is only required if Risk Management t�d'th City Attorney' ice disagree. 1 K k Management proved ❑ Denied pL' Signature bate 2. City Attorney's Office zNii4proved ❑ Deni Signature Date 3. City Manager's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources '- ....._..e Waiver Form 3/15/2012 11:23:00 AM Item 5. - 51 xB -96- A� ©® CERTIFICATE OF LIABILITY INSURANCE °12/15/2o 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(les) 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 0726293 1-415-546-9300 CONMTACT NAE: Don Tarantino Arthur J. Gallagher & Co. Insurance Brokers of California, Inc., License #0726293 PHONE FAX 415-536-8627 C No xt•415-536-8617 A/C No: EMAIL don tarantino@ajg.com ADDRESS: j g' One Market Plaza, Spear Tower P INSURERS AFFORDING COVERAGE NAIC # Suite 200 San Francisco, CA 94105 INSURER A: TRAVELERS PROP CAS CO OF AMER 25674 INSURED INSURERS: SENTINEL INS CO LTD 11000 CSG Consultants Inc. INSURER C : ARCH INS CO 11150 INSURER0: 1700 S. Amphlett Blvd 3rd Floor INSURERE: San Mateo, CA 94402 INSURER F : COVERAGES CERTIFICATE NUMBER: 24484645 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS, INSR LTR TYPE OF INSURANCE AIDUL SUB K POLICY NUMBER POLIC/YEYri MMIDCO/VYYYY LIMITS A GENERAL LIABILITY X 6802941408SO-TIL-11 12/04/1 12/04/12 EACHOCCURRENCE $ 1,000,000 X COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED PREMISES cu rence $ 1, 000, 000 MEO EXP (Any one person) $ 10, 000 CLAIMS -MADE O OCCUR PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMPIOPAGG $ 2,000,000 $ PRO- X LOC POLICY JECT y'.. _ • A AUTOMOBILE LIABILITY X BA461M76 _ 2 04 1 12/04/12 COMBINED SINGLE LIMIT Ea acolden 1,000,000 .,•(• �i•'1`II� BODILYINJURY(Perperson) $ ANY AUTO -1..Y -.. �ALLOWNED BODILY INJURY(Peracdden0 $ SCHEDULED �` ) AUTOS AUTOS NON -OWNED Ix ' PROPERTYDAMAGE$ HIRED AUTOS H AUTOS A X UMBRELLALIAB I X I OCCl1R CDP294M1060 12/04/1 12/04/12 EACH OCCURRENCE $ 5,000,000 AGGREGATE $ 5,000,000 EXCESS LIAR CLAIMS -MADE 1 DEO I I RETENTION$ Following Form $ B WORKERS COMPENSATION X 57WEEP4360 12/04/1 12/04/12 X WCSTATU• Og AND EMPLOYERS' LIABILITY Y I N ANY PROPRIETORIPARTNERIEXECUTIVE[:] EJ..EACH ACCIDENT $ 1,000,000 E.L. DISEASE - EA EMPLOYEE $ 1,000,000 OFFICEMMEMBER EXCLUDED? (Mandatory In NH) NIA E.L. DISEASE - POLICY LIMIT $ 1,000,000 If yes, describe under DESCRIPTION OF OPERATIONS below C Prof Liability ARP004731500 12 04/1 12/04/12 Limit 3Mil/3Mi1 Retention 50,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach ACORD 707, Additional Remarks Schedule. If more apace Is required) Blanket Work Comp waiver of subrogation applies. All operations of the Named Insured, the City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers are additional insured per attached endorsement form CG D3 82 09 07- Additional Insured(Architects, Engineers, and Surveyors). Primary insurance endorsement form CG DO 37 04 05. The City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers are additional insured with respect to Auto Liability per Auto Coverage Plus Endorsement form CA FO 82 12 07. City of Huntington Beach Attn: Risk Management 2000 Main Street intington Beach, CA 92648 ACORD 25 (2010/05) mohsinean 24484645 CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE USA ©1988-2010 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD .; . Item 5. - 52 COMMERCIAL. AUTO THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. AUTO COVERAGE PLUS ENDORSEMENT This endorsement modifies Insurance provided under the following: BUSINESS AUTO COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modi- fied by the endorsement. GENERAL DESCRIPTION OF COVERAGE — This endorsement broadens coverage. However, coverage for any Injury, damage or medical expenses described in any of the provisions of this endorsement may be excluded or limited by another endorsement to the Coverage Part, and these coverage broadening provisions do not apply to the extent that coverage Is excluded or limited by such an endorsement. The following listing Is a general cover- age description only. Limitations and exclusions may apply to these coverages. Read all the provisions of this en- dorsement and the rest of your policy carefully to determine rights, duties, and what is and Is not covered. A. BLANKET ADDITIONAL INSURED H. AUDIO, VISUAL AND DATA ELECTRONIC B. EMPLOYEE HIRED AUTO C. EMPLOYEES AS INSURED D. SUPPLEMENTARY PAYMENTS — INCREASED LIMITS E. TRAILERS — INCREASED LOAD CAPACITY F. HIRED AUTO PHYSICAL DAMAGE G. PHYSICAL DAMAGE. — TRANSPORTATION EXPENSES —INCREASED LIMIT A. BLANKET ADDITIONAL INSURED The following Is added to Paragraph A.1., Who Is An Insured, of SECTION II — LIABILITY COV- ERAGE: Any person or organization who is required under a written contract or agreement between you and that person or organization, that is signed and executed by you before the "bodily Injury" or "property damage" occurs and that is in effect during the policy period, to be named as an addi- tional Insured is an "Insured" for Liability Cover- age, but only for damages to wh Ich this Insurance applies and only to the extent that person or or- ganizatlon qualifies as an "insured" under the Who is An Insured provision contained in Section II, B. EMPLOYEE HIRED AUTO 1. The following is added to Paragraph A.1., Who Is An Insured, of SECTION II — LI- ABILITY COVERAGE: An "employee" of yours Is an 'insured" while operating a covered "auto" hired or rented under a contract or agreement In that "em- ployee's" name, with your permission, while CA T4 20 0710 00109 EQUIPMENT -- INCREASED LIMIT I. WAIVER OF DEDUCTIBLE — GLASS J. PERSONAL EFFECTS K. AIRBAGS L. AUTO LOAN LEASE GAP M. BLANKET WAIVER OF SUBROGATION performing duties related to the conduct of your business. 2. The following replaces Paragraph b. In B.S., Other Insurance, of SECTION IV — BUSI- NESS AUTO CONDITIONS: b. For Hired Auto Physical Damage Cover. age, the following are deemed to be cov- ered "autos" you own: (1) Any covered "auto" you lease, hire, rent or borrow; and (2) Any covered "auto" hired or rented by your "employee" under a contract in that individual "employee's" name, with your perrnission, while perform- ing duties related to the conduct of your business. However, any "auto" that Is leased, hired, rented or borrowed with a driver Is not a covered "auto". C. EMPLOYEES AS INSURED The following Is added to Paragraph A.1., Who Is An Insured, of SECTION li — LIABILITY COV- ERAGE: 02010 The Travelers Indemnity Company. All rights reserved. Includes oopyriahted material of Insurance Services Ortice, Inc. wfth Its permission. Page 1 of 3 Item 5. - 53 HB -98- COMMERCIAL AUTO Any "employee" of yours Is an "insured" while us- ing a covered "auto" you don't own, hire or borrow in your business or your personal affairs. D. SUPPLEMENTARY PAYMENTS — INCREASED LIMITS 1. The following replaces Paragraph A.2.a.(2) of sECTION 11— LIABILITY COVERAGE: (2) Up to $3,000 for cost of ball bonds (in- cluding bonds for related traffic law viola- tions) required because of an "accident" we cover. We do not have to fumish these bonds. 2. The following replaces Paragraph A.2.a.(4) of SECTION 11 — LIABILITY COVERAGE: (4) All reasonable expenses incurred by the "Insured" at our request, including actual loss of earnings up to $500 a day be- cause of time off from work. E. TRAILERS —INCREASED LOAD CAPACITY The following replaces Paragraph CA. of SEC- TION I — COVERED AUTOS: 1. "Trailers" with a load capacity of 3,000 pounds or less designed primarily for travel on public roads. F. HIRED AUTO PHYSICAL DAMAGE The following Is added to Paragraph A.4., Cover- age Extensions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Hired Auto Physical Damage Coverage If hired "autos" are covered "autos" for LlablPty Coverage but not covered "autos" for Physical Damage Coverage, and this policy also provides Physical Damage Coverage for an owned "auto", then the Physical Damage Coverage Is extended to "autos" that you hire, rent or borrow subject to the following: (1) The most we will pay for "loss" in any one "accident" to a hired, rented or borrowed "auto" is the lesser of, (a) $50,000; (b) The actual cash value of the damaged or stolen property as of the time of the "loss"; or (c) The cost of repairing or replacing the damaged or stolen property with other property of like kind and quarity. (2) An adjustment for depreciation and physical condition will be made In determining actual cash value in the event of a total "loss (3) If a repair or replacement results In better than like kind or quality, we will not pay for the amount of betterment. (4) A deductible equal to the highest Physical Damage deductible applicable to any owned covered "auto". (5) This Coverage Extension does not apply to: (a) Any "auto" that is hired, rented or bor- rowed with a driver; or (b) Any "auto" that is hired, rented or bor- rowed from your "employee". G. PHYSICAL DAMAGE — TRANSPORTATION EXPENSES — INCREASED LIMIT The following replaces the first sentence In Para- graph A.4.a., Transportation Expenses, of SECTION iII — PHYSICAL DAMAGE COVER- AGE: We will pay up to $50 per day to a maximum of $1,500 for temporary transportation expense In- curred by you because of the total theft of a cov- ered "auto" of the private passenger type, H. AUDIO, VISUAL AND DATA ELECTRONIC EQUIPMENT — INCREASED LIMIT Paragraph C.2.. Limit Of Insurance, of SEC. 'PION IiI — PHYSICAL DAMAGE COVERAGE Is deleted. I. WAIVER OF DEDUCTIBLE — GLASS The following Is added to Paragraph D., Deducti- ble, of SECTION iIt — PHYSICAL DAMAGE COVERAGE: No deductible for a covered "auto" will apply to glass damage if the glass is repaired rather than replaced. J. PERSONAL EFFECTS The following is added to Paragraph AA.. Cover- age Extensions, of SECTION Ili — PHYSICAL DAMAGE COVERAGE: Personal Effects Coverage We will pay up to $400 for "loss" to wearing ap- parel and other personal effects which are: (1) Owned by an "Insured"; and (2) In or on your covered "auto". This coverage only applies in the event of a total theft of your covered "auto". No deductibles apply to Personal Effects cover- age. Page 2 of 3 02010'rhe Travelers Indemnfty company. All rlgMls reeerved. CA T4 20 0710 includes copyrighted material of insurance services Office, inc. w1h its permleslon. HB -99- Item 5. - 54 a K. L. AIRBAGS The following Is added to Paragraph B.3., Exclu- sions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Exclusion 3.a. does not apply to 'loss" to one or more airbags In a covered "auto" you own that In- flate due to a cause other than a cause of "loss" set forth in Paragraphs A.1.b, and A.1.c., but only: a. if that "auto" is a covered "auto" for Compre- hensive Coverage under this policy; b. The alrbags are not covered under any war- ranty; and c. The airbags were not Intenllonaliy Inflated. We will pay up to a maximum of $1,000 for any one "loss". AUTO LOAN LEASE GAP The following Is added to Paragraph A.4., Cover- age Extensions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Auto Loan Lease Gap Coverage for Private Passenger Type Vehicles In the event of a total "loss" to a covered "auto" of the private passenger type shown in the Schedule or Declarations for which Physical Damage Cov- erage Is provided, we will pay any unpaid amount due on the lease or loan for such covered "auto" less the following; (1) The amount paid under the Physical Damage Coverage Section of the policy for that "auto"; and COMMERCIAL AUTO (2) Any: (a) Overdue lease or loan payments at the time of the "loss' (b) Financial penalties Imposed under a lease for excessive use, abnormal wear and leer or high mileage; (c) Security deposits not returned by the les- sor; (d) Costs for extended warranties, Credit Life insurance, Health, Accident or Disability Insurance purchased with the loan or lease; and (a) Carry-over balances from -previous loans or leases. M. BLANKET WAIVER OF SUBROGATION The following replaces Paragraph A.6., Transfer Of Rights Of Recovery Against Others To Us, of SECTION IV — BUSINESS AUTO CONDI- TIONS: 5. Transfer Of Rights Of Recovery Against Others To Us We waive any right of recovery we may have against any person or organization to the ex- tent required of you by a written contract exe. cuted prior to any "accident" or "loss", pro- vided that the "accident" or "loss" arises out of the operations contemplated by such con- tract. The waiver applies only to the person or organization designated In such contract, CA T4 20 0710 ® 2010 The Travelers Indemnity company. AN rights reserved, Includes copyrighted materlel of Insurance Services Office, Inc. with its permission. OD1640 Page 3 of 3 Item 5. - 55 HB -100- COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY, OTHER INSURANCE — ADDITIONAL INSUREDS This endorsement modifies Insurance provided under the following, COMMERCIAL GENERAL LIABILITY COVERAGE PART PROVISIONS b. The "personal Injury" or "advertising injury" inr COMMERCIAL GENERAL LIABILITY CONDITIONS which coverage is sought 0808 nut of an of- (Saullun IV), Feregraph► 4. (outer Insurance), Is fense commlitad amended as follows; subsequent to the sighing and execution of that 1. The following Is added to Paragraph a. Primary contract or agreement by you, Insurance., 2. Tho first 8ubparagraph (2) of Paragraph b. Ex - However, If you epectflosify agree In a written con- cars Insurance regarding any other primary In - tract or written egresmeni that the Insurance pro- surance available to you Is daleted. - vlded to an additional Insured under this Coverage Pali must apply on a primary basis, or 3. The following is added to Paragraph b, Exooso Insurance, as an addlllonal eubparagraph under a primary and non-contributory basis, this Insur- Subparagraph (1), anoe Is primary to other Insurance that Is avail- able to such additional Insured which covers such That Is available to the Insured when the Insured addlional Insured as a named Insured, and we wIII not share with that other Insurance, provided lIe added as an additional Insured under any other saaddpolicy, Including any umbrella re excess policy. that, a. The "bodliy Injury" or "property damage" for which coverage Is sought occurs; and CO DO 37 04 06 Copyright 2006 The 81, IIiUI Travelers Companies, Inc, All rights reserved. Page t of 1 HB -101- Item 5. - 56 POLICY NUMBER: 680-294NO850-TIL-11 COMMERCIAL GENERAL LIABILITY ISSUE DATE: 11-07-11 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL° INSURED (ARCHITECTS, ENGINEERS AND SURVEYORS) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE NAME OF PERSON(S) OR ORGANIZATION(S): PER SCHEDULE ON FILE WITH AGENT PROJECT/LOCATION OF COVERED OPERATIONS; PROVISIONS A. The following is added -to WHO IS AN INSURED (Section II): The person or organization shown in the Sched- ule above Is an additional Insured on this Cover- age Part, but only with respect to liability for "bod- ily Injury", "property damage" or "personal Injury" caused, In whole or in part, by your acts or omis- sions or the acts or omissions of those acting on your behalf: a. in the performance of your ongoing opera- tions; b. In connection with premises owned by or rented to you; or c. in connection with "your woW and Included withln the "products -completed operations hazard". Such person or organization does not qualify as an additional Insured for "bodily injury", "property damage" or "personal injury" for which that per- son or organization has assumed liability in a con- tract or agreement. The Insurance provided to such additional Insured Is limited as follows; d. This Insurance does not apply to the render- Ing of or failure to render any "professional services". e. The limits of Insurance afforded to the addi- tional insured shall be the limits which you agreed In that "contract or agreement requir Ing Insurance" to provide for that additional Insured, or the limits shown In the Declara• tions for this Coverage Part, whichever are less. This endorsement does not Increase the limits of insurance stated in the LIMITS OF INSURANCE (Section III) for this Coverage Part. B. The following is added to Paragraph a. of 4. Other Insurance in COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): However, If you specifically agree in a "contract or agreement requiring insurance" that, for the addi- tional Insured shown In the Schedule, the Insur- ance provided to that additional Insured under this CG 03 82 09 07 0 2007 The Travelers Companies, Inc. Includes the copyrighted material of insuranoe Services OfBoe, Ino., with Its permission 004e74 Page 1 of 2 Item 5. - 57 HB -102- COMMERCIAL GENERAL LIABILITY Coverage Part must apply on a primary basis, or a primary and non-contributory basis, this Insur- ance Is primary to other insurance that is avail- able to such additional Insured which covers such additional Insured as a named insured, and we will not share with the other Insurance, provided that: (1) The "bodily Injury" or "property darnage" for which coverage is sought occurs; and (2) The "personal Injury" for which coverage Is sought arises out of an offense committed; rafter you have entered Into that "contract or agreement requiring insurance" for such addi- tional insured. But this Insurance still is excess over valid and collectible other Insurance, whether primary, excess, contingent or on any other basis, that Is available to the additional In- sured when the additional Insured is also an addi- tional insured under any other insurance. C. The following Is added to Paragraph S. Transfer Of Rights Of Recovery Against Others To Us In COMMERCIAL. GENERAL LIABILITY COW DITIONS (section IV): We waive any rights of recovery we may have against the additional Insured shown in the Schedule above because of payments we make for "bodily Injury", "property damage" or "personal Page 2of2 injury" adsl rig out of "your work" on or for the pro- ject, or at the location, shown In the Schedule above, performed by you, or on your behalf, un- der a "contract or agreement requiring Insurance" with that additional Insured. We waive these rights only where you have agreed to do so as part of the "contract or agreement requiring Insur- ance" with that additional insured entered into by you before, and In effect when, the "bodily Injury" or "property damage" occurs, or the "personal In- jury' offense is committed. D. The following definition is added to DEFINITIONS (Section V). "Contract or agreement requiring Insurance" means that part of any contract or agreement un- der which you are required to Include the person or organization shown In the Schedule as an ad- ditional insured on this Coverage Part, provided that the "bodily injury" and "property damage" or, ours, and the "personal Injury" Is caused by an of- fense committed: a. After you have ordered Into that contract or agreement; b. While that part of the contract or agreement Is In effect; and c. Before the end of the policy period. ® 2007 The Travelers Companies, Inc. Includes the copyrighted material of Insurance Services office, Inc., with Its permission CG D3 82 08 07 HB -103- t Item 5. - 58 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WORKERS OOMIPENSATION BROAD FORM ENDORSEMENT EXTENDED OPTIONS P floyNumber: 57 WE EP4360 EndorsetnentNumber: o Effective Date: 12 / 04/ 11 Effective hour is the same as stated on the Information Page of the policy. Nam d Insured and Address; CSO CONSULTANTS INC 0 ri 0 0 N Co Co M mom am om a� Mew t� i� e9m a� ORM i� 1700 S A iPHLETT BLVD 3RA FL SAN MATEO, CA 94402 Section I of this endorsement expands coverage provided under WC 00 00 00. t3e011on II of this endorsement provides addillonal coverage usually only provided by endorsement. Section III of this endorsement Is a Schedule of Covered States. You may use the index to locate these ooverage features quickly: U8J C SECTION I PARTS ONE and TWO 01 We Will Also Pay PART -THREE 02 How This insurance Worics PART- SIX 08 Transfer of Your Rights and Duties 04 Liberalization SECTION g VOLUNTARY COMPENSATION INSURANCE 06 Voluntary Compensation Insurance A. Now This Insurance Applies B. We Will Pay C. Exclusions D. Before We Pay S. Recovery From Others F. Employers' Liability insurance EMPLOYERS! LIABILtR STOP OAP ENDORt31 MENT 06 Employers' Liability Stop Gap Coverage A. Slap Gap Coverage Limited to Montana, North Dakota, Ohio, Washington, West Virginia and Wyoming Faun WC 99 QS 09 0 Printed in U.S.A. (Ed. 8/00) PnaoessDat : 11/16/11 PM SUBJECT PM 2 B. Part One Does Not Apply 3 2 C. Application of Coverage 3 2 D. Additional Exclusions 8 2 E. West Virginia 3 2 EXr5NDED OPTIONS 4 2 01 Employers' Liability Insurance 4 2 02 Unintentional Failure to Disclose 4 2 Hazards 2 03 Waiver of Our Right to Recover from 4 2 others 04 Foreign Voluntary Compensation 4 2 A. HowThls Reimbursement Applies 4 2 B. We Will Reimburse 4 3 C. Exclusions 4 3 D, Before We Pay 5 3 E. Recovery From others 5 3 F. Reimbursement For Actual Loss 6 3 Sustained 3 0. Repatriation 5 H. Endemic Disease 5 3 05 Longshors and Harbor Workers' 5 Compensation Act Coverage 3 Endorsement SECTION 10 6 01 Schedule of Covered States 6 02000, The Hartford Pag lot 6 Polloy IFXPI atlnh Oat : 12 /04/3.2 Item 5. - 59 HB -104- SECTION I PARTS ONE and TWO I. WE WILL ALSO PAY D. We Wild Also Pay of Part One (WORKERS' COMPENSATION INSURANCE); and E. We Will Also Pay of Part Two (EMPLOYERS' LIABILITY INSURANCE) Is replaced by fhe following; We Will Also Pay We will also pay these costs, in addition to other amounts payable under this Insurance, as part of any claim, procoodfng, or suit we defend: 1. reasonable expenses Incurred at our request, INCLUDING 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; S. litigation costs taxed against you; 4. Interest on a judgment as 'required by law untll we offer the amount due under this law; and 5. expenses we Incur. PARTTHREE 2. How This lneurance Applies Paragraph 4. of A. Now This lnsuranc Appil a of Part 3 (Other States Insurance) Is replaced by the following; 4. 11 you have work on the effective data of thla pollcy In any state not listed In Item S.A. of the Information Page, coverage will not be afforded for that stale unless we are notified within sixty days. (PART SIX 3. Transfer Of Your Rights and Duties C. Transfer Of Your Rights and Bull a of (Part 6 (Conditions) is replaced by the following: Your rights or duties under this policy may not be transferred without our written consent. II you die and we receive notice within sixgl days after your death, we will cover your legal representative as insured. 4. Liberalization If we adopt a change In this form that would broaden the coverage of this Corm without extra charge, the bmadar coverage will apply to INs policy. It will apply when the change becomes effective in your state. SECTION 11 VOLUNTARY COMPENSATION AND EMPLOYERS, 3. The bodily Injury must occur in the United LIABILITY COVERAGE States of America, Its territories or S. V luMaly Compensation Insurance possesslons, or Canada, and may occur A. H +w Thfs Insurance Applies elsewhere It the employee Is a .UnIled Slates or Canadlan a tizen, or otherwise This Insurance applies to bodily injury by legal resident, and legally employed, In the accident or bodily Injury by disease. Bodily United States or Canada and tamporadly injury Includes resulting death. away from those places, 1. The bodily injury must be sustained by any 4. Bodily Injury by accident must occur officer or employee not subject to the during the policy period. workers' oomponsatlon law of any state 5, Bodily injuty by disease must he caused shown In Itain S.A. of the Infcrmatlon or aggravated by the conditions of the Page, 2. The bodily Injury must arise out of and In fhe course of employment or Incidenlal to work In a state shown In Item &A. of the information Page. P no WC 99 03 03 B Printed In U.S.A. (Ed. SMO) Pag 2 of S HB -105- Item 5. - 60 N M a Pr 0 a O to �i �i rmv ca 0 m 41 offloor's or employee's employment. The officer's or employee's fast day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period, B. We Witt Pay We will pay an amount equal to the benefits that would be required of you as If you and your employees were subject to the workers' compensalion law of any state shown In item 3.A, of the Information Page, We will pay those amounts to the persons who would be entlliad to them under the law. C. Exclusion This Insurance dose not cover, f. any obligation Imposed by workers' compensation or occupational disease law or any similar law. 2, bodily Injury Intentionally caused or aggravated by you. S. officers or employees who have elected not to be subject to the state workers' compensation law. 4. partners or sole proprietors not covered under the Standard Sole Proprietors, Partners, Officers and Others Coverage Endorsement. D. Before We pay Before we pay benefits to the persons entitled to them, they must: t. Release you and us, In writing, of all responsibility for the Injury or death. 2, Transfer to us their right to recover from others who may be responsible for the Injury or death. a. Cooperate with us and do everything necessary to enable us to enforce the right to recover from others. ff the persons entitled to the benefits of this insurance fail to do those filings, oul' duty to pay ends at once. If they claim damages from you or from us for the Injury or death, our duty to pay ends at once. E. Recovery From Othsra If we maice a recovery frorn others, we will keep an amount equal to our expenses of recovery and the benafits we paid. We will pay the balance to the persons entitled to It F M WC 99 03 03r B Printed In U,S.A, (Ed. 8/00) If the persons entitled to the benefits of Hilo Insurance make a recovery from others, they must reimburse us for the benefits we paid them. F. Employers' Liability Insurance Part Two (Employers' Liabliily insurance) applies to bodily Injury covered by this endorsement as though the State of, Employment was shown In Item U. of the Information Page. This provision S. does not apply in Now. Jersey or Wlscons►n. EMPLOYERS' LIABILITY STOP GAP COVERAGE 6. Employers' Liablfliy Stop Gap Coverag A. This coverage only applies in Montana, North Dakota, Ohio, Washington, West Virginia and Wyoming. B. Part One (Workers' Compensation Insurance) does not apply to work In states shown In Paragraph A above. C. Part Two (Employers' Lfabllity Insurance) applies In the states, shown In Paragraph A., as though they were shown In item U. of the Information Page. D. Part Two, Section C. Exclusions Is changed by adding these exclusions, This Insurance does not cover, S. bodily Injury Intentionally caused or aggravated by you or In Ohio bodily Injury resulting from an aot which is determined by an Ohio avert of law to have been committed by you with the belief than an Injury Is substantially certain to occur. However, the cost of defending such claims or suits In Ohio Is covered. is, bodily Injury sustained by any member of the flying crew of any aircraft. 14, any claim for bodily injury with respect to which you are deprived of any defense or defenses or are otherwise subject to penalty because of default in premium under the provisions of the Workers' compensation law or laws of a state shown In Paragraph A. E. This Insurance applies to damages for which you are liable under West Virginia Code Annot. S 23.4-2. Page 3 f 6 Item 5. - 61 HB -106- EXTENDED OPTIONS 1. Empl yere Liability Insurance Item 3.13. of the information Page is replaced by the following; 13. Employers' Liability Insurance: 1. Part Two of the policy applies to work In each state listed in Item 3.A. 2. S. The Limits of Liability under Part Two are the higher of: 13odily fnlury, by Accident $500.000 Each Accident Bodily Injury by Disease $500,000 Policy Limit Bodily Injury by disease $500,000 Each Employee OR 2. The amount shown in the information Page. This provision 1 of EXTENDW OPTIONS does not apply In New York because the Limits Of Our Liability are uniimited. In this provision the limits are dranged from $500,000 to $1,000,000 in California. Untnt ntlonal Failure to Disclose Hazards If you unintentionally should fall to disclose all existing hazards at the inception date of your Policy, we shall not deny ooverage under this pollcy because of such failure, Waiver of Our Right To Recovar From Others A. We have the right to recover our payments from anyone liable for an Injury covered by this policy. We will not enforce our right against any person or organization for whom you perform work under a written contract that requires you to obtain this agreement from its, This agreement shall not operate directly or indirectly to benefit anyone not named in the agreement, B. This provision S. does not apply In ilia states of Pennsylvania and Utah. F rm WC go o3 03 0 Printed In U.S.A. (Ed. 8100) 4. Foreign Voluntary Compensation and Employers' Liability Reimbursement A. Now This Reimbursement Appiies This reimbursement provision applies to bodily injury by accident or bodily Injury by disease, Bodily Injury Includes resulting death. 1. The bodily Injury must be sustained by an officer or employee. 2. The bodily irqury must occur in the course Of employment necessary or Incidental to work In a country not listed In Exclusion C.I . of this provision. 8. Bodily Injury by accident must occur during the pollcy period. 4. Bodily Injury by disease must be caused or aggravated by the conditions of your employment. The officer or employee's Iasi exposure to those conditions of your employment must occur during the policy period. a. We Will Reimburse We will reimburse you for all amounts paid by you whether such amounts are.- 1 . voluntary payments for the benaflts that would be required of you if you and your officers or employees were subject to any workers' compensation law of the state of hire of the individual employee. 2. sums to which Part TWo (EmployaW Liability Insurance) would apply If the Country of Employment were shown in Item S.A. of the Information Page. C. Exclusions This insurance does not cover: 1. any occurrences In the United States, Canada, and any country or jurisdiction which is the subject of trade or economic sanctions Imposed by the laws or regulations of the United States of America In effsot as of the Inception data of this policy. 2. any obligation imposed by a worbrs' compensation or occupational disease law, or similar law. S. bodily inJury Intentionally caused or aggravated by you. Paige 4 18 HB -107- Item 5. - 62 " 4. liability for any consequence, whether direct of Indirect, of war, Invasion, act of Foreign enemy, hostilities (whath or war be declared or not), civil war, rebellion, revolution, Insurrection or military or usurped power. No endorsement now or subsequently attached to this policy shall be construed as overriding or waiving this limitation unless specific reference Is made thereto. D. Before We Pay Before we reimburse you for the benefits to ilia persons entitled to them, you must have them; !, release you and us, In writing, of all o responsibility for the Injury or death, 0 2. transfer to us their right to recover from others who may be responsible for their injury or death, 3. cooperate with us and do everything necessary to enable us to enforce the right o to recover from others. Ln If the persons entitled to the benefits paid fall « to do these things, our duty to reimburse ends at once, if they claim damages from us for the injury or death, our duty to reimburse ends at once, M. Recovery From Others V we make a recovery from others, we will r peep an amount equal to our expenses of recovery and the benefits we reimbursed. We will pay the balance to the persons entitled to ft. If persons entitled to the benefits make a recovery from others, they must repay us for the amounts that we have reimbursed you. F. Rplmbursament for Actual Lose Sustained ® This endorsement provides only for reimbursement for the loss you actually sustain. In order for you to recover loss of expenses under this reimbursement you must: i� t. actually sustain and pay the loss or expense In money after trial, or i� 2. secure our consent for the payment of the foss or expense. Q. RepaWatlon Our reimbursement Includes the additlonal expenses of repatriation to the United States F mn WC 99 03 03 B .Printed In U.S.A. (Ed, 0/00) Of America necessarily Incurred as a direct result of bodily injury. Our reimbursement shall be limited as follows: f . to the amount by which such expenses exceed the normal cost of returning the officer or employee if In good health, or 2. In the event of death, to the amount by which such expenses exceed the normal cost of returning the officer or employee If alive and in good health. In no event shall our reimbursement exceed the bodily Injury by accident limit shown In Item 0.8, of the Information Page as respects any one such officer or employee whether dead or alive. H. Elgdemio Disease The word "disease" includes any endemic diseases. The coverage applies as If endemic diseases were included In the provisions of the workers' compensation law. 5. Longshore and Hatiror Workers' Componsail n Act Coverage 0eneral Section C. Workers' Compensation Law Is replaced by the foilowIng: C. Workers' Compensation Law Workers' Compensation Law means the workers or workers' compensation law and occupational disease law of each state or territory named In item M. of the Information Page and the Longshore and harbor Workers' Compensation Act (33 USG Sections 9D1- 950). it includes any amendments to those laws that are in effect during the policy period. It does not Includs any other federal workers or woricers' compensallon law, other federal occupational disease law or the provisions of any law that provide nonoccupallonal dlsabtilty benefits. Part Two (Employers' Lfablilty Insurance), G. Exclusion, exclusion 8, does not apply to work subject to the Longshore and Harbor Workers' Compensation Act. This coverage does not apply to worts subject to the Defense Base Act, the outer Continental Shelf Lands Aot, or the Nonappropriated Fund Instrumentalities Act, Page 5 of 6 Item 5. - 63 JAB -108- SECTION III I. SCHEDULE OF COVERED STATES A. This endorsement only applies In the states listed in this Schedule of Covered States. C. Schedule of Covered States: CA B. If a state, shown In Item S.A. of the Information Page, approves this endomement after the effective date of this policy, this endorsement will apply to this policy. 'Pte coverage will apply In the new state on the effective data of the state approval.' Countersigned by Aulhorized Hapresentative F tm WC 89 03 03 B Printed in U.S.A. (Ed. 8/00) Pao 6 of HB -109- Item 5. - 64 DATE SUPPLEMENT TO CERTIFICATE OF INSURANCE 12/15/2011 NAME OF INSURED. CBG Consultants ZRc. Additional Description of Operations/Remarks from Page 1: AddWonal Information: Item 5. - 65 HB -110- CSG CONSULTANTS, INC. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2011 and 2010 KB -111- Item 5. - 66 CONTENTS Schedule Consolidated Balance Sheets ................................ Consolidated Statements of Income and Retained Earnings.......................2 Consolidated Statements of Cash Flows„3 Item 5. - 67 HB -112- CSG Consultants, Inc, Consolidated Balance Sheets ASSETS Current assets Cash and equivalents $ 453,906 $ 600,463 Accounts receivable, net of allowance for doubtful accounts 2,010,259 2,085,475 Unbilled accounts receivable 4,600 226,875 Insurance claim receivable - 531,250 Prepaid expenses 289,466 265,978 Total current assets 2,758,231 3,710,041 Property and equipment Computer and operations equipment 577,199 608,036 Furniture and fixtures 447,790 409,648 Vehicles 756,945 756,945 leasehold improvements 17,550 17,550 1,799,484 1,792,179 Less: accumulated depreciation and amortization (1,517,992) (1,421,939) Net property and equipment 281,492 370,240 Software and licenses, net of accumulated amortization 28,407 61,611 Deposits and other 72,630 141,123 $ 3,140,760 $ 4,283,015 LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities Accounts payable $ 42,149 $ 54,265 Accrued liabilities 604,103 1,570,623 Deferred income and deposits - - Borrowings under line of credit - - Notes payable 78,999 311,246 Total current liabilities 725,251 1,936,134 Notes payable 28,914 131,525 Due to shareowners - Shareowners' equity Common stock, no par value;1,000,000 shares authorized; 102,825 shares issued and outstanding 362,615 362,615 Additional paid -in capital 672,508 67%508 Notes receivable from shareowners (221,966) (88,688) Currency translation adjustments, net (96,705) 5,381 Retained earnings 1,670,143 1,263,540 Total shareowners' equity 2,386,595 2,215,356 $ 3,140,760 $ 4,283,015 See accompattylttg notes to carsolidated frt+attcini statements 4- HB -113- Item 5. - 68 CSG Consultants, Inc. Consolidated Statements of Income and Shareowners' Equity Yeah ended December M 2011 201D Revenue Staff augmentation $ 6,404,701 $ 5,574,807 Engineering 2,579,800 3,089,806 Building plan review 2,624,802 2,169,477 11,609,303 10,834,090 Costs and expenses, before depreciation and amortization Direct payroll and related benefits 5,2301168 4,993,809 Subcontract 187,852 135,046 Contract expenses rebilled 30,240 40,001 Indirect payroll and related benefits 3,655,390 3,176,769 Occupancy 382,515 356,387 Sales and marketing 52,018 44,630 Software development 172,685 174,478 General and administrative 1,125,113 1,137,288 Other income (11,098) (19,049) 10,824,893 10,039,359 Operating inconre before depreciation and amortization, and interest expense 784,4.2D 794,731 Depreciation and amortization (178,061) (277,048) Interest expense (10,586) (24,360) Income before income taxes 5951773 493,323 Provision for income taxes 9,600 27,000 Net income 586,173 466,323 Other comprehensive income (loss) Cun•ency translation adjustments - net (102,086) 14,043 Net comprehensive income 484,087 480,366 Shareowners' equity, beginning of year 2,215,356 2,651,995 Redemption of common stock, net of shareowner note receivable 8,516 (186,107) Distributions paid to shareowners (179,570) (740,022) Loans to shareholders (141,794) 9,124 Shareowners' equity, end of year $ 2,386,595 $ 2,215,356 Sec accvn)jw+yin8 notes to co►►solida►ed firmndnts►areraen►s -2- Item 5. - 69 HB -114- CSG Consultants, Inc. Consolidated Statements of Cash Flows Years ended December 31 2011 2010 Operating activities Net income $ 586,173 $ 466,323 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 133,496 277,048 Loss (gain) on asset dispositions 275 (3,497) Changes in assets and liabilities: Accounts receivable 75,216 (373,473) Unbilled accounts receivable 222,275 (105,333) Insurance claim receivable 531,250 (531,250) Prepaid expenses (23,488) (141,123) Deposits and other 68,493 (38,689) Accounts payable and accrued liabilities (978,636) 730,391 Deferred income and deposits - Net cash provided by operating activities 615,054 280,397 Investing activities Payments for property and equipment (28,819) (120,789) Proceeds front asset dispositions - 12,316 Payments for software and licenses 17,000 (20,842) Net cash used in investing activities (11,819) (129,315) Financing activities Repayments of borrowings under notes payable (334,858) (186,140) Loans made to shareowners (141,794) - Loan payments received from shareowners 8,516 92,334 Redemption of common stock - (269,317) Distributions paid to shareowners (179,570) (740,022) Net repayments of affiliate receivables - (12,035) Foreign currency translation, net (102,086) 14,043 Net cash used in financing activities (749,792) (1,101,137) Net decrease in cash (146,557) (950,055) Cash and equivalents at beginning of year 600,463 1,550,518 Cash and equivalents at end of year $ 453,906 $ 600,463 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 10,600 $ 24,400 Cash paid for income taxes $ 9,600 $ 27,000 Sec acronipanylag notes to consolidated fiumrdol statements M xB -115- Item 5. - 70 CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 1 Description of the Company CSG Consultants, Inc. (the Company) was incorporated in California in 2000. Under the name CSG Consultants, Inc., we provide building, engineering, community development and sustainability program support services to governmental agencies, located primarily in California. We build and foster partnerships with communities to create safe, vibrant living environments. CSG Consultants India Private Limited (India) was incorporated in India in 2006. India develops software solutions and information technology services in mechanical and electrical engineering, construction, and architecture. We develop software to archive and index building plans, facilitate collaborative digital plan review, generate permits, route and track plans in review, coordinate field inspection management, track code enforcement cases. Note 2 Summary of Significant Accounting Policies Basis of Presentation Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP). We have reclassified certain prior -year amounts to conform to the current -year's presentation. Certain notes to the financial statements include amounts rounded to the nearest thousand. Entities Included in Consolidated Financial Statements Our consolidated financial statements include the accounts of the Company and India. All significant intercompany profits, accounts, and transactions have been eliminated in the consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to snake estimates and assumptions that affect the repcwted amounts of assets and Iiabilities, disclosure of contingent assets and Iiabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenues Staff augmentation includes amounts billed for hourly fees -to provide building and engineering staff on a temporary or long-term basis. Revenue is recognized in the period service is provided and it is deemed probable that such amounts will be realized. Engineering includes fees earned under public works projects. Revenue is based on time and materials and may be subject to a maximum fee. Revenue is recognized in the period service is provided, and when it is deemed probable that such amounts have been earned and will be realized. Losses on specific projects are recognized upon their determination. Building plan review includes amounts billed under fixed and percentage fee arrangements. Revenue is recognized in the period service is provided and it is deemed probable that such amounts will be realized. "Income Statement Characterization of Reimbursements Received for Out-of-pocket Expenses Incurred" released by the Emerging Issues Task Force requires the Company to recognize as both revenues and expenses, in equal amounts, costs directly reimbursed from its engineering services. Accordingly, subcontract and contract expenses include reimbursements for payroll and related costs, and various other direct operating expenses. Decenaber 37, 2017 and 2070 - 4 - Item 5. - 71 HB -116- CSG Consultants, Inc. Notes to Consolidated Financial Statements Nate 2 Sumtnanj of SignificantAccounting Policies (contd.) Taxes on Income The Company has elected to be treated as an S corporation for federal and California tax purposes. Accordingly, all income, losses and tax credits are allocated to the shareholders and federal income tax expense or benefit is not recognized in the accompanying financial statements. California statutes conform to the federal S corporation rules, except for the imposition of a corporate level tax at the rate of 1.5 percent of taxable earnings with an annual minimum of $800. As discussed in note 5, Income Taxes, we recognize deferred income taxes for the differences between GAAP income and income that is currently taxable. We utilize a "more likely than not" criteria for evaluating uncertain tax benefits recognized in the financial statements resulting from tax positions taken or expected to be taken in the Company's tax returns. We believe the tax positions in our corporate tax returns are sustainable under an examination. There is no interest or, penalties for uncertain tax positions recognized in the Company's financial statements. Tax returns filed for calendar years 2007, 2008 and 2009 currently remain open to examination by taxing jurisdictions. Cash and Equivalents We consider cash and equivalents to include cash on hand, in banks and short term, highly liquid investments with original maturities of three months or less. Accounts Receivable Accounts receivable is recorded at the amount we expect to collect on balances outstanding. Our estimates consider the likelihood of collection and customers abilities to pay the amounts due. The allowance for doubtful accounts is $32,000 and $21,000 at December 31, 2011 and 2010, respectively. We wrote off approximately $66,000 as bad debts during 2011. There were no amounts written -off as bad debts during 2010. Property and Equipment Property, equipment and leasehold improvements are recorded at cost. Depreciation and amortization is provided using declining balance and straight-line methods for financial reporting purposes and the accelerated cost recovery method for income tax purposes. Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful Iife of the improvement using the straight-line method. Computer and operations equipment are depreciated using a declining balance method over estimated useful lives ranging from five to seven years. Furniture and fixtures are depreciated over an estimated useful life of ten years. Vehicles are depreciated over an estimated useful life of five years. Software and Licenses Software is recorded at cost and is amortized using the straight-line method for financial reporting and income tax purposes over an estimated useful life of three years. Research and Developineist Costs The Company incurs costs in the research and development of software. Costs are charged to expense as incurred. Approximate total research and development costs incurred in 2011 and 2010 were $190,000 and $188,000, respectively and are included in software development and depreciation and amortization. December 31, 2011 and 2010 - 5 - HB -117- Item 5. - 72 CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 3 Borrowings Under Line of Credit The Company has a $1 million revolving line of credit (includes letters of credit) under a Business Loan Agreement ("Revolver") with a bank. Interest is payable monthly at prime rate plus one percent (2.75% at December 31, 2011); the minimum interest rate is 5 percent The Agreement is secured by the general assets of the Company, contains financial covenants and matures on July 30, 2012, Note 4 Notes Payable Notes payable consist of the following: 2011 2010 $480,000 term Ioan, payable $17,071 per month, including interest at 5.0 % to January 2012, secured by general assets of the Company $ 33,854 $ 231,507 $92,566 note payable to former shareholder, payable $20,180 January 2010, remainder due and payable with accrued interest at 3.25% January 2011; secured by general assets of the Company - 42,566 Various automobile purchase loans, payable $5,200 per month including interest at rates ranging from .5% to 5.94% to February 2015, secured by automobiles 74,059 167,698 107,913 442,771 Less current maturities 78,,999 311,246 $ 131.52� The aggregate amounts of maturities for notes payable for the years following December 31, 2011 are: $79,000 in 2012; $19,000 in 2013; $8,000 in 2014; and $2,000 in 2015. Note 5 Income Taxes As discussed in note 2, California imposes a corporate level tax. Our tax returns are prepared on the cash basis of accounting. As a result, our financial statement income varies each year from the income on our tax returns. These differences are recognized in our financial statements as a deferred tax asset or liability. The most significant temporary differences between our financial statements and our tax return income are trade accounts receivable and accrued expenses. The provision for income taxes is composed of the following: 2011 Current income taxes payable $ 9,100 Deferred income tax liability 500 � 9.600 December 31, 2011 and 2070 2010 $ 800 26,200 L-2=1 -6- Item 5. - 73 xB -118- CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 6 Lease Cotntnitettents We conduct a portion of our operations on leased premises under operating leases. Lease agreements provide for minimum payments and reimbursements for common area expenses. Rental expense was $413,000 and $357,000 in 2011 and 2010, respectively. The aggregate noncancelable operating lease commitments for the years following December 31, 2011 are; $419,000 in 2012, $396,000 in 2013; $346,000 in 2014; $219,000 in 2015; $47,000 in 2016; and $214,000 thereafter. Note 7 Employee Retirement Plaits The Company sponsors a 401(k) defined contribution pension plan for substantially all of its employees. Matching contributions are discretionary. There were no matching contributions made in 2011 and 2010. Note 8 Related Parties During 2005 to 2010, we made several personal loans to a minority shareowner. The loans were consolidated in 2011. The new loan matures through May 2026 and bears interest at 2.76%. At December 31, 2011 the aggregate outstanding balance was $40,000. During 2006 to 2008 two company executives purchased minority interests of the Company's common stock. These transactions were financed through loans made by the Company. The terms of these loans were modified during 2011. Additionally, during 2011 we loaned the current principal shareowner approximately $140,000 to repay a loan to the former principal shareowner. The new loans mature through December 2026 and bear interest at 2.76%. The aggregate balance of the notes was $222,000 and $89,000 at December 31, 2011 and 2010, respectively. Note 9 Contingencies The Company is subject to various legal proceedings and claims, which arise in the ordinary course of its business. In the opinion of management, the ultimate liability with respect to those proceedings and claims will not materially affect the financial position, operations or liquidity of the Company. The Company maintains liability insurance coverage for individual claims in excess of various amounts, subject to annual aggregate limits. Note 10 Concentrattott of Credit Risk Financial instrwnents, which potentially subject the Company to concentration of credit risk, consist principally of cash and equivalents, and accounts receivable. 1'he Company's cash balance in an individual financial institution, at tines, may exceed federally insured limits. The Company has not experienced any losses on these deposits. At December 31, 2011, three customers represented 27 percent of outstanding accounts receivable. At December 31, 2010, three customers represented 25 percent of outstanding accounts receivable. For the year ended December 31, 2011, the three largest clients accounted for 12%, 11% and 7% of revenue, respectively. For the year ended December 31, 2010, the three largest clients accounted for 13%, 11% and 8% of revenue, respectively. Decetuber 31, 2011 rued 2010 - 7 - IIB -119- Item 5. - 74 CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 11 Shareowners' Buy Sell Agreement and Purchase of Decreased Shareowner's Stock The Company and its shareowners established an Amended and Restated Buy Sell Agreement (Agreement) dated November 2005 as amended January 2009. The surviving shareowners are obligated to purchase, in the event of death of any shareowner, all of the decedent's outstanding shares. The repurchase price is determined pursuant to a formula provided in the Agreement. The shareowners purchased insurance on the lives of two principal shareowners to help meet its obligation under the Agreement. In August 2011, the death of the principal shareowner triggered the buy/sell provisions of the Agreement. The Agreement specifies the date of death will serve as the purchase date of the decedent's outstanding shares. The provisions of the Agreement require the Company to purchase the shareowner's stock based on a formula provided in the Agreement, with a minimum payment equal to $4.6 million, the applicable Iife insurance proceeds. Based on the formula in the Agreement, the Company believes the shares will be purchased for the amount of the life insurance proceeds. The Company has tendered payment for the purchase of the deceased shareownei's outstanding shares and has triggered the dispute resolution provisions in the Agreement. Note 12 Settlement with Former Shareowner In April 2011 we settled a dispute with a former Company officer/shareowner in connection with our Amended and Restated Buy Sell Agreement and a claim for wrongful termination. The aggregate settlement was $975,000 (including $75,000 for plaintiff legal expenses). In addition, the Company discharged approximately $72,000 for an outstanding note related to the original grant of stock, and agreed to purchase a note receivable in the approximate amount of $25,000 from its majority shareowner, that was forgiven as part of the settlement. The Company received approximately $531,000 as insurance proceeds. Approximately $541,000 of the total settlement value was uninsured. We allocated the uninsured amount as follows; $269,000 to repurchase of 7,777 shares of the Company's common stock, $197,000 to settle all outstanding claims and $75,000 to plaintiff legal expenses. As a result, common stock and additional paid -in capital were reduced by approximately $27,000 and $242,000, respectively at December 2010. General and administrative expenses in 2010 include approximately $272,000 for one-time settlement expenses. Note 12 Subsequent Events The Company has evaluated events and transactions that have occurred after December 31, 2011 through March 31, 2012, the date on which the accompanying financial statements were available to be issued, and has determined there were no material events to disclose. Deccnrbcr31, 2011 and 2010 .8 - Item 5. - 75 HB -120- ATTACHMENT ' • HB -121- Item 5. - 76 INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. Requested by: Planning and Building 2, Date: 1123113 3. Name of contractor/permittee: CSC Consultants, Inc. 4. Description of work to be performed: Professional Plan Review Services S. Value and length of contract: $300,000 8/20/12 to 7/19/14 B. Waiver/modification request: $50000 SIR. on -Professional liability 7. Reason for request and why hy it should be granted: Unable to comply with r6guirements, see attached financials 8. Identify the riskgo the City in approving this waiver/modification: N/A Head Signature 1/2-3/13 Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrators Office is only required if Risk Management and the ACity Attorney's Office disagree. 1. Risk Management Approved Denied /-j V '7 12 Signature Date 2. City Attorney's Office Approved C7 Denied `-, . . ... . ......... Signature "Date 3. City Manager's Office 13 Approved 13 Denied Signature 'Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved',,, this form is to be filed with the Risk Management Division of Human Resources Item 5.--.77 -122- - - - - --- Nat'ver Form 1123/2013 9:08:00',AM I'f7lIWlnM17. wam p g�g g�`�p p p��p�w DATE (MMIDDiYYYYI CERTIFICATE OF LIABILITY N 66�dSLJdi6�ittn 12/07/2Ci'L INSURANCE 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 13Y 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. f; O N IMPORTANT: If the cettificato holder Is an ADDITIONAL INSURED, Ihs pollcy(les) must be endorsed, If SUBROGATION IS WAIVED, auhJoct to the terms and conditions Of the policy, certain Policies may require an endorsement. A statomeal on this certificate does not confer rights to the _ certlficate holder In lieu of such Bndorsement(s). PRODUcew 0726253 ]�415-546-9300 _ HA�tF,AC Hall Ttti:axetino �� � % Arthur J. Gallagher E Co. PNONE FAX n 7:nnusancs Brokers of California, Inc., Licgrrne 00,126293 AIC,No. Exf1: 415-53G•-BGi7 IIAIG No): 41.5-53678627 011e Market Plaza, SI"bar Tower EMAIL don„CaYanLf.nof3ajg,eam ADOftrgS: slits 200 t San Francisoa, CA 94105 fNSUR". )AFFORDINGCOVI;RAOF ; NAiC0 INOURERA: TRAVELERS PROP CAS CO OF AVER i25S7d 13ISi1R1`D 41SURL•R0: TWIN CITY FIRE INS CO CO 29459 CSG Conti::l.t;ant© xnc. Prevision Inspection - CSG INSURFRC: ARCH INS CO 11150 1700 S. Amphlett Blvd 3rd Floor INSURFRD: San vateo, CA 94402 lNSURBRff INSURER P • I COVERAGES i1r-9TIFi P.ATr- MI1MI1r.O• ses7e3aF nc.rl.1-, litlah"e— Ti-iis IS TO CL-ftrlFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOO INDICATED, NOTWITHSTANDING ANY REQUIREMIiNT• TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CIRTIFICATC MAY 81- ISSUED OR MAY PERTAIN, THE INSURANCE Aff-ORDIU BY THE POLICIES DESCRIBED IIFRFIN IS SUBJECT 10 ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE 0E.EN REDUCED BY PAID CLAIMS. INS";• TYPE OF INSURANCE !ADDLiSumi € POLICY EPf POLICY SXP LIMITS LFR : __ POLICY NUMBER `IMMIOWYYYYJ �Wma)ofYYYYI' A GENERALI•IABAnY EK I 680294MOR50-1XI,-12 12/04/1 12/04% 3 �Arl}t=URRfNCE �£1.00D,000 X; � 3 i 0A6AAGfS TO IiENTED COMMERCIAL GENERAL LIABILITY . ClAfMS•MADE X 'IOCCURi ? PREMISGS (En emvrorogt) 1, 000 000 $r I i MEDEXP(Anyonepars� $ 10,000 i f E j PERSONAL d AUV INJURY $1, 000, 000 !GENERAL AGGdtEGAIE $2, 000,000 GENt.AGO IIE13AIE LIMITAP(IK.IIis PE": PRODUCTS •COMPKIP AGG s 2, 000, 000 A A-TOMOINLELIABILITY X BA- G16i7G12-I.a -- i 4 1 1 1 COM0IN6DSfNGIJ?I.IT S 1, OOt3. DOD- X ANY AUTO j 1 etS—MI•� (Es acado BODILY INJURY (PUi Persen) . I S AUTOS' NFD j SCHEI)Uk@D iAUlUS DMLYINJURY (PnIWAARndl1 S X NON -OW: HIRED AUl•O5 : X i AUTOS tQCU i : (Ialuddo dJAMlWL I S A X UMBRELLA LIAU i X ;OCCUR CUP294Nl060-12 �r 12/0Q/a{ 04/i £ACItOCCUftKENCG j S 5,000,040 EXCESS L1A0 CLAIMS -MADE i AGGREGATE t s, aa0, aoa 0111) RETENTIONS ' I 'Following f7orm S B W010MRSCOMPENSATION AMC EMPLOYERS' Ll'ABILirY X I57WHBP4360-01 12/t14/1 12/04/13 X; WC"A7U• OT}i• TORY LIMITS i 6R YIN ANY PROPRIETQRIPARTNFJtlt)fECUfEVE L•It OFFICUEMBEREXCLUDEDt MIA I E.L. EACH ACCIDENT .... S 1,000,000 (AbrOitiory In NH) ` 9myaedesultwwWCV i i.I-.UtSEASE•EAEMPfOYL $1,000,OaO DFSCRIPTIONOFOPEMTQNS UeWw E.L. DISEASE -POLICY Li MIT #####'S 1, 000, 000 C :Prof Liability ARP 004731501 1210411 12/U4/13 Limitr 31di1/3Ni Retention 50,000 OBSCRIPTIONOFOPERATIONS M-OCATIONSIVEIUCIES(AtfaahACORD10t,AddltlanalRamwkaSohadula,Ifmorewfnc Israquirad) blanket Work Coate waiver of subrogation applies, All operations of the Named Insured, the City of ItuntingLou Beach, its officers, elected or appointed officials, 011>blareas, agents and volunteers are additional insured per attached endorsement farm, CO D3 82I 09 07- Additional Insured (Architects, Engineers, and Surveyors), Primary insurance endOrsemeril: form CG DO 37 04 06. The City of Huntington 8940h, its officers, elected or appointed officials, em loyaos, agents and Volunteers are additional insured with respect to Auto Liability per Auto Coverage Plus Indorsement form CA F0 82 12 07. ty of HuntingLon Beach Attnz Risk Nauagemant 2000 Hain Street ington Beach, CA 92640 MOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION GATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, AUTHORIZED REPRE9ENYAriVE USA 9)1088-2010 ACORD CORPORATION, All r)ahts reserved_ ACORD, 26 (2010f0S) The ACORD name and logo are registered marks of ACORD amiahosan 3057433S HB -123- Item 5. - 78 POLICY NUMBER: 680-294HO850-TIL-12 COMMERCIAL GENERAL LIABILITY ISSUE MATE: 10-25-12 THIS ENDORSEMENT CHANCES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL IN (ARCHITECTS, ENGINEERS AND SURVEYORS) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PANT SCHEDULE NAME OF PERSON(S) OR ORGANIZATION(S): PER SCHEDULE ON PILE WITH AGENT PROJECTILOCATION OF COVERED OPERATIONS: PROVISIONS A. The following is added to WHO IS AN INSURED (Section II): The person or organization shown in the Sched- ule above is an additional insured on this Cover- age Part, but only with respect to liability for "bod- ily injury" "property damage" or "personal Injury" caused, in whole or In pail, by your acts or omis- sions or the acts or omissions of those acting on your behalf: a. In the performance of your ongoing opera - bons; b. In connection with premises owned by or rented to you; or c, In connection with "your work" and included wlthin the "products -completed operations hazard". Such person or organization does not qualify as an additional insured for "bodily injury", °property damage" or "personal injury" for which that per- son or organization has assumed liability in a con- tract or agreement. The insurance provided to such additional insured is limited as follows: d. This insurance does not apply to the render- ing of or failure to render any "professional services". a. The limits of insurance afforded to the addi- tional insured shall be the limits which you agreed in that "contract or agreement requir- ing insurance" to provide for that additional insured, or the limits shown in the Declara- tions for this Coverage Part. whichever are less. This endorsement does not Increase the limits of insurance stated in the LIMITS OF INSURANCE (Section Ill) for this Coverage Part. B. The following is added to Paragraph a. of 4. Other Insurance In COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): However, If you specifically agree in a "contract or agreement requiring Insurance" that, for the addi- tional insured shown in the Schedule, the insur- ance provided to that additional insured under this CG D3 82 09 07 0 2007 The Travelers Companies, Inc. Page 1 of 2 Includes the copyrighted malarial of Insurance Services Office, Inc., with its pennlmlon o� M Item 5. - 79 HB -124- NN.wI]Mol COMMERCIAL GENERAL LIABILITY Coverage part must apply on a prunary basis, or a primary and non-contributory basis, this insur- ance is primary to other insurance that is avail- able to such additional insured which covers such additional insured as a named insured, and we will trot share with the other insurance, provided that: (t) The "bodily Injury" or "property damage" for which coverage is sought occurs; and 12) The "personal injury" for which coverage is sought arises out of an offense committed; after you have entered Into that "contract or agreement requiring insurance" for such addi- tional insured. But this insurance still is excess over valid and collecfibla other Insurance, whether primary, excess, contingent or on any other basis, that is available to the additional in- sured when the additional insured is also an addi- tional insured under any other insurance. C. The; following is added to Paragraph 8. Transfer Of Rights Of Recovery Against Others To Us in COMMERCIAL GENERAL LIABILITY CON.- DITIOklS (Section IV); We waive any rights of recovery we may have against the additional insured shown in the Schedule above because of payments we make for "bodily Injury" "property darnage" or -personal injury" arising out of "your work" on or for the pro- ject, or at the location, shown in the Schedule above, performed by you, or on your behalf, un- der a "contract or agreement requiring insurance" with that additional insured. We waive these rights only where you have agreed to do so as part of the "contract or agreement requiring insur- ance" with that additional insured entered into by you before, and in effect when, the "bodily injury" or "property damage" occurs, or the 'Personal In- jury" offense is committed. D. The following definition is added to DEFINITIONS (section V); "Contract or agreement requiring insurance" means that part of any contract or agreement un- der which you are required to include the person or organization shown in the Schedule as an ad- ditional insured on this Coverage Part, provided that the "bodily injury" and "property damage" oc- curs, and the "personal injury" is caused by an of- fense committed: a. After you have entered into that contract or agreement; b. While that part of the contract or agreement is in effect; and c. Before the end of the policy period. Page 2 of 2 02007 The Travelers Contpanles. Inc. Includes the aopygghted material of Insurance Services Office, Inc., w#th its pernllsslon CG D3 82 09 07 HB -125- Item 5. - 80 t•.ur�izna,l COMMERCIAL GENERAL LIA811.17•Y THIS EIVDORB1~MENT CHANGIWS T E POLICY, PLI:W31E RE-:A631T+ CAREFULL,V, OTHER INSURANCE — ADDITIONAL INSURED$ TWs andorsarnout modlllos Insuranoo provided under the falloWincd; COMMERCIAL GENEIRAL I.1A811.ITY COVERAGE PART PROVISIONS COMMERCIAL OFNER4 LIAE3ll.ITY CONDITIONS (@eutt n IV), Nwro raph 4. (Diltur Irtauranrej, is amended as follows: �. The tollowl 19 fs oddod to Paragraph a, primary Insurance. However, If you opocfft ally agree In a vifttten roll• tracl or wrlttel) 09rWmenl that the fnsuranca pro- Aded to an addltfonai fnaurod under this GovemP Pat must afsply on a prlmery basle, or e primary and non-contrlblltory balls, fills 11,8111,- anc4 is primary to other Insurance thaf Is 441- able to such additional Insured Which wears such aditoual Insured as a named insured, and we will not share Win that Other fnsul-ence, provided that. a. The "badfly Injury° or °prpperly damage" for which coverage is sought ctrcura, and b, The "parr oval injury" or °advadiahig injury" for which covoInge Is st»Ighl wises actt of nn nf•• fanse comlrnlitod subae(Iuenf to the e19nlng Ord execution of that cruitract x agreomenl by you, 2. Tho first t9tibparaEp-aph (2) of Paragraph b, rcx• cosy Insuranco I%Drding uny oihor prlmnry In- surance available to you Is dtalr0ed. . 3. 1118 fclloWing la oddod to i arngreph Er. EX0004 Itlsura VOe, as an additional subparagraph under Subparagraph (1), That la avaliable is file I"Eumd when IN fnaurod Is added as an addltional.Insurnd under any olhor Wicyr InNudlrxf any umbrella or excass policy, CG ©O 37 04 05 Copydpht 2006 Thu St. Paul Travelots Gampeniaa, Inc. All rights rsserved, Page 1 of I Item 5. - 81 xB -126- I'f NA02J9.0 fa. n W Q V' TWS ENDORSEMENT CHMOES THE POLICY. PLEASE READ IT CAREFULLY. O 'CORKERS' COMPENSAi ON BROAD FORM ENDORSEMENT ENDED OPTIONS t- P OW NuMbon. 57 WS SP 4360 Endaraermont Naml*rt M tffec4iv [late: 12 / 0 a lit Effectnre hour Is via some as stated on the Information Page of the policy, d koured and Aftem: eso commTAws xNc 1700 S ,t►MPHr,,2xm BLVrl situ FL ri Cb SAM MATBO, CA 94402 +,n M vif Section I of this endorsement expands coverage provided under WC 00 00 00. Section II of this endorsement pravIdas additional coverage uauaily only provided by endorsement. o Section 19 of this ondorsemani Is a Schedule of Covered States. a You may use the index to locate these ooverage features quickly: k -- _ sulm 4 ow no SECT" F 2 B. Part Ono Does Not Apply a om PARTS ONE NW TWO 2 C. Application of Coverage 3 know 01 We Will Also Pay 2 D. AddiOonal Excluslansseam 3 PART -THREE 2 E. West Vlrgi tlu B 02 Flow This Insurance Works 2 lwKMDED OPTIONS 4 PART- SIX 2 01 Employers' Liat)lity insurance 4 WIN 03 transfer of Your Rights and Duties 2 02 Unintentbnaf Failure to Oisdose 4 04 Lborallzation 2 Hazards 9W SECiM W 2 03 Waiver of Our FTlght to Recover from 4 sm VOLUNTARY d:TDUPEPf8ATIUN iNSURAmCiw 2 Others am — Oa Voluntary Gampenastion Insurance 04 Foreign Voluntary Compensation 4 A. Now This Insurance Applies 2 A. How This Reimbursement Applies 4 am B. We WM Pay 2 B. We WWI Reimburse 4 MW C. Exduslons 3 C. Exctuslons 4 0. Before We Pay 3 D. Before We Pay 5 E. Reoovery From Others 3 E. Recovery From Others S � F. Employers' Liability Insurance 9 F. FieEmbursemant For Actual Loss 5 EMPLOYERS' UA111111 Y SW t; P 3 Sustained 6 too"Q. ENDORSEMENT _ B ER m0 p re Liability Stop Gap H. Endemio Disease 5 JIM Coverage 3 05 Longshore and Harbor Workers' S AStop Gap Coverage Limited to Compensation Act Coverage Montana, North Dakota, Ohio, S dorsemen# WasWngtorr, West Virpinia and SEC�ONIII 6 111101 ftoming 0f Sshadde of Covered States 6 Form WC 9$ 03 03 B Printed In I.S.A. (Ed. 8100) Pap I e8 S Prone Fiat : 10/09/12 Polity Expiration Date. 12/04/13 200D, The Hartford xB -127- Item 5. - 82 rsarek�zwwz t~ SECTION t PARTS ONE and YWO 1. WE WILL. AI..SO PAY 0, W Will Also Pay of Fart Lino (WORITAS' COMPENSATION INSURANCE); and I- We Will Also Pay of Part Two (EMPLOYERS' LIABILITY INSURANCE) Is replaced by the fatlawing; We Will Also Pay We will also pay these costs, In addition to other amounts payable under this Insurance, as part of arty claim, proceeding, or suit we defend, 1. reasonable expenses Incurred at our request, INCLUDING loss of earnings; 2. premiums for bonds io release attachrrtants and for appeal bonds In bond amounts up to the limit of our liability under this Insurance; 3, lltlgallon costs taxed against you; 4. Interest on a Judgment as required by law until we offer the amount due under this law; and 5. expenses we incur. PART THREE 2. Now This Insumce Applies Paragraph 4. of A. tittw This Insuraae; A,ppli a of Part 3 (Other States Insurance) Is replaced by the following: 4. If you have work on the affective date of this policy In any state not listed In horn 3.A, of the Information Page, coverage will not be afforded for that state unless we are notified within sixty days. a. 4. SECTION ii VOLUNTARY COMPEN&A77ON AND EMPLOYERS' LIABILITY COVERAOR S. VoiLmtery Cwnpartesllosr Insurance A. H w'tlhls tnsurawn Applies This Insurance apples to bodly Injury by accident or bodily injury by disease. Bodily Injury Includes resulting death. 1. The bodily injury must be sustained by any officer or employee not subled to the workers' compensation law of any state shown In Item 3.A. of the Information Page. 2. The bodily Injury must artse out of and In the course of employment or incfdenfaf to work In a state shown In Item B.A. of the Intomratfon Page. t=OM WC 99 03 03 S Printed In U.S.A. (Ed. WD) PART SIX Translsr Of Your Nights and Duties C. 7lrenater Of Your Flights and Dulles of Pad 6 (Conditions) is replaced by the following; Your rights or duties under this policy may not be transferred without our written consent. If you die and we receive notice within sixty days after your death, we will cover your legal representative as Insured. l.Iberafizatbp If we adopt a change In this form that would broaden the coverage of this form without extra charge, the broader coverage will apply to this policy. It will apply when the change becomes effective in your state. S. The bodily injury must occur In the united States of America, its territories or possessions, or Canada, and may occur elsewhere if the employee Is a United States or Canadian ollzen, or othaiwise legal resident, and legally employed, in the United States or Canada and temporarily away from those places. 4. Sooty Injury by accident must occur during the policy period. 5. Bodily Injury by disease, must be caused or aggravated by the conditions of the (rage 2 It # D v o, y' Z 13.1 LA Item 5. - 83 xB -128- y:sz„u,zwaa officer's or employees employment. The If the persons an8tlad to the benefits of this of loar's or .employee's last day of last Insurance make a recovery from others, they o exposura to the condtAons causing or must reimburse us for the benefits we paid aggravating such bcctlly Injury by disease them, must occur during the policy peifad. F. Employow L.lat►t q Insurance B. W WIN Pay Part Two (Employers' Liability Insurance) <r We will pay an amount equal to the benefits applies to bodily Injury covered by this u that would be required of you as If you and endorsement as though the State of your employeas were subject to the workers' Employment was shown In Item 3.A. of the Compensation law of any slate shown in Item Intonnation Page. ao S.A. of the Information Page. We will pay This provision S. does not apply In Now Jersey or those amounts to the persons who would be Wisconsin, Cl entitled to them under the law. EMPLOYERS' LIABIL" STOP GAP COVERAG9 C. Exckolo" 6. E npfoyere' I,kabll V Stop' (dap Covarsg This Insurance does not cover. A. This coverage only applies In Montana, forth a 1. any obligation Imposed by workers' Dakota, Ohio, Washington, West Virginia and compansallon or occupational disease law Wyoming 0 `" or any similar law. B. Pact One ({Workers' Compensation Insurance} 2. bodily Injury intatrtionally caused or does not apply to work In states shown In rq aggravated by you.Paragraph A above. a S. officers or err�sfoyees who have elected C. fart Two (EmployaW M&WIlly insurance) nol to be subject to the state Workers' applies In the states, shmm In Paragraph of a oompansatlon law. S.A. of they as though they were shown In item 3 4. partners of sole proprfators not covered information Rage. am under the Standard We Proprfelors, p, part Two, Section C. fF,ttclotefonm Is changed Partners, Officers and Others CoveragesNo by adding these exclusions. MW Endorsomment. This Insurance does not cover; D. I3e0o Wa Pay 5. bodily Injury Intentlonafty caused or Before we pay benellis to the persons entitled aggravated by you or in Ohio bodily Injury to them, they must, resulting from an act which Is determined 1. Relesse you and us, In writing, of all by an Ohio court of law to have been responsiblilry for the Injury or death. committed by you with the belief than an ago= 2. Transfer to us their righl to recover from Injury Is subslanually certain to cc -our. others who tray be responsible for the However, the cost of defending such Injury or death. claims or suits In Ofilo Is covered. S. Cooperate with us and do everything 13, bodily injury sustained by any member of necessary to enable us to enforce the right the ffying crew of any alroratt. t to recover from others. 14. any claim for bodily Injury with respect to tf the persons anHped to the benefits of this which you are deprived of any defense or XM Insurance fall to do those things, our duty to defenses or are otherwise subject to I pay ends at once. K they claim damages from penalty because of default In premium you or from us for the Injury or oath, our duty under the provislons of the workers' AWAM MM to pay ends at once, compensation taw or taws of a state snowno shown in Paragraph A. E. Recovery From Othre E• 'this Insurance applies to damages for which am tP we make a recove from others, we w€It ry you are liable under West Virginia Code Annot. am keep an amount equal to our expenses of & 23-a e recovery and the benefits we paid. We will an pay the balance to the persons entitled to It. Forth WC Of os 03 0 Printed In U.S.A. (Ed. 8W) p3 01B HB -129- Item 5. - 84 S!StWUZBtipZ N EXTENDED OPTIONS I. Empf y4ws' Lfablffty k aut sa 11W 3.8, of the Worratati n Page Is replaced by file fatiowtng; 0. FAV10YOW Wbutty humautc e: 1. Part Two of file policy rspplfes to worm 11) each elate hated In Item 3.A, The Units of Liability under Part Two are the hlgterof- soft injury by Aockient $500,0ft0 0wh Ac cIdad socilly thjt'y by Diaeaae *M'000 Poky um" Bodily injury 1by Disease 00 Each o ►Les OR 2. The amount shown in the Information Page. This provision t of EXTENDED 01411710NS does not apply In Now Ycrlc because the Limits of our l.iabhkty are unlimited, In this provision the limits are clanged from ;$11411AM to $1'W0'000 In California. 2. Vnhd renal Falb to 01w1oeo Hazards # you unintentionally should fall to disclose all existing hazards at the inception date of your poficy, are shall not deny ooverage under this Policy because of such fallurs, 3. Waiver of Our At m To Recover From olhere A. We have the right to recover our payments from anyone Ilable for an lnjury covered by this paficy. We will not anfores our right agalnsf any person or orpnizaton for whom you perform work under a written contract that requires you to obtain this agreement from us. This agreement shag not operate directly or Indirectly to benefit anyone not named In the agreement B. this prevision a. does not apply in the slates of Pennsylvania and Utah. Farah WC 90 Oft 03 0 Feinted In U.B.A (Ed. SM) 4, Foreign Vokintary Coraper widen and Ernptoyora' f.labiifty Relmbureement A. How This RaImbursement Applies This reimbursement provision eppflas to bodily Injury by accident or bodily Injury by disease. f3oci4y Ir4ury includes resulting death. t. The bodily Injury must be sustained by an ofik:er or employee. 2. The bodily injury must occur in the course of employment necessary or Incidental to work In a country not listed In Exclusion CA. of this provision. 3, Mdlly Injury by accident must coact during the policy period. 4. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The officer or employee's last exposure to those conditions of your employment must occur during the policy period. 0. We WM Rahabretra We will reimburse you for all amounts prttd by you whether such amounts are: t, voluntary payments for the benefits that would be required of you tf you and your officers or employees ware subject to any workers' compensation law of the state of Mrs of the Inclvlduai employee. 2. sums to which Port Two (Employers' Liabillty bnsurerwe) would apply B the Country of Employment ware shown In Item 3.A. of the Information Page. C. Exaluakxu This Insurance does not oovv.. t. any occurrences in the united States. Canada, and any country or jurisdiction owhlch Is the subject of trade or aaonomia saru;tions Imposed by tlra laws or regulations of the united States of America in effect as of the inception data Of fhts policy. 2, any obligation Imposed by a workers' compensation or oocupational dsease taw, or similar law. S. bogs injury Intentionally caused or aggravated by you. PAV 4 ®t d Q V: Item 5. - 85 HB -130- Ni3- wp)1 4. liability for any consequence, whether direct or Indirect, of war, Invasion, act of Foreign enemy, hostilities (whether war be declared or not), civil war, rebellion, fevoluum, Insurreafion or military or usurped power. No endorsement now or subsoquantfy attached to this policy shall be construed as overriding or waiving this limitation unless specific reference to made thereto. 0. 8efM We pray Mora we reimburse you for the benefits to tha persons entitled to them, you trust have them: t. release you and us, in writing, of all responsiblilly for the Injury or death, P. transfer to us their right to recover from 0 others who may be responsible for their Injury or death, 3, cooperate with us and do everything necessary to enable us to enforce the right LA to recover from Others. A n It tM persons untitled to the benefits paid fail �+ to do these things, our duty to reimburse ends at ono®. If they claim damages from us for the Injury or death, our duty to reimburse ands at low once. tam Tigcavery Frain Others it we make a recovery from others, we will am keep an amount equal to our expenses of recovery and the beneflts we reimbursed. We will pay the balance to the persons entitled to rem OEM It. If persons ontltied to the benefits make a ,. we recovery from others, they must repay us for MW MMM the amounts that we have reimbursed you. go F. A knfwrsement for Actual Lose Sustained This endorsement provides only for reimbursement for the lost you actually Dodo rr sustain. in order for you to recover loss or am expenses under this reimbursement you must; 1. actually sustain and pay the loss or t expanse In money after Idaf, or P, secure our consent for the payment of the loss or expense. MIN {s. IRepattiratlon Our reimbursement Includes the additional WM expenses of repatriation to the United States Fom WC ell tab 08 61 Printed In U.S.A. (Ed. M) of America necessarily incurred as a direct result of borilly Injury. Our reimbursement shall be limited as follows; t . to the amount by which such expenses exceed the rlormaf cost of returning the officar or employee if in good hrsakla, ar 2. In the event of death, to the amount by w which such expenses exoead the normal cost of returning the off lcar or employee If alive and In {food health. ht no event shall our reimbursement exceed the bodily Injury by accident limit shown In Item 3B. of the Information Page as respects any one such officer or employee whether dead or alive, H. Endemic Disease The word "dlasass" includes any endemic diseases. The coverage applies as If endemic diseases were Included in the provisions of the workers' compensation law. S. f.angshore and Hw wr Workers' Comperwall a Act Coverage ( smml Set< m C. Workers' Camperuratl n I.mw is replaced by the following: C. WotkeW Compmealloh Law Workers' Compensation Lave means the workers or workers' compensatlori law and occupational disease law of each state or territory named in Item M. of trio Information Pape and the longshore and Harbor Workers' Compensation Act (33 USG Sectlons 901- 954). It Includes any amendments to those laws that are In effscl during the policy period. It does not include any other federal workers or workers' cnmpensatlon law, other federal occttpattonat disease law or the provislons of any law that provide nonoceupallonal dlsabillty benefits. Fart Two (Employare' Uablitty Insurance), C. Exclusions, exclusion 8, dogs not apply to work subject to the Longshora and Harbor Workers' Compensation Act. Ibis coverage does not apply to work subject to the Datense Bass Act, the Outer Continental Shelf Lands Act, or the htonoppropriated Fund fnstrumentalittes Act. Pag 6 16 xB -131 _ Item 5. - 86 F.Sk:F>t2Mr;tQ n SECTION III 1. SGHEOULE OF COVERED STATES R This andorsainent only applies !n the states fisted in this Schedule of Covered States, C. Schedule of Covered Stales: CA B. If a state, shown In item S.A. of the Information Page, approves this andorsament attar the effective date of This policy, this endorsement will apply to this policy. The coverage wiff apply In the now state on the effective data of the slate approval. Countersignad by -- Authorized Representative i1: m WC 99 03 03 0 Printed In USA. (Ed. 80) Papa of S Item 5. - 87 HB -132- 1WW>'17"w2 COMMERCIAL AUTO THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY, o AUTO COVERAGE G PLUS ENDORSEMENT V' This endorsement modifies htsurance frrovided under the following: w BUSINESS AUTO COVERAGE FORM With I>?spect 10 coverage provided by this endorsement, Ilia provisions of the Coverage Form apply unless rnodt- fted by the endorsernant. GENERAL DESCRIPTION OF COVERAGE — This endorsement broadens coverage, However, coverage for any Injury, damage or medical expenses described In any of Ilia provisions of this endorsement may be excluded or limlled by another endorsement to the Coverage fart, and these coverage broadening provisions do not apply to the extent that coverage Is excluded or limited by such an endorsement. The following listing Is a general cover- age description only. Limitations and exclusions may apply to these coverages. Read all the provisions of this an- dorsernent and the rest of your policy carefully to determine rights, duties, and what is and is not covered, A. BLANKET ADDITIONAL INSURED H. AUDIO, VISUAL AND DATA ELECTRONIC B. EMPLOYEE HIRED AUTO EQUIPMENT — INCREASED LIMIT C. EMPLOYEES AS INSURED 1. WAIVER OF DEDUCTIBLE — GLASS D. SUPPLEMENTARY PAYMENTS — INCREASED J. PERSONAL EFFECTS i LIMITS K. AIRBAGS E. TRAILERS -INCREASED LOAD CAPACITY L. AUTO LOAN LEASE GAP F. HIRED AUTO PHYSICAL DAMAGE M. BLANKET WAIVER OF SUBROGATION G. PHYSICAL DAMAGE — TRANSPORTATION EXPENSES — INCREASED LIMIT A. BLANKET ADDITIONAL INSURED The following Is added to Paragraph A.t ., Who Is An Insured, of SECTION 11 -, LIABILITY COV- ERAGE: Any person or organization who is required under a written contract or agreement between you and that parson or organization, that is signed and executed by you before the "bodily Injuty" or "property damage" occurs and that is in effect during the policy period, to be named as an addi- tional insured Is an "insured" for Liability Cover- age, but only for damages to which this Insurance applies and only to the extent that parson or or- ganization qualities as an "insured" under the Who Is An Insured provision contained in Section ll. B. EMPLOYEE HIRER AUTO tt. The following is added to Paragraph A.1., Who Is An Insured, of SEC71ON 0 — LI- ABILITY COVERAGE; An "employee" of yours Is an "insured" while operating a covered "auto" hired or rented under a contract or agreement in that "em- ptoyee'e name, wish your permission, while porforaling duPros related to tlx+ Conduct of your business. 2. The following replaces Paragraph b. in 8.5., Other Insurance, of SECTION IV — BUSI- NESS AUTO CONDITIONS: b. For Hired Auto Physical Damage Cover- age, the following are deemed to be cov- ered "autos" you own: (1) Any covered "auto" you loase, dire, rent or borrow; and (2) Any oovered "auto" hired or rented by your "employee" under a contract In that individual "employee's" name, with your permission, while perform- Ing duties related to the oonduot of your business. However, any "aulo" that Is leased, hired, rented or borrowed with a driver is not a covered "auto C. EMPLOYEES AS INSURED The following Is added to Paragraph A.1., Who Is An Insured, of SECTEON 11 — LIABILITY COV- ERAGE: CA T4 20 0710 0 2010 The Travalers Indamrtlty company, All rights teserved. Page 4 of 3 Includes eopyrl0hred material of Insurance Services Office. Inc, wits► its permission. HB -133- Item 5. - 88 e132(ey wxu COMMERCIAL AUTO Any "employee" of yours Is an 'insured" white us- ing a covered "auto" you donl own, hire or borrow in your business or your personal affairs, D. SUPPLEMENTARY PAYMENTS INCREASED LIMITS I. The fallowing replaces Paragraph A.2.a.(2) of SECTION tl — LIABILITY COVERAGE: (2) Up to $3,000 for cost of bail bonds (in- ctuding bonds for related traffic law vlola- (ions) required because of an "accident" we cover. We do not have to furnish these bonds. 2. -rhe following replaces Paragraph A.2.a.(4) of SECTION if — LIABILITY COVERAGE: (4) All reasonable expenses Incurred by the "insured" at our request, including actual loss of earnings up to $500 a day be- cause of time off from work. E. TRAILERS — INCREASED LOAD CAPACITY - The following replaces Paragraph C.I. of SEC. TION 1— COVERED AUTOS: 1. "Trailers" wNh a load capacity of 3,000 pounds or less designed primarily for travel on public roads. F. HIRED AUTO PHYSICAL DAMAGE The following Is added to Paragraph A.A., Cover- age Extensions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Hired Auto Physical Damage Coverage It hired "autos" are covered "autos" for Liability Coverage but not covered "autos° for Physical Damage Coverage, and this potlCy also provides Physical Damage Coverage for an owned "auto", then the Physical Damage Coverage Is extended to "autos" [hat you hire, rent or borrow subject to the following: (1) The most we will pay for "loss" in any one "accident" to a hired, rented or borrowed "auto" is the lesser of: (a) $50,000; (b) The actual cash value of the damaged or, stolen property as of the time of the "loss"; or (c) The cost of repairing or replacing the damaged or stolen property with other property of like find and quality. (2) An adjustment for depreciation and physical condition will be made In determining actual cash value in the event of a total 'joss". Page 2 of 3 (3) If a repair or replacement results In better than like kind or quality, we will not pay for the amount of betterment, (4) A deductible equal to the highest Physical Damage deductible applicabie to any owned covered °auto". (5) This Coverage Extension does not apply to: (a) Any "auto" that is hired, rented or bor.. rowed with a driver, or (b) Any "auto" that Is hired, recited or bor- rowed from your "employee". G. PHYSICAL DAMAGE — TRANSPORTATION EXPENSES -- INCREASED LIMIT The following replaces the first sentence in Para- graph AA.a., Transportation Expenses, of SECTION III — PHYSICAL DAMAGE COVER. AGE: We will pay up to $50 per day to a maximurn of $1,500 for temporary transportation expense In- curred by you because of the total theft of a cov. ered "auto" of the private passenger type. H. AUDIO, VISUAL AND DATA ELECTRONIC EQUIPMENT — INCREASED LIMIT Paragraph C.2.. Limit Of Insurance, of SEC- TION III — PHYSICAL DAMAGE COVERAGE Is deleted. 1. WAIVER OF DEDUCTIBLE — GLASS The following Is added to Paragraph D., Deductl- ble, of SECTION III -- PHYSICAL DAMAGE COVERAGE: No deductible for a covered "auto" will apply to glass damage If the glass is repaired rather than replaced. J. PERSONAL EFFECTS The following is added to Paragraph AA., Cover- age Extensions, of SECTION Ili — PHYSICAL DAMAGE COVERAGE: Personal Effects Coverage We will pay up to $400 for "loss" to wearing ap• parel and other personal effects which are: (1) Owned by an `insured"; and (2) In or on your coved "auto". This coverage only applies in the event of a total theft of your covered "auto". No deductibles apply to Personal Effects covef- age, ® 2010 The Travelers Indemnity Company, AU tlghtsreservad. Inellwas copyrighted material v} Inssirance Servfoer, Off ct, Inc, with tie pare laslon, CA T4 20 0710 Item 5. - 89 HB -134- 001040 K. AIRBAGS The following Is added to Paragraph 8.3., Exclu- sions, Of SECTION III — PHYSICAL DAMAGE COVERAGE: Exclusion 3.a. does not apply to "+ass" to on® or more aifbags In a covered "Hula" you avert that In. date due to a cause other than a cause of "loss" set forth In Paragraphs A.f.b. and A.9.c., but only: a. If that ^auto,, is a covered "auto" for compre- WSlve Coverage under this policy; b. The alrtiagS are not Covered under any war- ranty; and c. The airbags were Wt Pitentlonatly inflated. We will pay 1!p to a maximum of $1,000 for any one "loss". L, AUTO LOAM L.EASFE GAP The following Is added to Paragraph AA., Cover- age Extensions, of SECTION III » PHYSICAL DAMAGE COVERAGE: Auto Loan Lease Gap Coverage for Private Passenger Type Vehicles In the event of a total "loss" to a covered "auto" of the private passenger type shown in the Schedule or Declarations for which Physical Damage Cov- erage is provided, we will pay any unpaid amount due on the lease or loan for such covered "auto" IeSS tl)e following. (1) The amount paid under the Physical Damage Coverage Sectlon of the policy for Thal "auto"; and COMMERCIAL AUTO 42) Any: (a) Overdue lease or loan payments at the time of the "Joss"; (b) Financial penalties Imposed under a lease for excessive use, abnormal wear and leer or high mileage; (c) Securily deposits not returned by the les- sor; (d) Costs for extended warranties, Credit Life Insurance, Health, Accident or Disability Insurance purchased will) the loam or lease; and ($) Carryover balances from previous loans orleases. M. BLANKET WAIVER OF 1510BROGATION The following replaces Paragraph AX., Transfer Of Rights Of Recovery Against Others TO Us, of SECTION IV — BUSINESS AUTO CONDI- TIONS: S. Transfer Of Nights Of Recovery Against Others To Us We valve any right of recovery we may have against any person or organization to the ex- tent required of you by a when contract exe- ruled prior to any "accident" or 'loss", pro- vided that the "accident" or "loss" arises out of the operations contemplated by such con iraci, "The waiver applies only to the person or organization designated in such contract. CA T4 20 $i 10 6 2010 The Travelers indemWly Company. Al rights reserved. kxdudss copyrdWilod material of Amuance Services Office, Inc. with b permission. Page 3 of 3 HB-135-135- Item 5. - 90 II.M'd mumIe , DATE SUPPLEMENT TO CERTIFICATE OF INSURANCE 12/0'7,2012 NAME OF INSURED: COG Consultants Inc. Precision Ynapeotion - COG Addl3ional Doscripfion at t7pta:t3tionsll�c�sparks ►rQM Page 1: Additional Inlo 'nalion; GYl O 00 EA Item 5. - 91 HB -136- CSG CONSULTANTS, INC. CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2012 and DECEMBER 31, 2011 HB -137- Item 5. - 92 CSG Consultants, Inc. Consolidated Balance Sheets September 30 December 39 2012 2011 ASSETS Current assets Cash and equivalents $ 413,376 $ 453,906 Accounts receivable, net of allowance for doubtful accounts 2,429,819 2,010,259 Unbilled accounLs receivable 36,168 4,600 Prepaid expenses 163,172 289,466 Total current assets 3,042,535 2,758,231 Property and equipment Computer and operations equipment 598,229 577,199 Furniture and fixtures 460,878 447,790 Vehicles 851,471 756,945 Leasehold improvements 17,550 17,550 1,928,128 1,799,484 Less: accumulated depreciation and amortization (1,593,015) (1,517,992) Net property and equipment 335,113 281,492 Software and licenses, net of accumulated amortization 26,165 28,407 Deposits and other 34,289 33,091 $ 3,438,102 $ 3,101,21 LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities Accounts payable $ 117,701 $ 42,149 Accrued liabilities 847,095 604,103 Deferred income and deposits 108,163 - Borrowings under line of credit 150,000 - Notes a able 24,294 78,999 Total current liabilities 1,247,253 725,251 Notes payable 12,466 28,914 Shareowners' equity Common stock, no par value;1,000,000 shares authorized; 102,825 shares issued and outstanding 362,615 362,615 Additional paid -in capital 672,508 672,508 Notes receivable from shareowners (276,743) (261,505) Currency translation adjustments, net (189,746) (96,705) Detained earnings 1,609,749 1,670,143 Total shareowners' equity 2,178,383 2,347,056 $ 3,438,102 $ 3,101,221 -1- Item 5. - 93 xB -138- CSG Consultants, Inc. Consolidated Statements of Income and Shareowners' Equity Nine months ended Year ended September 30 December 31 2012 2011 Revenue Staff augmentation $ 5,253,788 $ 6,404,701 Engineering 1,783,546 2,579,800 Buildit plan review 2,547,654 2,624,802 9,584,988 11,609,303 Costs and expenses, before depreciation and amortization Direct payroll and related benefits 4,844,665 5,23Q168 Subcontract 74,928 187,852 Contract expenses rebilled 11,293 30,240 Indirect payroll and related benefits 2,729,201 3,655,390 Occupancy 325,231 382,515 Sales and marketing 58,306 52,018 Software development 39,868 172,685 General and administrative 1,075,461 1,125,113 Other income (20,481) (11,098) 9,138,472 10,824,883 Operating income before depreciation and amortization, and interest expense 446,516 784,420 Depreciation and amortization (116,574) (178,061) Interest expense (3,361) (10,586) Income before income taxes , �.. 326,581 595,773 Provision for income taxes 5,185 9,600 Net income 321,396 586,173 Other comprehensive income (loss) Currency translation adjustments - net (93,041) (102,086) Net comprehensive income 228,355 484,087 Shaz�eowners' equity, beginning of period 8 p2,347,056 ,�...,..m,.,m. 2 347,056 Z175, 817 Loan payments received from. shareowners 14,762 8,516 Distributions paid to shareowners (381,790) (179,570) Loans to shareowners _ (30,000) (141,794) Shareowners' equity, end of period $ 2,178,383 $ 2,347,056 _2_ HB -139- Item 5. - 94 CSG Consultants, Inc. Consolldated Statements of Cash Flows Nine months ended Year ended September 30 December 31 2012 2011 Operating activities Net income $ 321,396 $ 586,173 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 116,574 178,061 Loss (gait) on asset dispositions (14,539) 275 Changes in assets and liabilities: Accounts receivable (419,560) 75,216 Unbilled accounts receivable (31,568) 222,275 Insurance claim receivable - 531,250 Prepaid expenses 126,294 (23,488) Deposits and other (1,198) 85,493 Accounts payable and accrued liabilities 318,544 (978,636) Deferred income and deposits 108,163 - Net cash provided by operating activities 524,106 676,619 Investing activities Payments for property and equipment (161,103) (73,384) Net cash used in investing activities (148,691) (73,384) Financing activities Net borrowings under line of credit 150,000 Repayments of borrowings under notes payable (71,153) (334,858) Loans made to shareowners (30,000) (141,794) Loan payments received from shareowners 14,762 8,516 Distributions paid to shareowners (381,790) (179,570) Foreign currency translation, net (97,764) (102,086) Net cash used in financing activities (415,945) (749,792) Net decrease in cash (40,530) (146,557) Cash and equivalents at beginning of period 453,906 600,463 Cash and equivalents at end of Reriod , $ 413,376zQ $ 453,906 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 3,400 $ 10,600 Cash paid for income taxes $ 6,300 $ 9,600 _3. Item 5. - 95 HB -140- City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk September 5, 2013 Khoa Duong CSG Constultants, Inc. 801 Park Center Drive, #230 Santa Ana, CA 92705 Dear Mr. Duong: Enclosed for your records is a copy of "Amendment No. 1 to Agreement Between The City of Huntington Beach and CSG Consultants, Inc. for Building Staffing Services." Sincerely, Joan L. Flynn, CMC City Clerk JF:pe Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand City Of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk June 21, 2012 Khoa Duong CSG Consultants, Inc. 801 Park Center Drive, #230 Santa Ana CA 92705 Dear Mr. Duong: Enclosed for your records is an original signed copy of the "Professional Services Contract Between. the City of Huntington Beach and CSG Consultants, Inc., for Building Staffing Services. Sincerely, oan L. Flynn, CIVIC City Clerk JF:pe Enclosure G:folwu :a�ltltr tstYr Gives: Anjo, Japan ♦ Waitakere, New Zealand Council/Agency Meeting Held: Defe red/Continued to: City Clerk's Signat r Approv Conditionally Approved ❑Denied Coun it Meeting Date: June 18, 2012 Department ID Number: PL 2012-014 WIN SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Scott Hess, AICP, Director of Planning and Building SUBJECT: Approve Professional Services Contract with CSG Consultants, Inc. for Contract Inspection Services at The Village Residential at Bella Terra II; approve a Reimbursement Agreement with Holland Construction, Inc.; and, appropiate funds to be fully reimbursed Statement of Issue: Transmitted for City Council's consideration is a professional services agreement with CSG Consultants, Inc. for Building Division staffing services at The Village at Bella Terra II residential project and a reimbursement agreement with Holland Construction, Inc. to fund the special building inspection services requested. Financial Impact: None. An appropriation of $150,000 from the General Fund to the Planning and Building Department Professional Services Account 10060401.69365 is required. However, these funds will be offset by the attached reimbursement agreement with the developer of the project, Holland Construction, Inc. Recommended Action: Motion to: A) Approve and authorize the Mayor and City Clerk to execute the "Professional Services Contact between the City of Huntington Beach and CSG Consultants, Inc. for Building Staff Services" in the amount of One Hundred and Fifty Thousand Dollars ($150,000), as prepared by the City Attorney; and, B) Approve and authorize the Mayor and City Clerk to execute the "Reimbursement Agreement Between the City of Huntington Beach and Holland Construction, Inc. for Costs Incurred for Special Services" in the amount of One Hundred and Fifty Thousand Dollars ($150,000), as prepared by the City Attorney; and, C) Appropriate funds in the amount of $150,000 from the City's General Fund to the Planning and Building Department Professional Services Account 10060401.69365 for the Professional Services contract between the City and CSG Consultants, Inc., which is funded by the reimbursement agreement. HB -103- Item 10. - I REQUEST FOR COUNCIL ACTION MEETING DATE: 6/18/2012 DEPARTMENT ID NUMBER: PL 2012-014 Alternative Action(s): The City Council may make the following alternative motions: 1. Deny the Professional Services Contract between the City and CSG Consultants, Inc. and the Reimbursement Agreement between the City and Holland Construction, Inc. or 2. Continue the item and direct staff accordingly. Analysis: Holland Construction, Inc. has begun construction at The Village at Bella Terra II residential project. In order to help expedite the project, the developer has requested that the Planning and Building Department commit sufficient resources to provide special inspection services. The special services are to include a full-time Building Inspector assigned to the project for twelve months. In order to provide for the special services, it will be necessary for the City to hire a contract inspector. To pay for these services, the City and Holland Construction, Inc. will enter into a Reimbursement Agreement in the amount of $150,000. The payments have been divided into two equal payments of $75,000, the first due on or before June 25, 2012 and the second payment by December 25, 2012. CSG Consultants, Inc. currently provides contract inspectors to the City. Staff recommends the City Council approve the agreement with CSG Consultants, Inc. for a not -to -exceed total contract amount of $150,000 and authorize the Mayor and City Clerk to execute the documents. CSG Consultants, Inc. is well respected in the industry and continues to provide exceptional services for the City of Huntington Beach. Also, CSG Consultants, Inc. works exclusively for government agencies avoiding any conflict of interest with private developers. If the Reimbursement Agreement and budget appropriation to the Planning and Building Department are not approved, the City will not be able to provide the proposed special services in order to meet the developer's construction schedule. Staff solicited proposals from the following three qualified vendors for this project: - CSG Consultants, Inc. - Scott Fazekas & Associates, Inc. - Charles Abbott and Associates, Inc. Staff distributed Requests for Proposals for Building Staffing Services to these three consultants. One proposal was received from CSG Consultants, Inc. One consultant indicated that they were committed to other projects and elected to decline to submit a proposal, and one consultant did not respond to the Request for Proposal. The proposal was reviewed by staff, and then other cities were contacted to determine the fair prevailing wage for the services to be performed. It was determined that CSG Consultants, Inc proposal to be competitive. Staff recommends approval of the professional services agreement. with CSG Consultants, Inc. and the reimbursement agreement with Holland Construction, Inc. Item 10. - 2 HB -104- ig REQUEST FOR COUNCIL ACTION MEETING DATE: 6/18/2012 DEPARTMENT ID NUMBER: PL 2012-014 Environmental Status: Not Applicable Strategic Plan Goal: Improve the City's infrastructure Attachment(s): 1. ("Professional Service Contract Between the City and CSG Consultants, Inc. for Building Staffina Services" 2. 1"Reimbursement Agreement Between the City of Huntington Beach and Holland Construction, Inc. for Costs Incurred for Special Services" -P �� � 9�4�-e L4- HB -105- Item 10. - 3 3 �. i I A TA Item 10. - 4 HB -106- PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CSG CONSULTANTS, INC. FOR BUILDING STAFFING SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY, and CSG Consultants, Inc., a California Corporation hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to perform counter services and field inspections; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the 'PROJECT." CONSULTANT hereby designates Khoa Duong who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. agree/ surfnet/professional sves mayor I Of 11 12/07 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on 20 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than 45 days from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed One Hundred and Fifty Thousand Dollars ($150,000). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake agree/ surfnet/professional Svcs mayor 2 of 11 12/07 such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 7. DISPOSITION OF PLANS. ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any agree/ surfnet/professional svcs mayor 3 of 11 12/07 insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above -mentioned insurance shall not contain a self -insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims -made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that I might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect agree/ surfnet/professional sves mayor 4 of 11 12/07 Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. agree/ surfnet/professional svcs mayor 5 of 11 12/07 CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. agreei surfnet/professional svcs mayor 6 of 11 12/07 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: TO CITY: City of Huntington Beach ATTN: Scott Hess, Director of Planning & Building 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULTANT: Khoa Duong CSG Consultants, Inc. 801 Park Center Dr. #230 Santa Ana, CA 92705 When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. agree/ surfnet/professional Svcs mayor 7 of 11 12/07 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be agree/ surfnet/professional sves mayor 8 of 11 12/07 curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY' S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. agree/ surfnet/professional svcs mayor 9 of l I 12/07 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. CONS>< LTANT's initials 6" iL k,., 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. agree/ surfnet/professional svcs mayor 10 of 11 12/07 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Council. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CSG CONSULTANTS, INC. COMPANY NAME C print name ITS: (circle onel Chairmantresiden>lice President AND By: — QA4-�� t,"OA, 1>vortg 9.F print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk REVIE)IiI AND APPROVED: Manager ROVED AS TO FORM: Cit Attorney���\ agree/ surfnet/professional Svcs mayor 11 of 11 12/07 EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of work to be performed) 1. Perform counter services and field inspections of construction projects to ensure that the contractor or homeowner properly follow the approved construction plans and standards in accordance with the adopted building codes. B. CONSULTANT'S DUTIES AND RESPONSIBILITIES: 1. CSG Consultants, Inc. to maintain daily inspection records and all necessary documents on file and available to the City. 2. Consultant will perform as an extension of staff. C. CITY'S DUTIES AND RESPONSIBILITIES: 1. City shall provide the workplace for all employees in strict compliance with applicable health and working standards and specifications. 2. City shall comply with all safety engineering and governmental health and safety rules, regulations, directives, orders or similar requirements. 3. City shall take all actions necessary to establish and implement an injury and illness prevention program as required by the Occupational Injury Program Act. 4. City shall post or provide employee notices as required by law. 5. City shall notify CSG immediately of all employee illnesses, accidents, injuries, and absences. 6. City will make timely payments as outlined in Exhibit "B" D. WORK PROGRAM/PROJECT SCHED N/A EXHIBIT A W A EXHIBIT "B" Payment Schedule (Hourly Payment) Hourly Rate CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost schedule: Counter Services Building Inspector I Building Inspector II $45.00 per hour $55.00 per hour $65.00 per hour C lG Travel Charges for time during travel are not reimbursable. Billing 1. All billing shall be done monthly, in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non -approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought 1 Exhibit B into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2 Exhibit B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CSG CONSULTANTS, INC. FOR BUILDING STAFFING SERVICES Table of Contents Scopeof Services.....................................................................................................I CityStaff Assistance................................................................................................2 Term; Time of Performance.....................................................................................2 Compensation..........................................................................................................2 ExtraWork...............................................................................................................2 Methodof Payment..................................................................................................3 Disposition of Plans, Estimates and Other Documents...........................................3 HoldHarmless.........................................................................................................3 Professional Liability Insurance......................................................... :................... 4 Certificate of Insurance............................................................................................5 IndependentContractor............................................................................................6 Termination of Agreement.......................................................................................6 Assignment and Delegation......................................................................................6 Copyrights/Patents...................................................................................................7 City Employees and Officials..................................................................................7 Notices.........................................................................................7 Consent....................................................................................................................8 Modification............................................................................................................. 8 SectionHeadings.....................................................................................................8 Interpretation of this Agreement..............................................................................8 DuplicateOriginal....................................................................................................9 Immigration............................................................................................................... 9 Legal Services Subcontracting Prohibited................................................................9 Attorney's Fees..........................................................................................................10 Survival.....................................................................................................................10 GoverningLaw.........................................................................................................10 Signatories.................................................................................................................10 Entirety......................................................................................................................10 EffectiveDate................................................................................. I I I € LRr - D INDEMNIFICATION wr4 w er MODIFICATION REQUEST 1. Requested by: Planning and Building - C-n: I L—e (+ 2. Date: 3/15/2012 3. Name of contractor/permittee: CSG Consultants, Inc. 4. Description of work to be performed: Professional Inspection Services 5. Value and length of contract: $30,000; 3/15/2012 to 12/14/2012 6. Waiver/modification request: $50,000 SIR on professional liability 7. Reason for request and why it should be granted: Unable to comply with requirements; financials requested 8. Identify the riskg"iro the City in approving this waiver/modification: N/A ent t-ieaa Signature Date: APPROVALS Approvals must -be obtained -in the order listed on this -form. -Two::<approva.ls are;required for a request to be granted. Approval from he City Admini rator's.Office"is-only- required if Risk Management 'th City Attorney' ice disagree. 1. j6k Managementpp Approved ElDenied Signature bate 2. City Attorney's OfficeA3�o proved ❑ Denie Signature Date 3. City Manager's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification-request-is to be submitted to the City Attorney's Office along with the contract for approval. Once -the contract,:has been approved, this form is to be filed with the Risk Management Division of Human,Resources /&I Insurance Waiver Form 3/15/2012 11:23:00 AM AcCWL)iQ0 CERTIFICATE OF LIA ILITY .INS NC D1ATE (MMYYY) 21151DD/Y 12/15/2011 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 BETWEENTHE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(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 0726293 1-415-546-9300 Arthur J. Gallagher & Co. Insurance Brokers of California, Inc., License #0726293 One Market Plaza, Spear Tower Suite 200 CONTACT Don .Tarantino NAME: _( /CNN ,Exj): HOE 415-536-8617 FAX No): 415-536-8627 -- —_. E-MAIL n doantino®a com ADDRESS: __tar_. jg. San Francisco, CA 94105 INSURERS AFFORDING COVERAGE NAIC # INSURER A: TRAVELERS PROP CAS CO OF AMER 25674 INSURED INSURERB: SENTINEL INS CO LTD 11000 CSG Consultants Inc. INSURER C : ARCH IN3 CO 11150 INSURERD: 1700 S. Amphlett Blvd 3rd Floor INSURERE: San Mateo, CA 94402 INSURER F : COVERAGES CERTIFICATE NUMBER: 24484645 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR i LTR t TYPE OF INSURANCE ADDL SUER POLICY NUMBER POLICY EFF MM/DD/YYYY POLICY EXP MMIDD/YYYY LIMITS A GENERAL LIABILITY X 680294MOS50-TIL-11 12/04/1 12/04/12 EACH OCCURRENCE $ 1,000,000 X GENERAL LIABILITY DAMAGE TO RENTED -PREMISES Ea occurrence)$ 1,000,000 _ -COMMERCIAL _ 1 CLAIMS -MADE a OCCUR MED EXP (Any one person) $ 10,000 PERSONAL BADVINJURY $1,000,000 _ GENERAL AGGREGATE $ 2,000,000 GEN'LAGGREGATE LIMIT APPLIES PER: PRODUCTS -COMPIOPAGG $2,000,000 POLICYPRO- X LOC_- A AUTOMOBILE LIABILITY AUTO ALL OWNED SCHEDULED AUTOS Ix NON -OWNED HIRED AUTOSAUTOS Ix X BA4611471l :. ,„ N�,rN1�� l`�i•=���'r i im��lal >• -� 12 /04 12/04/12— COMBINED SINGLE LIMIT (Ea accident) 1, 000,.000 BODILY INJURY (Per person) $ANY BODILY'INJURY(Per accident) PROPERTY DAMAGE (Per accident)__.-�_— $AUTOS $ ___ .-........._.,,®®� $ A X UMBRELLA LIAB X OCCUR CUP29441060 12/04/1 12/04/12 EACHOCCURRENCE $ 5,000,000 AGGREGATE $5,000,.000 EXCESS LIAB CLAIMS -MADE OEO I I RETENTION$ Followin Form $ B WORKERS COMPENSATION AND EMPLOYERS'LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE a OFFICERIMEMBER EXCLUDED? (Mandatory In NH) NIA X 57WEEP4360 12/04/1 12/04/12 WC STATU• —DER_ X E.L. EACH ACCIDENT $ 1,000,000 E.L. DISEASE - EA EMPLOYE — E.L. DISEASE - POLICY LIMIT $ 000, 000 If yes, describe under1, DESCRIPTION OF OPERATIONS below C Prof. Liability ARP004731500 12/04/1 12/04/12 Limit 3Mil/3Mi1 Retention 50,000 DESCRIPTION OF DPERATIONS / LOCATIONS 1 VEHICLES (Attach ACORD 101, Additional Remarks Schedule, if more space is required) Blanket Work Comp waiver of subrogation applies..All operations of the Named Insured, the City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers are additional insured per attached endorsement form CG D3 82 09 07- Additional Insured(Architects, Engineers, and Surveyors).. Primary insurance endorsement form CG DO 37 04 05. The City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers are additional insured with respect to Auto Liability per Auto Coverage Plus Endorsement form CA FO 82 12 07. CFRTIFlrATF Nni nFR CONCFI I OTIAN SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Huntington Beach THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. Attn: Risk Management 2000 Main Street AUTHORIZED REPRESENTATIVE Huntington Beach, CA 92648� USA ACORD 25 (2010105) mohsinean 24484645 ©1988-2010 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD COMMERCIAL AUTO THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modi- fied by the endorsement. GENERAL DESCRIPTION OF COVERAGE - This endorsement broadens coverage. However, coverage for any Injury, damage or medical expenses described in any of the provisions of this endorsement may be excluded or limited by another endorsement to the Coverage Part, and these coverage broadening provisions do not apply to the extent that coverage Is excluded or limited by such an endorsement. The following listing Is a general cover- age description only. Limitations and exclusions may apply to these coverages. Read all the provisions of this en- dorsement and the rest of your policy carefully to determine rights, duties, and what Is and Is not covered. A. BLANKET ADDITIONAL INSURED B. EMPLOYEE HIRED AUTO C. EMPLOYEES AS INSURED D. SUPPLEMENTARY PAYMENTS -- INCREASED LIMITS E. TRAILERS - INCREASED LOAD CAPACITY F. HIRED AUTO PHYSICAL DAMAGE G. PHYSICAL DAMAGE - TRANSPORTATION EXPENSES -INCREASED LIMIT A. BLANKET ADDITIONAL INSURED The following is added to Paragraph A. I., Who Is An Insured, of SECTION II -- LIABILITY COV- ERAGE: Any person or organization who is required under a written contract or agreement between you and that person or organization, that is signed and executed by you before the "bodily injury" or "property damage" occurs and that is in effect during the policy period, to be named as an addi- tional insured is an "Insured" for Liability Cover- age, but only for damages to which this insurance applies and only to the extent that person or or- ganization qualifies as an "insured" under the Who Is An Insured provision contained in Section II. B. EMPLOYEE HIRED AUTO 1. The following is added to Paragraph A.i., Who Is An Insured, of SECTION II - LI- ABILITY COVERAGE: An "employee" of yours is an "insured" while operating a covered "auto" hired or rented under a contract or agreement in that "em- ployee's" name, with your permission, while H. AUDIO, VISUAL AND DATA ELECTRONIC EQUIPMENT -- INCREASED LIMIT I, WAIVER OF DEDUCTIBLE - GLASS J. PERSONAL EFFECTS K. AIRBAGS L. AUTO LOAN LEASE GAP M. BLANKET WAIVER OF SUBROGATION performing duties related to the conduct of your business. 2. The following replaces Paragraph b. In B.5., Other Insurance, of SECTION IV - BUSI- NESS AUTO CONDITIONS: b. For Hired Auto Physical Damage Cover- age, the following are deemed to be cov- ered "autos" you own: (1) Any covered "auto" you lease, hire, rent or borrow; and (2) Any covered "auto" hired or rented by your "employee" under a contract in that individual "employee's" name, with your permission, while perform- ing duties related to the conduct of your business. However, any "auto" that is leased, hired, rented or borrowed with a driver is not a covered "auto". C. EMPLOYEES AS INSURED The following Is added to Paragraph A.'I., Who Is An Insured, of SECTION II - LIABILITY COV- ERAGE: CA T4 20 07 10 C 2010 The Travelers Indemnity Company. All rights reserved. Page 4 of 3 Includes copyrighted material of insurance Services Office, Inc. with its permission. 001639 COMMERCIAL AUTO Any "employee" of yours is an "insured" while us- ing a covered "auto" you don't own, hire or borrow in your business or your personal affairs. D. SUPPLEMENTARY PAYMENTS — INCREASED LIMITS 1. The following replaces Paragraph A.2.a.(2) of SECTION 11— LIABIUTY COVERAGE: (2) Up to $3,000 for cost of bail bonds (in- cluding bonds for related traffic law viola- tions) required because of an "accident" we cover. We do not have to furnish these bonds. 2. The following replaces Paragraph A.2.a.(4) of SECTION 11— LIABILITY COVERAGE: (4) All reasonable expenses incurred by the "Insured" at our request, including actual loss of earnings up to $500 a day be- cause of time off from work. E. TRAILERS -- INCREASED LOAD CAPACITY The following replaces Paragraph C.I. of SEC- TION 1— COVERED AUTOS: 1. "Trailers" with a load capacity of 3,000 pounds or less designed primarily for travel on public roads, F. HIRED AUTO PHYSICAL DAMAGE The following is added to Paragraph AA., Cover- age Extensions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Hired Auto Physical Damage Coverage If hired "autos" are covered "autos" for Liability Coverage but not covered "autos" for Physical Damage Coverage, and this policy also provides Physical Damage Coverage for an owned "auto", then the Physical Damage Coverage is extended to "autos" that you hire, rent or barrow subject to the following: (1) The most we will pay for "loss" in any one "accident" to a hired, rented or borrowed "auto" is the lesser of: (a) $50,000; (b) The actual cash value of the damaged or stolen property as of the time of the "foss"; or (3) If a repair or replacement results in better than like kind or quality, we will not pay for the amount of betterment. (4) A deductible equal to the highest Physical Damage deductible applicable to any owned covered "auto". (5) This Coverage Extension does not apply to: (a) Any "auto" that is hired, rented or bor- rowed with a driver; or (b) Any "auto" that is hired, rented or bor- rowed from your"employee". G. PHYSICAL DAMAGE TRANSPORTATION EXPENSES — INCREASED LIMIT The following replaces the first sentence in Para- graph A.4.a., Transportation Expenses, of SECTION III — PHYSICAL DAMAGE COVER- AGE: We will pay up to $50 per day to a maximum of $1,500 for temporary transportation expense in- curred by you because of the total theft of a cov- ered "auto" of the private passenger type. H. AUDIO, VISUAL AND DATA (ELECTRONIC EQUIPMENT — INCREASED LIMIT Paragraph C.2.. Limit Of Insurance, of SEC- TION III — PHYSICAL DAMAGE COVERAGE is deleted. I. WAIVER OF DEDUCTIBLE — GLASS The following is added to Paragraph D., Deducti- ble, of SECTION III — PHYSICAL DAMAGE COVERAGE: No deductible for a covered "auto" will apply to glass damage if the glass is repaired rather than replaced. J. PERSONAL EFFECTS The following is added to Paragraph A.4., Cover- age Extensions, of SECTION Ili — PHYSICAL DAMAGE COVERAGE: Personal Effects Coverage We will pay up to $400 for "loss" to wearing ap- parel and other personal effects which are: (1) awned by an "insured"; and (2) In or on your covered "auto". (c) The cost of repairing or replacing the This coverage only applies in the event of a total damaged or stolen property with other theft of your covered "auto". property of like kind and quality. No deductibles apply to Personal Effects cover- (2) An adjustment for depreciation and physical age. condition will be made in determining actual cash value in the event of a total "loss", Page 2 of 3 ® 2010 The Travelers indemnity Company. All rights reserved. CA T4 70 07 10 Includes copyrighted material of Insurance Services Office, Inc. wRh Its permiaslon. K. L. AIRBAGS The following is added to Paragraph B.3., Exclu- sions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Exclusion 3.a. does not apply to 'loss" to one or more airbags In a covered "auto" you own that in- flate due to a cause other than a cause of 'loss" set forth in Paragraphs A.1.b. and A.1.c., but only: a. If that "auto" is a covered "auto" for Compre- hensive Coverage under this policy; b. The airbags are not covered under any war- ranty: and c. The airbags were not Intentionally inflated. We will pay up to a maximum of $1,000 for any one "loss". AUTO LOAN LEASE GAP The following is added to Paragraph A.4., Cover- age Extensions, of SECTION III — PHYSICAL DAMAGE COVERAGE: Auto Loan Lease Gap Coverage for Private Passenger Type Vehicles In the event of a total "loss" to a covered "auto" of the private passenger type shown in the Schedule or Declarations for which Physical Damage Cov- erage is provided, we will pay any unpaid amount due on the lease or loan for such covered "auto" less the following. (1) The amount paid under the Physical Damage Coverage Section of the policy for that "auto'; and COMMERCIAL AUTO (2) Any: (a) Overdue lease or loan payments at the time of the `loss' (b) Financial penalties imposed under a lease for excessive use, abnormal wear and tear or high mileage; (c) Security deposits not returned by the les- sor; (d) Costs for extended warranties, Credit Life Insurance, Health, Accident or Disability Insurance purchased with the loan or lease; and (e) Carry-over balances from previous loans or leases. M. BLANKET WAIVER OF SUBROGATION The following replaces Paragraph A.S., Transfer Of Rights Of Recovery Against Others To Us, of SECTION IV -- BUSINESS AUTO CONDI- TIONS: 5. Transfer Of Rights Of Recovery Against Others To Us We waive any right of recovery we may have against any person or organization to the ex- tent required of you by a written contract exe- cuted prior to any "accident" or "loss", pro- vided that the "accident" or "loss" arises out of the operations contemplated by such con- tract. The waiver applies only to the person or organization designated in such contract, CA T4 20 07 10 © 2010 The Travelers indemnity Company. AP rights reserved. Page 3 of 3 Includes copyrighled material of Insurance Services Office, Inc. with Its permission. COMMERCIAL GENERAL LIABILITY THUS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULM OTHER INSURANCE - ADDITIONAL INSUREDS This endorsement modifies Insurance provided under the following; COMMERCIAL GENERAL LIABILITY COVERAGE PART PROVISIONS b. The "personal Injury" or "advertising Injury" for COMMERCIAL GENERAL LIABILITY CONDITIONS which coverage Is sought arises out of an of- (Secilun IV), Paragraph 4. (Other Insurance), IS fense committed amended as follows; subsequent to the slgning and execution of that 1. The following Is added to Paragraph a. Primary contract or agreement by you, Insurance: 2. The first Subparagraph (2) of Paragraph b. Ex - However, If you specifically agree In a written con- cess Insurance regarding any other primary In - tract or written agreement that the Insurance pro- surance available to you is deleted. vided to an additional Insured under this Coverage Part must apply on a primary basis, or 3. The following is added to Paragraph b. rzxcoso Insurance, as an additional subparagraph under a primary and non-contributory basis, this insur. Subparagraph(1)', anee Is primary to other Insurance that Is avail- able to such additional Insured which covers such That la available to the Insured when the Insured additional Insured a named Insured, and we is added as an addltlonal.lnsured under any other with Will not shaarerewith that other insurance, provided policy, Including any umbrella or excess policy, that, a. The "bodily Injury' or "property damage" for which coverage Is sought occurs; and CG DO 37 04 05 Copyright 2006 The St. Paul Travelers Companies, Ino, All rights reserved, Page I of I POLICY NUMBER: 680-294MO850-TIL-11 COMMERCIAL GENERAL LIABILITY ISSUE DATE: 11-07-11 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE NAME OF PERSON($) OR ORGANIZATION(S): PER SCHEDULE ON FILE WITH AGENT PROJECT/LOCATION OF COVERED OPERATIONS: PROVISIONS A. The following is added to WHO IS AN INSURED (Section II): The person or organization shown in the Sched- ule above is an additional Insured on this Cover- age Part, but only with respect to liability for "bod- ity injury", "property damage" or "personal injury" caused, in whole or in part, by your acts or omis- sions or the acts or omissions of those acting on your behalf: a. In the performance of your ongoing opera- tions; b, in connection with premises owned by or rented to you; or c. In connection with "your work" and included within the "products -completed operations hazard". Such person or organization does not qualify as an additional insured for "bodily injury", "property damage" or "personal injury" for which that per- son or organization has assumed liability in a con- tract or agreement. The insurance provided to such additional insured is limited as follows: d. This insurance does not apply to the render- Ing of or failure to render any "professional services". e. The limits of insurance afforded to the addi- tional insured shall be the limits which you agreed in that "contract or agreement requir- ing insurance" to provide for that additional Insured, or the limits shown in the Declara- tions for this Coverage Pali, whichever are less. This endorsement does not increase the limits of insurance stated in the LIMITS OF INSURANCE (Section III) for this Coverage Part. B. The following Is added to Paragraph a. of 4. Other Insurance in COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): However, if you specifically agree In a "contract or agreement requiring insurance" that, for the addi- tional Insured shown in the Schedule, the insur- ance provided to that additional Insured under this CG 03 82 OS 07 0 2007 The Travelers Companies, Inc. Page 1 of 2 Includes the copyrighted material of insurance Services Office, Inc., with Its permission 004274 COMMERCIAL GENERAL LIABILITY m Coverage Part must apply on a primary basis, or a primary and non-contributory basis, this insur- ance is primary to other insurance that is avail- able to such additional insured which covers such additional insured as a named insured, and we will not share with the other insurance, provided that; (1) The "bodily injury" or "property damage" for which coverage is sought occurs; and (2) The "personal injury" for which coverage is sought arises out of an offense committed; after you have entered Into that "contract or agreement requiring insurance" for such addi- tional insured. But this insurance still is excess over valid and collectible other insurance, whether primary, excess, contingent or on any other basis, that Is available to the additional in- sured when the additional insured Is also an addi- tional insured under any other insurance. C. The following is added to Paragraph 8. Transfer Of Rights Of Recovery Against Others To Us in COMMERCIAL GENERAL LIABILITY CON- DITIONS (Section IV): We waive any rights of recovery we may have against the additional Insured shown in the Schedule above because of payments we make for "bodily injury", "property damage" or "personal injury" arising out of "your work" on or for the pro- ject, or at the location, shown in the Schedule above, performed by you, or on your behalf, un- der a "contract or agreement requiting Insurance" with that additional insured. We waive these rights only where you have agreed to do so as part of the "contract or agreement requiring insur- ance" with that additional insured entered into by you before, and in effect when, the "bodily Injury" or "property damage" occurs, or the "personal in- jury" offense is committed. D. The following definition is added to DEFINITIONS (Section V): "Contract or agreement requiring insurance" means that part of any contract or agreement un- der which you are required to Include the person or organization shown in the Schedule as an ad- ditional insured on this Coverage Part, provided that the "bodily injury" and "property damage" oc- curs, and the "personal injury" is caused by an of- fense committed: a. After you have entered into that. contract or agreement; b. While that pan` of the contract or agreement is in effect; and c. Before the end of the policy period. Page 2 of 2 ® 2007 The Travelers Companies, Inc. CG D3 82 09 07 Includes the copyrighted material of Insurance Services Office, Inc., with Us permission THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WORKERS' COMPENSATION BROAD FORM ENDORSEMENT EXTENDED OPTIONS rq P ttcy dumber: 57 WE EP43 GO1-1 Endorsement Number: o Effective pate: 12 / D 4 J11 Effective hour Is the same as stated on the Information Page of the policy. Nam d ineured and Address: CSO CONSULTANTS INC 1700 S AMPHLETT BLVD 3RA FL SAN MATEO, CA 94402 Section l of this endorsement expands coverage provided under WC 00 00 00, Section II of this endorsement provides additional coverage usually only provided by endorsement. Section III of this endorsement Is a Schedule of Covered States. You may use the Index to locate these coverage features quickly: SECTION F PARTS ONE and TWO 01 We Will Also Pay PART -THREE 02 Haw This Insurance Works PART. SIX 03 Transfer of Your Rights and Dulles 04 Liberalization SECTION II VOLUNTARY COMPENSATION INSURANCE 06 Voluntary Compensation Insurance A. How This Insuranos Applies B. We Will Pay C. Exclusions D. Before We Pay E. Recovery From Others F. Employers' Liability Insurance EMPLOYERS' LIABILITY SWOP GAP ENDORSEMENT 06 Employers' Llabllity Stop Gap Coverage A. Stop Gap Coverage Limited to Montana, North Dakota, Ohio, Washington, West Virginia and Wyoming Form WC 99 03 03 B Printed In U.S.A. (Ed, 6/00) PrOceSS Dal : 11116111 0 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 B. Part One Doss Not Apply C. Application of Coverage D. Additional Exclusions E. West Virginia EXTENDED OPTIONS 01 Employers' Lfability Insurance 02 Unintentional Failure to Disclose Hazards 03 Waiver of Our Right to Recover from Others 04 Foreign Voluntary Compensation A. Now This Reimbursement Applies B. We Wit Reimburse C. Exclusions D, Before We Pay E. Recovery From Others F. Reimbursement For Actual loss Sustained G. Repatriation H. Endemic Disease 06 Longshore and Harbor Workers' Compensation Aot Coverage Endorsement SECTION Ili 01 Schedule of Covered States 0 2000, Tho Hartford 0 Pag i of 6 Polley Expiration oat : 12 / 04 /12 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 S G 6 SECTION I iPARTS ONE and TWO I. WE WiLL ALSO PAY D. We Will Also pay of Part One (WORKERS' COMPENSATION INSURANCE); and IE- We Will Also Pay of Part Two (EMPLOYERS' LiA131LITY INSURANCE) is replaced by the following; 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: t. reasonable expenses Incurred at our request, INCLUDING 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; S. litigation costs taxed against you; 4. Interest on a judgment as required by law until we offer the amount due under this law; and 5. expenses we Incur. PARTTHREE 2. Flow ibis insurance Applies Paragraph 4. of A. Now This inaurano App11 a of Part S (Other States Insurance) Is replaced by the following; 4. it you have work on the effective date of this policy In any state not listed in Item S.A. of the Information Page, coverage will not be afforded for that state unless we are notified within sixty days. PART SiX s. Transfer Of Your Rights and Duties C. Transfer Of Your Rights and nail a of matt 6 (Conditions) Is replaced by the following: Your rights or duties under this policy may not be transferred without our written consent. If you die and we receive notice within sixty days after your death, we will cover your legal representative as insured. 4. Liberalization If we adopt a change in this form that would broaden the coverage of this forth without extra charge, the broader coverage will apply to this policy. It will apply when the change becomes affective in your state. SECTION Ii VOLUNTARY COMPENSATION AND EMPLOYERS S. The bodily Ir4ury must occur in the United LIABILffY COVERAGE States of America, its territories or 5, V funtary Compensation Insurance, possessions, or Canada, and may occur A. N w This Insurance Applies elsewhere Ii the employee Is a .United States or Canadian citizen, or otherwise This Insurance applies to bodily Injury by legal resident, and legally employed, in the accident or bodily injury by disease. Bodily United States or Canada and temporarily Injury includes resulting death, away from those places. 1. The bodily Injury must be sustained by any 4. Bodily Injury by accident must occur officer or employee not subject to the during the policy period. workers' compensation law of any state S. Bodily Injury by disease must be, caused shown in Item S.A, of the Information or aggravated by ilia conditions of the Page. 2. The bodily Injury must arise out of and in the course of employment or Incldentai to work In a state shown in item S.A. of the information Page. F rm WG tie w os B Printed in U.S.A. (Ed. 8100) Peg 2 of 6 a. C. 0 LA officer's or employee's employment. The offlcer's or employee's last day of last exposure to the conditions causing or aggravating such bodily Injury by disease must occur during the policy perlod. We Will pay We will pay an amount equal to the benefits that would be required of you as if you and your employees were: subject to the workers' compensation law of any state shown In Item S.A. of the Information Page. We will pay those amounts to the persons who would be entitled to them under the law. Exclusion This insurance does not cover. 1. any obligation Imposed by workers' compensation or occupational disease law or any similar law. 2. bodily injury Intentionally caused or aggravated by you. S. officers or employees who have elected not to be subject to the state workers' compensation law. 4. partners or sole proprietors not covered under the Standard Sole Proprietors, Partners, Officers and Others Coverage Endorsement. Before We Pay Before we pay benefits to the persons entitled to them, they must: t . Release you and us, In writing, of all responsibility for the Injury or death. 2. Transfer to us their right to recover from others who may be responsible for the injury or death. e. Cooperate with us and do everything necessary to enable us to enforce the right to recover from others. if the persons antflied to the benefits of this insurance fail to do those things, our duty to pay ends at once. if they claim damages from you or from us for the Injury or death, our duty to pay ends at once. Recovery From Others If we make a recovery from others, we will keep an amount equal to our expenses of recovery and the benefits we paid. We will Pay the balance to the persons entitled to It. F rtn WC 99 03 03 B Printed In U.S.A. (Ed. 8100) If the persons entitled to the benefits of Oils Insurance make a recovery from others, they must reimburse us for the benefits we paid them. F. Employers' Liability Insurance Part Two (Employers' Liabiiity Insurance) applies to bodily injury covered by this endorsement as though the state of Employment was shown In Item S.A. of the Information Page. This provision B. does not apply In New, Jersey or Wisconsin. EMPLOVERS' LIABILITY STOP GAP COVERAGE 6. Employers' Liability Stop Gap Coverall A. This coverage only applies In Montana, North Dakota, Ohio, Washington, West Virginia and Wyoming. B. fart One (Workers' Compensation Insurance) does not apply to work in states shown In Paragraph A above. C. Part Two (Employers' Liability Insurance) applies In the states, shown in Paragraph A., as though they were shown In Item B.A. of the Information Page. D. Part Two, Section C. Exclusions Is changed by adding these exclusions. This Insurance does not cover; S. bodily Injury Intentionally caused or aggravated by you or In Ohio bodily Injury resulting from an act which is determined by an Ohio court of law to have been committed by you with the belief than an Injury Is substantially certain to occur. However, the cost of defending such claims or suits In Ohio Is covered. 13. bodily Injury sustained by any member of the flying crew of any aircraft. 14. any claim for bodily Injury with respect to which you are deprived of any defense or defenses or are otherwise subject to penalty because of default In premium under the provisions of the workers' compensation law or laws of a state shown In Paragraph A. E. This Insurance applies to damages for which you are liable under West Virginia Code Annot. 5 28-4-2. Page 3 f 6 A EXTENDED ®IPTi®NS y. Empl Verse Liability Insuranco Item 3.8. of the Information (Page is replaced by the fo€lowing: B. Employers' Liability insurance: t. Part Two of the policy applies to work In each state listed In item 3.A. The Limits of Liability under Part Two are the higher of: Bodily Injury by Accident $500,000 Each Accident Bodily Injury by Disease $500,000 Policy Limit Bodily Injury by Disease $500,000 Each Employee OR 2. The amount shown In the information Page. This provision t of EXTENDED OPTIONS does not apply In Now York because the Llinits Of Our Llablilty are unlimited. In this provision the limits are changed from $500,000 to $1,000,000 In California. 2. Unlnt nilonai Failure to Disolose Hazards If you unintentionally should fail to disclose all existing hazards at the inception date of your policy, we shall not deny coverage under this Policy because of such failure. 3, Waiver of Our Right To Recover From others A. We have the right to recover our payments from anyone liable for an Injury covered by this policy. We will not enforce our right against any person or organization for whom you perform work under a written contract that requires you to obtain this agreement from us. This agreement shall not operate directly or Indirectly to benefit anyone not named In the agreement, B. This provision S. does not apply In the states of Pennsylvania and Utah. 4. Foreign Voluntary Compensation and Employers' liability Reimbursement A. Now This Reimbursement Applies This reimbursement provision applies to bodily injury by accident or bodily Injury by disease. Bodily Injury Includes result€ag death. 1, The bodily Injury must be sustained by an officer or employee. 2. The bodily Injury must occur in the course of employment necessary or incidental to work In a country not listed In Exclusion C.1, of this provision. 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 officer or employee's Iasi exposure to those conditions of your employment must occur during the policy period. B. We Will Reimburse We will reimburse you for all amounts paid by you whether such amounts are: t, voiuniary payments for the benefits that would be required of you if you and your officers or employees were subject to any workers' compensation law of the state of hire of the Individual employee. 2. sums to which Part Two (Employers' Liability Insurance) would apply If the Country of Employment were shown In [ism &A. of the Information Page. 0. Exclusions This Insurance does not cover: 1. any occurrences In the United States, Canada, and any country or jurisdiction which is the subject of trade or economic sanctions Imposed by the laws or regulations of the United States of America in effect as of the Inception date of this policy. 2, any obligation imposed by a workers' compensation or occupational disease law, or similar law. 3. bodily injury Intentionally caused or aggravated by you. F nm WC 09 03 03 0 Printed in U.S.A. (Ed. 8/00) Rage 4 16 4. liability for any consequence, whether direct or indirect, of war, Invasion, act of Foreign enemy, hostilities (whether war be declared or notj, civil war, rebellion, revolution, Insurrection or military or usurped power. No endorsement now or subsequently attached to this policy shall be construed as overriding or waiving this Ilmltation unless specific reference is made thereto. D. Bofors We Ray Before we reimburse you for the benefits to the o persons entitled to them, you must have them: 1. release you and us, in writing, of all responsibility for the Injury or death, 0 2. transfer to us their right to recover from others who may be responsible for their Injury or death, w 3. cooperate with us and do everything ro sa nscesry to enable us to enforce the right n to recover from others. Mif the persons entitled to the benefits paid fall « to do these things, our duty to reimburse ends at once. If they claim damages from us for the Injury or death, our duty to reimburse ends at once. E. Recovery From others If we make a recovery from others, we will keep an amount equal to our expenses of >. recovery and the benefits we reimbursed. We will pay the balance to the persons entitled to it. If persons entitled to the benefits make a recovery from others, they must repay us for the amounts that we have reimbursed you. F. Reimbursament for Actual Lose Sustained This endorsement provides only for reimbursement for the loss you actually sustain. In order for you to recover loss or _ expenses under this reimbursement you must: i f. actually sustain and pay the loss or expense In money after trial, or 2. secure our consent for the payment of the loss or expense. Q. Repatrlatlon Our reimbursement Includes the additional I= expenses of repatriation to the United States of America necessarily incurred as a direct result of bodily Injury. Our reimbursement shaft be limited as follows: f , to the amount by which such expanses exceed the normal cost of returning the officer or employee If in good health, or 2. in the event of death, to the amount by which such expenses exceed the normal cost of returning the officer at employee if alive and in good health. In no event shall our reimbursement exceed the bodily Injury by accident limit shown in Item 3.8. of the Information Page as respects any one such officer or employee whether dead or alive. H. Eindernic Disease The word "disease" includes any endemic diseases. The coverage applies as It endemic diseases were Included in the provisions of the workers' compensation law. 6. Longshore, and Harbor Workers' Compeneatl n Act Coverage General Section C. Workers' Compensation Law is replaced by the following: C. Workers' Compensation Law Workers' Compensation Law means the workers or workers' compensation law and occupational disease law of each state or territory named In Item 3.A. of the Information Page and the Longshore and Harbor Workers' Compensation Act (33 USC Sections got- 950). it Includes any amendments to those laws that are In effect during the policy period. It does not Include any other Iederal workers or workers' compensation law, other federal occupational disease law or the provisions of any law that provide nonoccupational disability benefits. Part TWO (Employers' Liability Insurance), G. Exclusions, exclusion 8, does not apply to work subject to the Longshore and Harbor Workers' Compensation Act. This coverage does not apply to work subject to the Defense Base Act, the Cuter Continental Shelf Lands Act, or the Monapproprlated Fund Instrumentalities Act. F rm WC 99 03 oa 0 Printed In U.S.A. (Ed. 8/00) Fags 5 of 6 0 SECTION @ill 1. SCHEDULE OF COVERED STATES A. 'Phis endorsement only applies In the states listed in this Schedule of Covered States. C. Schedule of Covered States. CA B. It a state, shown In Item S.A. of the Information Page, approves this endorsement after the effective date of this policy, this endorsement will apply to this policy, The coverage will apply In Me new state on the effective date of the stale approval. Countersigned by Authorized Rapreseniativa F vm WC 99 03 03 8 Printed In U.S.A. (Ed. 8/00) Rag 6 0l 0 SUPPLEMENT TO CERTIFICATE OF INSURANCE DATE 12/15/2011 NAME OF INSURED: CSG Consultants Inc. Additional Descdotion of Operations/Remarks from Page 1: Additional Information: Qi ion 1nelnA% CSG CONSULTANTS, INC. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2011 and 2010 CONTENTS Consolidated Balance Sheets fthedule Consolidated Statements of Income and Retained Earnings,......................2 Consolidated Statements of Cash Flows , , _.._ . CSG Consultants, Inc. Consolidated Balance Sheets December31 2011 2010 ASSETS Current assets Cash and equivalents $ 4533,906 $ 600,463 Accounts receivable, net of allowance for doubtful accounts 2,010,259 2,085,475 Unbiiled accounts receivable 4,600 226,875 Insurance claim receivable - 531,250 Prepaid expenses 289,466 265,978 Total current assets 2,758,231 3,710,041 Property and equipment Computer and operations equipment 577,199 608,036 Furniture and fixtures 447,790 409,648 Vehicles 756,945 756,945 Leasehold improvements 17,550 17,550 1,799,484 1,792,179 Less: accumulated depreciation and amortization (1,517,992) (1,421,939) Net property and equipment 281,492 370,240 Software and licenses, net of accumulated amortization 28,407 61,611 Deposits and other 72,630 141,123 $ 3,140,760 $ 4,283,015 LIABILITIES AND SHAREOVMERS' EQUITY Current liabilities Accounts payable $ 42,149 $ 54,265 Accrued liabilities 604,103 1,570,623 Deferred income and deposits - - Borrowings under line of credit - - Notes payable 78,999 311,246 Total current liabilities 725,251 1,936,134 Notes payable 28,914 131,525 Due to shareowners - - Shareowners' equity Common stock, no par value;1,000,000 shares authorized; 102,825 shares issued and outstanding 362,615 362,615 Additional paid -in capital 672,508 672,508 Notes receivable from shareowners (221,966) (88,688) Currency h-anslation adjustments, net (96,705) 5,381 Retained earnings 1,670,143 1,263,540 Total shareowners' equity 2,386,595 2,215,356 $ 3,140,760 $ 4,283,015 See accompanying notes to consolidntcd financial stalowpits -1- CSG Consultants, Inc. Consolidated Statements of Income and Shareowners' Equity Years ended December 31 2011 2010 Revenue Staff augmentation $ 6,404,701 $ 5,574,807 Engineering 2,579,800 3,089,806 Building plan review 2,624,802 2,169,477 11,609,303 10,834,090 Costs and expenses, before depreciation and amortization Direct payroll and related benefits 5,230,168 4,993,809 Subcontract 187,852 135,046 Contract expenses rebilled 30,240 40,001 Indirect payroll and related benefits 3,655,390 3,176,769 Occupancy 382,515 356,387 Sales and marketing 52,018 44,630 Software development 172,685 174,478 General and administrative 1,125,113 1,137,288 Other income (11,098) (19,049) 10,824,883 10,039,359 Operating income before depreciation And amortization, and interest expense 784,420 794,731 Depreciation and amortization (178,061) (277,048) Interest expense (10,586) (24,360) Income before income taxes 595,773 493,323 Provision for income taxes 9,600 27,000 Net income 586,173 466,323 Other comprehensive income (loss) Currency translation adjustments - net (102,086) 14,043 Net comprehensive income 494,087 480,366 Shareowners' equity, beginning of year 2,215,356 2,651,995 Redemption of common stock, net of shareowner note receivable 8,516 (186,107) Distributions paid to shareowners (179,570) (740,022) Loans to shareholders (141,794) 9,124 Shareowners' equity, end of year $ 2,386,595 $ 2,215,356 See accomiMnying notes to crnisniidated financial statemenfs -2- CSG Consultants, Inc. Consolidated Statements of Cash Flows Years ended December 31 2011 2010 Operating activities Net income $ 586,173 $ 466,323 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 133,496 27048 Loss (gain) on asset dispositions 275 (3,497) Changes in assets and liabilities: Accounts receivable 75,216 (373,473) Unbilled accounts receivable 222,275 (105,333) Insurance claim receivable 531,250 (531,250) Prepaid expenses (23,488) (141,123) Deposits and other 68,493 (39,689) Accounts payable and accrued liabilities (978,636) 730,391 Deferred income and deposits - - Net cash provided by operating activities 615,054 280,397 Investing activities Payments for property and equipment (28,819) (120,789) Proceeds from asset dispositions - 12,316 Payments for software and licenses 17,000 (20,842) Net cash used in investing activities (11,819) (129,315) Financing activities Repayments of borrowings under notes payable (3,14,858) (186,140) Loans made to shareowners (141,794) - Loan payments received from shareowners 8,516 92,334 Redemption of common stock - (269,317) Distributions paid to shareowners (179,570) (740,022) Net repayments of affiliate receivables - (12,035) _ Foreign currency translation, net (102,086) 14,043 Net cash used in financing activities (749,792) (1,101,137) Net decrease in cash (146,557) (950,055) Cash and equivalents at beginning of year 600,463 1,550,518 Cash and equivalents at end of year $ 453,906 $ 600,463 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 10,600 $ 24,400 Cash paid for income taxes $ 9,600 $ 27,000 Sea accompanying notes to consalidated financial statements "3 CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 1 Description of the Company CSG Consultants, Inc. (the Company) was incorporated in California in 2000. Under the name CSG Consultants, Inc., we provide building, engineering, community development and sustainability program support services to governmental agencies, located primarily in California. We build and foster partnerships with communities to create safe, vibrant living environments. CSG Consultants India Private Limited (India) was incorporated in India in 2006. India develops software solutions and information technology services in mechanical and electrical engineering, construction, and architecture. We develop software to arduve and index building plans, facilitate collaborative digital plan review, generate permits, route and track plans in review, coordinate field inspection management, track code enforcement cases. Note 2 Summary of Significant Accounting Policies Basis of Presentation Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP). We have reclassified certain prior -year amounts to conform to the current -year's presentation. Certain notes to the financial statements include amounts rounded to the nearest thousand. Entities Included in Consolidated Financial Statements Our consolidated financial statements include the accounts of the Company and India. All significant intercompany profits, accounts, and transactions have been eliminated in the consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenues Staff augmentation includes amounts billed for hourly fees to provide building and engineering staff on a temporary or long-term basis. Revenue is recognized in the period service is provided and it is deemed probable that such amounts will be realized. Engineering includes fees earned under public works projects. Revenue is based on time and materials and may be subject to a maximum fee. Revenue is recognized in the period service is provided, and when it is deemed probable that such amounts have been earned and will be realized. Losses on specific projects are recognized upon their determination. Building plan review includes amounts billed under fixed and percentage fee arrangements. Revenue is recognized in the period service is provided and it is deemed probable that such amounts will be realized. "Income Statement Characterization of Reimbursements Received for Out-of-pocket Expenses Incurred" released by the Emerging Issues Task Force requires the Company to recognize as both revenues and expenses, in equal amounts, costs directly reimbursed from its engineering services. Accordingly, subcontract and contract expenses include reimbursements for payroll and related costs, and various other direct operating expenses. Decentivr 31, 2011 and 2010 _ q CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 2 Summary of Significant Accounting Policies (cont'd.) Taxes on Income 'The Company has elected to be treated as an S corporation for federal and California tax purposes. Accordingly, all income, losses and tax credits are allocated to the shareholders and federal income tax expense or benefit is not recognized in the accompanying financial statements. California statutes conform to the federal S corporation rules, except for the imposition of a corporate level tax at the rate of 1.5 percent of taxable earnings with an annual minimum of $800. As discussed in note 5, Income 'Taxes, we recognize deferred income taxes for the differences between GAAP income and income that is currently taxable. We utilize a "more likely than not" criteria for evaluating uncertain tax benefits recognized in the financial statements resulting from tax positions taken or expected to be taken in the Company's tax returns. We believe the tax positions in our corporate tax returns are sustainable under an examination. There is no interest or penalties for uncertain tax positions recognized in the Company's financial statements. Tax returns filed for calendar years 2007, 2008 and 2009 currently remain open to examination by taxing jurisdictions. Cash and Equivalents We consider cash and equivalents to include cash on hand, in banks and short term, highly liquid investments with original maturities of three months or less. Accounts Receivable Accounts receivable is recorded at the amount we expect to collect on balances outstanding. Our estimates consider the likelihood of collection and customers abilities to pay the amounts due. The allowance for doubtful accounts is $32,000 and $21,000 at December 31, 2011 and 2010, respectively. We wrote off approximately $66,000 as bad debts during 2011. There were no amounts written -off as bad debts during 2010. Properhl and Equipment Property, equipment and leasehold improvements are recorded at cost. Depreciation and amortization is provided using declining balance and straight-line methods for financial reporting purposes and the accelerated cost recovery method for income tax purposes. Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful life of the improvement using the straight-line method. Computer and operations equipment are depreciated using a declining balance method over estimated useful lives ranging from five to seven years. Furniture and fixtures are depreciated over an estimated useful life of ten years. Vehicles are depreciated over an estimated useful life of five years. Software and Licenses Software is recorded at cost and is amortized using the straight-line method for financial reporting and income tax purposes over an estimated useful life of three years. Research and Development Costs The Company incurs costs in the research and development of software. Costs are charged to expense as incurred. Approximate total research and development costs incurred in 2011 and 2010 were $190,000 and $188,000, respectively and are included in software development and depreciation and amortization. Decennber 31, 2011 and 2010 - 5 CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 3 Borrowings Under Line of Credit The Company has a $1 million revolving line of credit (includes letters of credit) under a Business loan Agreement ("Revolver") with a bank. Interest is payable monthly at prime rate plus one percent (2.75% at December 31, 2011); the minimum interest rate is 5 percent. The Agreement is secured by the general assets of the Company, contains financial covenants and matures on July 30, 2012. Note 4 Notes Payable Notes payable consist of the following: 2011 2010 $480,000 term Ioan, payable $17,071 per month, including interest at 5.0% to January 2012; secured by general assets of the Company $ 33,854 $ 231,507 $92,566 note payable to former shareholder, payable $20,180 January 2010, remainder due and payable with accrued interest at 3,25% January 2011; secured by general assets of the Company _ 42,566 Various automobile purchase loans, payable $5,200 per month including interest at rates ranging from .5% to 5.94% to February 2015, secured by automobiles 74,059 167,698 1.07,913 442,771. Less current maturities 78,999 31.1,246 28Q1A $.1,31 „525 The aggregate amounts of maturities for notes payable for the years following December 31, 2011 are: $79,000 in 2012, $19,000 in 2013; $8,000 in 2014; and $2,000 in 2015. Note 5 Income Taxes As discussed in note 2, California imposes a corporate level tax. Our tax returns are prepared on the cash basis of accounting. As a result, our financial statement income varies each year from the income on our tax returns, These differences are recognized in our financial statements as a deferred tax asset or liability. The most significant temporary differences between our financial statements and our tax return income are trade accounts receivable and accrued expenses. The provision for income taxes is composed of the following: 2011 2010 Current income taxes payable $ 9,100 $ 800 Deferred income tax liability 500 26,200 9.600 27.000 December 3l, 2071 and 2070 -6- CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 6 Lease Commitments We conduct a portion of our operations on leased premises under operating leases. Lease agreements provide for minimum payments and reimbursements for common area expenses. Rental expense was $413,000 and $357,000 in 2011 and 2010, respectively. The aggregate noncancelable operating lease commitments for the years following December 31, 2011 are: $419,000 in 2012; $396,000 in 2013; $346,000 in 2014; $219,000 in 2015; $47,000 in 2016; and $214,000 thereafter. Note 7 Employee Retirement Plans The Company sponsors a 401(k) defined contribution pension plan for substantially all of its employees. Matching contributions are discretionary. There were no matching contributions made in 2011 and 2010. Note 8 Related Parties During 2005 to 2010, we made several personal loans to a minority shareowner. The loans were consolidated in 2011. The new loan matures through May 2026 and bears interest at 2.76%. At December 31, 2011 the aggregate outstanding balance was $40,000. During 2006 to 2008 two company executives purchased minority interests of the Company's common stock. These transactions were financed through loans made by the Company. The terms of these loans were modified during 2011. Additionally, during 2011 we loaned the current principal shareowner approximately $140,000 to repay a loan to the former principal shareowner. The new loans mature through December 2026 and bear interest at 2.76%. The aggregate balance of the notes was $222,000 and $89,000 at December 31, 2011 and 2010, respectively. Note 9 Contingencies The Company is subject to various legal proceedings and claims, which arise in the ordinary course of its business. In the opinion of management, the ultimate liability with respect to those proceedings and claims will not materially affect the financial position, operations or liquidity of the Company. The Company maintains liability insurance coverage for individual claims in excess of various amounts, subject to annual aggregate limits. Note 10 Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and equivalents, and accounts receivable. The Company's cash balance in an individual financial institution, at times, may exceed federally insured limits. The Company has not experienced any losses on these deposits. At December 31, 2011, three customers represented 27 percent of outstanding accounts receivable. At December 31, 2010, three customers represented 25 percent of outstanding accounts receivable. For the year ended December 31, 2011, the three largest clients accounted for 12%, 11% and 7% of revenue, respectively. For the year ended December 31, 2010, the three largest clients accounted for 13%, 11% and 81/6 of revenue, respectively. Demither 31, 2011 and 2010 - 7 - CSG Consultants, Inc. Notes to Consolidated Financial Statements Note 11 Shareowners' Buy Sell Agreement and Purchase of Decreased Shareowner's Stock The Company and its shareowners established an Amended and Restated Buy Sell Agreement (Agreement) dated November 2005 as amended January 2009. The surviving shareowners are obligated to purchase, in the event of death of any shareowner, all of the decedent's outstanding shares. The repurchase price is determined pursuant to a formula provided in the Agreement. The shareowners purchased insurance on the lives of two principal shareowners to help meet its obligation under the Agreement. In August 201.1, the death of the principal shareowner triggered the buy/sell provisions of the Agreement. The Agreement specifies the date of death will serve as the purchase date of the decedent's outstanding shares. The provisions of the Agreement require the Company to purchase the shareowner's stock based on a formula provided in the Agreement, with a minimum payment equal to $4.6 million, the applicable Iife insurance proceeds. Based on the formula in the Agreement, the Company believes the shares will be purchased for the amount of the life insurance proceeds. The Company has tendered payment for the purchase of the deceased shareowner's outstanding shares and has triggered the dispute resolution provisions in the Agreement. Note 12 Settlement with Former Shareowner In April 2011 we settled a dispute with a former Company officer/shareowner in connection with our Amended and Restated Buy Sell Agreement and a claim for wrongful termination. The aggregate settlement was $975,000 (including $75,000 for plaintiff legal expenses). In addition, the Company discharged approximately $72,000 for an outstanding note related to the original grant of stock, and agreed to purchase a note receivable in the approximate amount of $25,000 from its majority shareowner, that was forgiven as part of the settlement. The Company received approximately $531,000 as insurance Proceeds, Approximately $541,000 of the total settlement value was uninsured. We allocated the uninsured amount as follows: $269,000 to repurchase of 7,777 shares of the Company's common stock, $1.97,000 to settle all outstanding claims and $75,000 to plaintiff Iegal expenses. As a result, common stock and additional paid -in capital were reduced by approximately $27,000 and $242,000, respectively at December 2010. General and administrative expenses in 2010 include approximately $272,000 for one-time settlement expenses. Note 12 Subsequent Events The Company has evaluated events and transactions that have occurred after December 31, 2011 through March 31, 2012, the date on wluch the accompanying financial statements were available to be issued, and has deternuned there were no material events to disclose. December 37, 2017 and 2010 - 8 -