HomeMy WebLinkAboutReso 93-20.Rock.Harbor.Lease.Auth (1)RESOLUTION NO. 93-20
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING A 1-YEAR LEASE AGREEMENT FOR
LEASE SPACE B AT 781 MARKET STREET BETWEEN THE CITY OF
MORRO BAY AND TRAVIS FORD, DBA ROCK HARBOR MARKETING
THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, the City of Morro Bay (City) is the lessor of the property at 781 Market
Street, in the City of Morro; and
WHEREAS, Travis Ford, dba Rock Harbor Marketing, (Lessee) is proposing to
lease Space B of the 781 Market Street Building; and
WHEREAS, City and Lessee have agreed to a new 1-year lease agreement, for a
portion of the building located at 781 Market Street identified as Space B.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro
Bay, California, as follows:
1. The attached new Lease Agreement for of Space B in the 781 Market
Street Building Lease is hereby approved.
2. The Mayor is hereby authorized to execute said Lease Agreement.
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular
meeting thereof held on the 10th day of November 2020 on the following vote:
AYES. Headding, Addis, Davis, Heller, McPherson
NOES° None
ABSENT: None
ATTEST:
NA SWANSON, City Clerk
11 1
411111%.::
• N H A a nING, M
COMMERCIAL LEASE AGREEMENT
By and Between
CITY OF MORRO BAY,
a municipal corporation
"Landlord"
and
Travis Ford, dba Rock Harbor Marketing,
a Sole Proprietorship
"Tenant"
01181.0001/535653.1
Section
TABLE OF CONTENTS
Title Page
1. Lease of Premises; Condition of Premises 3
2. Effective Date; Term 4
3. Rent and Performance Standard 5
4. Uses 5
5. Real Estate Taxes 7
6. Personal Property Taxes 8
7. Maintenance & Repairs 8
8. Alterations 10
9. Compliance with Laws 10
10. Insurance 10
11. Indemnification 12
12. No Liens 12
13. Signs 13
14. Utilities 13
15. Entry and Inspection 13
16. Damage and Destruction 14
17. Assignment and Subletting 15
18. Default and Remedies; Termination 16
19. Surrender of Premises 18
20. Force Majeure 18
21. Estoppel Certificate 19
22. Subordination 19
23. Condemnation 19
24. Use of Landlord's Name 19
25. Trade Fixtures 19
26. Quiet Enjoyment 20
27. Recording Memorandum 20
01181.0001/535653.1 1
28. Holdover 20
29. Notice and Waiver Regarding Relocation, Goodwill, Property
Interest and Condemnation 20
30. Miscellaneous 21
Exhibit A Description and Depiction of Premises
01181.0001/535653.1 2
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT ("Lease") is made effective this 11th day
of November, 2020 by and between the CITY OF MORRO BAY, a municipal corporation
("Landlord"), and Travis Ford, dba Rock Harbor Marketing, a sole proprietorship ("Tenant").
Landlord and Tenant are sometimes individually referred to as a ' Party" and jointly as the
Parties "
RECITALS:
A. Landlord owns, certain real property located in the City of Morro Bay, County of
San Luis Obispo, as follows: (i) that certain real property commonly identified as 781 Market
Street, Morro Bay (APN 066-321-027), improved as a commercial building containing two
separate lease space areas and shared bathroom facilities identified as `Space A" and "Space B"
on the Attached Exhibit A, with adjacent landscape areas.
The portion of the building identified as Space B, along with shared use of the bathrooms, as
described and depicted on the attached Exhibit A, is the subject of this Commercial Lease
Agreement, and is also referred to as the Premises."
B. The Premises are located in Landlord's downtown ("Downtown Area").
C. Tenant is a sole proprietor, currently operating a marketing business.
D. The Parties desire to enter into a written lease agreement and to confiiui the rights
and obligations of both Parties therein. Pursuant to the terms of this Lease, Landlord desires to
lease to Tenant, and Tenant desires to lease from Landlord, the Premises for Tenant's sole
exclusive use.
NOW, THEREFORE, in consideration of the above Recitals and the mutual promises of the
Parties set forth in this Lease, Landlord and Tenant hereby agree as follows:
1. LEASE OF PREMISES; CONDITION OF PREMISES.
Lease. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
Premises (as defined m the Recitals incorporated herein) solely for the uses specified
m Section 4.
1.2. Condition of Premises. Tenant acknowledges it has and shall accept the Premises
from Landlord in its "AS IS" condition without representation or warranty. Tenant
has inspected the premises and is aware of its condition. Pursuant to California Civil
Code Section 1938, Tenant is advised the Premises have not undergone an inspection
by a Certified Access Specialist and, therefore, Landlord is not aware if the Premises
comply with the applicable construction -related accessibility standards pursuant to
Civil Code Section 55.53.
01181.0001/535653.1 3
2. EFFECTIVE DATE; TERM.
2.1. Effective Date This Lease shall be deemed effective as of November 11, 2020
("Effective Date") All other Tenant's rights and obligations under this Lease shall
commence as of the Effective Date.
2.2. Term. The term of this Lease shall commence on the Effective Date for a fixed term
of one year and terminate without notice on November 10, 2021 ("Term"), unless
otherwise amended by the Parties pursuant to Sections 2 4 and 29.14.
2.3. Right to Terminate. Tenant shall have the right to terminate this Lease at any time
within the Term upon providing Landlord at least sixty days' written notice to
Landlord.
2.4. Exclusive Right to Negotiate Extension. If Tenant has not been in default of any of
its obligations under this Lease during the previous six months of the original Term
(as defined in Section 2.2), then Tenant shall have the right (but not the obligation) to
enter into a ninety -day period of exclusive negotiation with Landlord to extend this
Lease upon mutually acceptable terms (including, but not limited to, rent payments)
for an additional period up to one year ("ENA Right"). Tenant must exercise the
ENA Right by sending a written notice to Landlord specifying its exercise of the
ENA Right, which notice must be delivered to Landlord not less than ninety days
prior to the expiration of the original Tenn ( `ENA Notice"). Within fifteen business
days after receipt of the ENA Notice, Tenant and Landlord will meet to begin
negotiations for an amendment to this Lease to extend the Term If prior to the end of
the Term the Parties agree to an extension and other modifications, then such terms
shall be effective only if this Lease is amended in accordance with Section 29.14 If
the Parties do not agree to that amendment then this Lease shall terminate without
further notice at the end of the Term
3. RENT & PERFORMANCE STANDARD.
3.1. Monthly Rent. Tenant agrees to pay One Thousand One Hundred Dollars ($1,100)
on a 30-day basis in advance, due no later than the 10 h day of first calendar month of
each the ten calendar months for the 30-day period for which rent is being paid
("Rent"); with the first payment being due on January 10, 2021.
3.2. Performance Standards. As material consideration for this Lease, Tenant covenants
to comply with the following requirement (the "Performance Standard"): diligently
maintain and repair the Premises in compliance with Section 7.1.
3.3. Payment of Rent All Rent and all other monetary obligations to be paid by Tenant
to Landlord shall be in lawful money of the United States of America at the address
specified in Section 29.12, or such other address as Landlord shall notify Tenant in
writing.
3.4. Late Payment. Any payment of any sum to be paid by Tenant, not paid within ten
days after its due date, shall be subject to a ten percent late charge.
01181.0001/535653.1 4
3.5. Security Deposit. Tenant is not required to provide, and has not provided, a security
deposit to Landlord.
4. USES.
4.1. Authorized Uses; Minimum Program Requirements.
4.1.1. Authorized Uses. Tenant shall use the Premises solely as a Commercial
office. As material consideration for this Lease, Tenant agrees to use the
Premises and conduct all its business operations on the Premises under the
designation of a commercial marketing business, currently named 'Rock
Harbor Marketing." No other name shall be used with respect to the
Premises without the prior written consent of Landlord which may be
granted or withheld in its sole discretion.
4.2. Prohibited Uses. Tenant shall not use, or permit the Premises, or any part thereof, to
be used for any purpose or purposes other than those express uses specified in Section
4.1.1.
Tenant shall not sell or permit to be displayed, performed, sold, kept or used in or
about the Premises any conduct which may be prohibited by standard forms of fire
insurance policies.
Tenant shall not violate any and all requirements, pertaining to the use of the
Premises of any insurance organization or company necessary for the maintenance of
reasonable fire and public liability insurance, covering the buildings within the
Premises and appurtenances.
Tenant shall not permit smoking or vaping on any portion of the Premises.
Tenant shall not commit, or suffer to be committed, any waste upon the Premises, or
any nuisance or other act or thing which may disturb the quiet enjoyment of any other
tenant or occupant of the Premises or any adjacent Premises. Tenant shall not conduct
or permit to be conducted any sale by auction in upon or from the Premises whether
said auction be voluntary involuntary, pursuant to any assignment for the payment of
creditors, or pursuant to any bankruptcy or other solvency proceeding nor display any
"going out of business" or similar sign.
Tenant shall not engage in any activity in, on or about the Premises that violates any
Environmental Law, and shall promptly, at Tenant's sole cost and expense take all
investigatory and/or remedial action required or ordered by any governmental agency
or Environmental Law for clean-up and removal of any contamination involving any
Hazardous Material created or caused directly or indirectly, by Tenant. The term
`Environmental Law' shall mean any federal state or local law statute, ordinance or
regulation pertaining to health, industrial hygiene or the environmental conditions on,
under or about the Premises, including, without limitation (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") 42
U.S.C. Sections 9601, et seq.; (ii) the Resource Conservation and Recovery Act of
01181.0001/535653.1 5
1976 ("RCRA"), 42 U.S.C. Sections 6901, et seq ; (iii) California Health and Safety
Code Sections 25100, et seq.; (iv) the Safe Drinking Water and Toxic Enforcement
Act of 1986, California Health and Safety Code Section 25249.5, et seq.; (v)
California Health and Safety Code Section 25359.7 (vi) California Health and Safety
Code Section 25915; (vii) the Federal Water Pollution Control Act 33 U.S.C.
Sections 1317, et seq.; (viii) California Water Code Section 13000, et seq.; and (ix)
California Civil Code Section 3479, et seq., as such laws are amended and the
regulations and administrative codes applicable thereto. The term "Hazardous
Material" includes, without limitation, any material or substance which is (i) defined
or listed as a `hazardous waste", "extremely hazardous waste", "restrictive hazardous
waste", "or ' hazardous substance" or considered a waste, condition of pollution or
nuisance under the Environmental Laws; (ii) petroleum or a petroleum product or
fraction thereof; (iii) asbestos; and/or (iv) substances known by the State of California
to cause cancer and/or reproductive toxicity. It is the intent of the Parties hereto to
construe the twins "Hazardous Materials" and ' Environmental Laws" in their
broadest sense. Tenant shall provide all notices required pursuant to the Safe
Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety
Code Section 25249.5 et seq. Tenant shall provide prompt written notice to Landlord
of the existence of Hazardous Materials on the Premises and all notices of violation of
the Environmental Laws received by Tenant. Notwithstanding the foregoing Tenant
is not responsible for the remediation or removal of any Hazardous Materials which
Tenant did not directly or indirectly cause to be placed at the Premises.
4.3. Abandonment. Tenant shall not vacate or abandon the Premises at any time during
the Term of this Lease. Upon termination of this Lease for any reason any personal
property belonging to Tenant and left on the Premises shall be deemed to be
abandoned, at the option of Landlord, shall become the property of Landlord.
5. REAL ESTATE TAXES Tenant shall pay any and all real property taxes applicable to
Tenant's possessory interest in the Premises. All such payments shall be made at least ten
days prior to the due date of the applicable installment. Tenant shall promptly (at least five
days prior to the due date) furnish Landlord with satisfactory evidence such taxes have been
paid If any such taxes to be paid by Tenant shall cover any period of time after the
expiration or earlier termination of the Tenn hereof, then Tenant s share of such taxes shall
be equitably prorated to cover only the period of time within the tax fiscal year that this
Lease is in effect; and Tenant may apply to the County of San Luis Obispo (the "County")
for reimbursement of any overpayments after such proration. Notwithstanding anything
above to the contrary, to the extent any assessment is levied against the Premises payable in
installments, Tenant shall pay all installments coming due and payable during the Term of
this Lease.
Tenant acknowledges, although Landlord is a municipal entity exempt from real property
taxes, Tenant's possessory interest under this Lease may be subject to real property taxation
Upon request, Landlord agrees to work with Tenant to assist in providing information to the
County Tax Assessor to reduce the valuation of Tenant's possessory interest in the Premises.
01181.0001/535653.1 6
Landlord provides no assurance to Tenant that it will be successful in such efforts and that
Tenant may be required to pay real property taxes.
6. PERSONAL PROPERTY TAXES. During the Term, Tenant shall pay prior to
delinquency all taxes assessed against the levied upon fixtures, furnishings, equipment and
all other personal property owned by Tenant (excluding Landlord s personal property)
located in the Premises, and when possible Tenant shall cause said fixtures, furnishings
equipment and other personal property to be assessed and billed separately from Landlord's
personal property In the event any or all of Tenant s fixtures, furnishings equipment and
other personal property shall be assessed and taxed with Premises, Tenant shall pay its share
of such taxes within ten days after delivery to Tenant by Landlord of a statement in writing
setting forth the amount of such taxes applicable to Tenant's property.
7. MAINTENANCE AND REPAIRS.
7.1. Maintenance and Repair by Tenant. Except the specific maintenance obligations
of Landlord as set forth in Section 7.2, Tenant shall at all times during the Tenn and
at Tenant's sole cost and expense, keep, maintain and repair the Premises in good and
sanitary order condition, and repair. Such maintenance obligations shall include but
not be limited to, any equipment installed by Tenant, furnishings (such as seating,
carpeting and drapes, mirrors, and interior repainting) and landscaping.
Tenant shall also hire a cleaning service/custodian, who shall keep the Premises in
good and sanitary order on a daily basis.
Tenant shall maintain a written record to evidence the regular performance of
maintenance and upkeep of the facility consistent with the maintenance standards.
Upon termination of this Lease, the Premises shall be surrendered in a good, clean
and sanitary condition except for reasonable use and wear. Tenant agrees to surrender
the Premises in its original condition, together with all additional improvements or
alternations, which have been approved by Landlord and installed by Tenant pursuant
to Section 8.1 If Landlord wants to reserve the right to require Tenant to remove any
such additional improvements upon the expiration or earlier termination of this Lease,
then Landlord must reserve such right in its notice of approval If Tenant is required
to remove any improvements from the Premises upon termination of this Lease then
Tenant shall do so at Tenant s sole cost and expense, and Tenant will repair any
damage to the Premises caused by such removal. Tenant shall promptly notify
Landlord in writing of any condition in the Premises that require repairs by Landlord
("Repair Notice"), which shall be made by Landlord as set forth in Section 7.2.
Tenant acknowledges Tenant s maintenance obligations under this Section are
material considerations to Landlord for this Lease and, therefore this Section shall be
construed liberally for the protection and preservation of the Premises
7.2. Limited Maintenance and Repair by Landlord Landlord shall be responsible to
maintain in good repair and in compliance with all apphcable laws ordinances and
regulations, at Landlord's sole cost and expense, only (i) the physical structure of the
01181.0001/535653.1 7
Premises, such as the structural elements, roof, plumbing, water heating system,
electrical systems, HVAC equipment and exterior painting, and (ii) subject to the
financial limitations set forth below.
Notwithstanding the foregoing, Landlord shall not be required to make repairs
necessitated by reason of (i) the negligence or willful misconduct of Tenant, or any of
Tenant s staff, volunteers, students, contractors invitees, subtenants, patrons or
customers, (ii) the failure of Tenant to perform or observe and promptly report to
Landlord any conditions the repair of which are Landlord's responsibility or (iii) the
failure of Tenant to perform or observe the conditions or agreements in this Lease, or
caused by unauthorized alterations, additions or improvements made by Tenant or
anyone claiming under Tenant (collectively the "Tenant Caused Damages' ). Tenant
shall be solely responsible, at its sole cost and expense, to repair any Tenant Caused
Damages.
Upon receipt of a Repair Notice, Landlord shall have a reasonable period of time (not
to exceed five business days) to commence said repairs. Upon commencement of
repairs, Landlord shall use reasonable efforts to diligently complete same. Tenant
and Landlord shall jointly conduct an annual inspection of the Premises every April
to aid Landlord in determining if any repairs by Landlord may be necessary.
Any renovation work performed by Landlord to the Premises shall not unreasonably
interfere with Tenant's operations
Notwithstanding the foregoing, Landlord's repair obligations are specifically limited
in that Landlord shall not be required to make repairs the cost of which exceeds the
Rent actually received by Landlord from Tenant as set forth below. During the Term,
Landlord shall maintain a cumulative on -going record of all Rent received by
Landlord (` Landlord Repair Fund"). Any repairs and maintenance costs incurred
by Landlord under this Section shall reduce the Landlord Repair Fund. If at any time
when a repair or maintenance item, which is Landlord's responsibility under this
Section, then Landlord shall only be obligated to make such repair to the extent the
current balance of the Landlord Repair Fund is sufficient to pay the cost of such
repair. However, if the repair item is critical for Tenant's operation of the Premises,
then Landlord shall promptly make such repair, but the cost of such shall reduce the
Landlord Repair Fund If Landlord elects, in its sole discretion, to make repairs
notwithstanding the foregoing limitations then such election shall not be deemed a
waiver of this limitation with respect to future repairs and the cost of such repairs
shall reduce the Landlord Repair Fund.
01181.0001/535653.1 8
8. ALTERATIONS
8.1 To Premises. Tenant shall not make any alterations to the Premises, or any part
thereof, without the prior written consent of Landlord. If Tenant wishes to make
additional improvements to the Premises, then Tenant shall notify Landlord in writing
specifying in reasonable detail the proposed •alterations and the cost thereof. Within
fifteen days after receiving such notice from Tenant, Landlord shall send written
notice to Tenant indicating whether Landlord approves or disapproves of the
contemplated improvements. The City Manager may act on behalf of Landlord for
approvals or disapprovals under this Section Landlord's approval shall not be
unreasonably withheld and any disapproval shall be in writing and shall explain the
reasons for the denial. However, as a condition to granting its approval to any of the
improvements, Landlord may require Tenant to provide Landlord with reasonably
satisfactory evidence of Tenant s financial ability to pay for the costs of the
improvements and may require a completion bond be provided to Landlord or other
security reasonably acceptable to Landlord Any such alterations shall comply with
all applicable laws and regulations. All improvements (excluding minor
improvements as determined by Landlord) shall be under the supervision of a
licensed architect or structural engineer (at Tenant's cost) and made in accordance
with plans and specifications approved in writing by Landlord, in its governmental
and landlord capacities, prior to the commencement of such work. All work shall be
done in a good and workmanlike manner, diligently prosecuted to completion and
completed in compliance with Section 12. All such improvements shall immediately
be deemed a part of the Premises and may not be removed by Tenant Prior to
commencing any work of improvement hereunder, Tenant shall notify Landlord so
that Landlord can post and record an appropriate Notice of Non -Responsibility
9. COMPLIANCE WITH LAWS. Except as to the specific obligations of Landlord under
Section 7 2, Tenant shall, at its sole cost and expense, comply with all of the requirements of
all municipal, state and federal authorities now in force or which may hereafter be in force
pertaining to the use of the Premises, and shall faithfully observe in said use all municipal
ordinances including, but not limited to, the General Plan and zoning ordinances, state and
federal statutes or other governmental regulations now in force or which shall hereinafter be
in force. The judgment of any court of competent jurisdiction or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such order or statute in said use shall be conclusive of that fact as
between Landlord and Tenant.
10. INSURANCE.
10.1. Landlord to Provide Property Insurance Landlord shall maintain, at Landloid's
sole cost and expense, fire, and excess coverage insurance throughout the term of this
Lease, on all buildings and improvements located on the Premises (and fixtures
thereto), in an amount equal to one hundred percent of the replacement value of the
Premises, together with such other insurance, coverages and endorsements as
Landlord may determine in its sole discretion Tenant hereby waives any right of
recovery from Landlord, its officers and employees, and Landlord hereby waives any
01181.0001/535653.1 9
right of loss or damage (including consequential loss) resulting from any of the perils
insured against as a result of said insurance.
10.2. Tenant's Insurance Obligations.
10.2.1. Liability Insurance. During the entire term of this Lease, Tenant shall, at
Tenant's sole cost and expense, for the mutual benefit of Landlord and
Tenant, maintain comprehensive general liability insurance insuring
against claims for bodily injury, death or property damage occurring in,
upon or about the Premises, written on a per occurrence basis in an
amount not less than either (i) a combined single limit of Five Million
Dollars ($5,000,000) for bodily injury, death, and property damage or (ii)
bodily injury limits of Five Hundred Thousand Dollars ($500,000) per
person, One Million Dollars ($1,000,000) per occurrence and One Million
Dollars ($1,000 000) products and completed operations and property
damage limits of Two Hundred Fifty Thousand Dollars ($250,000) per
occurrence and One Million Dollars ($1,000,000) in the aggregate
10.2.2. Worker's Compensation Insurance. Tenant shall, at Tenant's sole cost
and expense, maintain a policy of worker's compensation insurance in an
amount as will fully comply with the laws of the State of California and
which shall indemnify, insure and provide legal defense for both Tenant
and Landlord against any loss, claim or damage arising from any injuries
or occupational diseases occurring to any worker employed by or any
persons retained by Tenant in the course of conducting Tenant's business
in the Premises.
10.2.3. Business Automobile Coverage Insurance Tenant shall, at Tenant's
sole cost and expense, for the mutual benefit of Landlord and Tenant,
maintain Business Auto Coverage on ISO Business Auto Coverage from
CA 00 01 including symbol 1 (Any Auto) or the exact equivalent, with
combined single limits of liability not less than One Million Dollars
($1,000,000) per accident. If Tenant owns no vehicles, then this
requirement may be satisfied by a non -owned auto endorsement to the
general liability policy described above If Tenant or Tenant's employees
will use personal autos in any way for the operation of any business on the
Premises, then Tenant shall provide evidence of personal auto liability
coverage for each such person
10.2.4. General Provisions. All of the policies of insurance required to be
procured by Tenant pursuant to this Section 10.2 shall be primary
insurance and pursuant to Subsections 10.2.1 and .3 shall name Landlord,
its employees and agents as additional insureds All policies shall waive
all rights of subrogation and provide that said insurance may not be
amended or canceled without providing thirty -days' prior written notice
by registered mail to Landlord, unless the cancellation is for non-payment
of a premium and then such written notice shall be no less than ten days
01181.0001/535653.1 10
Within ten business days after execution of this Lease by the last Party to
sign, and at least thirty days prior to the expiration of any insurance
policy, Tenant shall provide Landlord with certificates of insurance and
full copies of the insurance policies evidencing the mandatory insurance
coverages written by insurance companies acceptable to Landlord,
licensed to do business in California and rated A:VII or better by Best's
Insurance Guide. Landlord may require an increase in the coverage and/or
the types of coverage from time to time upon written notice to Tenant.
Each of the Parties, on behalf of their respective insurance companies
insuring such property of either Landlord or Tenant against such loss,
waive any right of subrogation that it may have against the other.
11. INDEMNIFICATION. Tenant shall indemnify, protect, defend and hold harmless the
Premises, Landlord and its managers, officers, directors, members, employees, agents,
contractors partners and lenders, from and against any and all claims, and/or damages,
costs, liens, judgments, penalties, permits reasonable attorneys' and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the occupancy of the
Premises by Tenant, the conduct of Tenant s business, any act, omission or neglect of
Tenant, its officers, directors, members, employees, agents or contractors, and out of any
breach by Tenant in the perfouunance in a timely manner of any obligation on Tenant's part
to be performed under this Lease except for matters which are the result of Landlord's gross
negligence, intentional wrongful acts or in default of this Lease. The foregoing shall
include, but not be limited to, all costs of the defense or pursuit of any claim or any action or
proceeding involved therein, and whether or not (in the case of claims made against
Landlord) litigated and/or reduced to judgment In case any action or proceeding is brought
against Landlord by reason of any of the foregoing matters, Tenant upon notice from
Landlord shall defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord and Landlord shall cooperate with Tenant in such defense. Landlord need not
have first paid any such claim in order to be so indemnified In addition, Landlord may
require Tenant to pay Landlord's reasonable attorneys fees and costs in defending against
or participating in such claim, action or proceeding if Landlord shall decide, in its exercise
of reasonable judgment, it is unsatisfied with the representation of its interest by Tenant or
its counsel
Landlord shall not be liable for injury or damage to the person or goods, wares, merchandise
or other property of Tenant Tenant's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused by or results
from fire, earthquake, flood, terrorism, steam, electricity, gas, water or ram or from the
breakage, leakage, obstruction or other any other cause, whether the said injury or damage
results from conditions arising upon the Premises or from other source or places except if
such injury or damage is the result of the gross negligence or willful misconduct of Landlord
or Landlord's employees, contractors or agents.
12. NO LIENS. Tenant shall keep the Premises, free from any liens arising out of any work
performed, material furnished, or obligation incurred by Tenant or alleged to have been
incurred by Tenant. If Tenant shall fail to pay any charge for which a mechanic s lien claim
and suit to foreclose the lien have been filed, and shall not have obtained the release of said
01181.0001/535653.1 11
lien from the property subject to such lien, then Landlord may (but shall not be so required
to) pay said claim and any costs, and the amount so paid, together with reasonable attorneys
fees incurred in connection therewith, shall be immediately due and owing from Tenant to
Landlord, together with interest at the rate prescribed in Section 29.5, on the amount of the
mechanic's lien claim.
13. SIGNS. Tenant shall not place or permit to be placed any signs upon the exterior or in the
windows of the Premises without Landlord's prior written consent. Any sign installed
without such approval shall be immediately removed by Tenant and, if said sign is not
removed by Tenant within three days of written notice from Landlord to Tenant, then
Landlord may remove and destroy said sign without Tenant's approval and without any
liability to Tenant Tenant shall not modify or alter any of the signs without the prior written
approval of the City Manager for Landlord, which approval shall not be unreasonably
withheld or delayed Landlord shall reply to any proposed alteration within fourteen days
from submission. Any revision shall comply with the Morro Bay Municipal Code
requirements related to signage prior to any revisions actually being made to the signs.
Tenant shall maintain the signs in good condition and repair at all times during the entire
term at its sole cost and expense.
14. UTILITIES.
14.1. Tenant's Responsibilities. Tenant shall pay, before delinquency, all charges for
water gas, heat, electricity, power sewer, telephone service, solid waste collection
and all other services and utilities used in, upon, or about the Premises by Tenant or
any of its subtenants, licensees, or concessionaires during the entire teim of this
Lease. Tenant shall pay such fees, assessments or charges as may be levied for the
operation, maintenance and service of such facilities and shall comply with
reasonable rules and regulations established from time to time for use thereof Tenant
shall insure that trash and debris produced by the activities on Premises do not
accumulate on the Premises.
15. ENTRY AND INSPECTION. Tenant shall perrrut Landlord and its employees and agents
to enter into and upon the Premises at all reasonable times for the purpose of inspecting the
same or for the purpose of making repairs, alterations or additions or performing the
improvements to any portion of said building(s), including the erection and maintenance of
such scaffolding, canopy, and fences as may be required, or for the purpose of posting
notices of non -responsibility for alterations additions or repairs, or for the purpose of placing
upon the Premises any usual or ordinary signs for public safety as determined by Landlord.
Landlord shall be permitted to do any of the above without any rebate of Rent and without
any liability to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned. Landlord shall make reasonable efforts to coordinate times for any repairs
deemed necessary with Tenant to reduce to the extent practicable any interference with
Tenant s use of the Premises. Tenant shall permit Landlord, at any time within ninety days
prior to the expiration of the Term, to place upon the Premises any usual or ordinary ' For
Lease ' or "For Sale" signs, and during such ninety -day period, Landlord or its agents may,
during normal business hours, enter upon said Premises and exhibit the same to prospective
tenants or purchasers.
01181.0001/535653.1 12
16. DAMAGE AND DESTRUCTION.
16.1. Notice to Landlord. Tenant shall give prompt notice to Landlord in case of any fire
or other damage to the Premises.
16.2. Partial Casualty to Premises. If the Premises shall be damaged by any casualty
including, but not limited to, civil unrest vandalism, a fire, flood or earthquake, such
that (i) the cost of replacement or repair of the Premises is less than or equal to fifty
percent of the total replacement cost thereof or (ii) the cost of replacement or repair
of damage to the Premises, and any structures comprising the Premises, when
aggregated together is less than or equal to fifty percent of the total replacement cost
thereof, then Landlord shall promptly repair and restore the same to substantially the
condition thereof immediately prior to said damage or destruction If insurance
proceeds are forthcoming, then Landlord shall not be obligated to commence the
restoration and/or repair until Landlord has received said insurance proceeds.
Landlord shall take all reasonable steps necessary so as to obtain such insurance
proceeds promptly so as to prevent delay in restoring and/or repairing the Premises to
its prior condition.
16.3. Substantial Damage to Premises. If the Premises shall be damaged or destroyed by
any casualty (or the other matters described above), such that (i) the cost of
replacement or repair of the Premises exceeds one -years' rent or (ii) the cost of
replacement or repair of damage to the Premises, and any of the other structures
comprising the Premises, when aggregated together exceeds one -years' rent total,
then Landlord may elect to either replace or repair the damage as aforesaid, cancel
this Lease by written notice of cancellation given to Tenant within ninety days after
the date of the casualty, or allow Tenant to cause repairs to be made to City standards.
This Lease shall cease and terminate twenty days following Tenant's receipt of
Landlord's cancellation notice, and Tenant shall vacate and surrender the Premises to
Landlord in accordance with the terms of this Lease.
16.4. Reconstruction. In the event of any reconstruction of the Premises under Section 16,
Landlord shall be obligated to reconstruct the Premises only to the extent of the
condition of the Premises prior to the damage
16.5. Rent Abatement. In the event any casualty to the Premises is such that operations
are impossible or impractical during the reconstruction as determined by Tenant,
Tenant shall be entitled to abatement of the Rent for actual number of business days
closed based on a pro-rata ratio of the total days in the month.
16.6. Termination Upon any termination of this Lease under any of the provisions of
Section 16, the Parties shall be released thereby without further obligations to the
other Party coincident with the surrender of possession of the Premises to Landlord
except for obligations which have theretofore accrued and be then unpaid, and except
for Tenant's obligations under Section 11.
01181.0001/535653.1 13
16.7. Determination of Percentage of Damage or Destruction. If either Landlord or
Tenant contends the percentage of the damage or destruction referred to above
exceeds one -year's rent total and the other Party disagrees, then the determination of
the percentage shall be made in writing by a senior officer of the insurance company
that is to make insurance proceeds available for replacement or repair If said
insurance company elects not to render such a determination in a timely manner, or
no determination is rendered for any other reason then, in such event, upon fifteen -
days' prior written notice to Tenant, then Landlord s determination shall be deemed
the agreed upon determination of the damage or destruction
17. ASSIGNMENT AND SUBLETTING.
17.1. Assignment and Subletting. Tenant shall not sublet the Premises or assign this
Lease without the prior written consent of Landlord Landlord shall not unreasonably
withhold its consent to an assignment or sublease to a proposed assignee or subtenant.
In no event shall Landlord be required to approve of any assignment or sublease,
which would result in a violation of any other agreements to which Landlord is a
party and/or for which all of the following criteria are not met•
a. The proposed assignee or subtenant has submitted to Landlord financial
statements showing the proposed assignee's or subtenant's financial
condition, including net worth and liquidity, is equal to or greater than
Tenant's financial condition;
b. The proposed assignee or subtenant is morally and financially responsible;
and
c. Tenant is not in default in the payment of Rent or the performance of any
obligations under this Lease.
Any such assignment shall be subject to all of the terms and conditions of this Lease,
including, but not limited to, the use restrictions, and the proposed assignee or
subtenant shall assume the obligations of Tenant under this Lease in writing in form
satisfactory to Landlord The proposed assignee or subtenant shall simultaneously
provide to Landlord an estoppel certificate in the form described in Section 21.
Consent by Landlord to one assignment or subletting shall not be deemed to be
consent to any subsequent assignment or subletting Any assignment or subletting
without the prior written consent of Landlord shall be void, shall constitute a material
breach of this Lease, and shall, at the option of Landlord, terminate this Lease
Neither this Lease nor any interest therein shall be assignable as to the interest of
Tenant by operation of law.
Landlord shall be under no obligation to consider a request for its consent to an
assignment or sublease until Tenant shall have submitted in writing to Landlord a
request for Landlord's consent to such assignment or sublease a history of the
proposed assignee's or subtenant's business experience and financial viability and
01181.0001/535653.1 14
such other infoimation as required by Landlord to verify that the criteria set forth
herein are met
18. DEFAULT AND REMEDIES; TERMINATION.
18.1. Default by Tenant. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant:
(i) Failure to pay any Rent or other monetary payment required hereunder to
Landlord within five days after receiving notice from Landlord of
Tenant's failure to pay any such obligation when due under this Lease.
(ii) Failure to perform any provision of this Lease (other than the payment of
money) if the failure to perform is not cured within thirty days after
receiving written notice of the default from Landlord If the default cannot
be reasonably cured within thirty days, then Tenant shall not be in default
of this Lease if Tenant commences to cure the default within the thirty -day
period and diligently and in good faith continues to cure the default, but
within no more than one hundred eighty days from commencement of the
cure.
(iii) Failure of Tenant to meet or comply with the Performance Standard.
(iv) Vacation or abandonment of the Premises by Tenant.
(v) Making a general assignment for the benefit of creditors.
(vi) Filing of a voluntary petition in bankruptcy or the adjudication of Tenant
as a bankrupt.
(vii) Appointment of a receiver to take possession of all or substantially all the
assets of Tenant located at the Premises or of Tenant's leasehold interest
in the Premises.
(viii) Filing by any creditor of Tenant of an involuntary petition in bankruptcy
which is not dismissed within sixty days after filing.
(ix) Attachment, execution or other judicial seizure of all or substantially all of
the assets of Tenant or Tenant's leasehold where such an attachment,
execution or seizure is not discharged within sixty days.
In the event of any such default or breach by Tenant, Landlord may at any
time thereafter, without further notice or demand, rectify or cure such default and any
sums expended by Landlord for such purposes shall be paid by Tenant to Landlord
upon demand and as additional Rent hereunder. In the event of any such default or
breach by Tenant Landlord shall have the right to continue the lease in full force and
effect and enforce all of its rights and remedies under this Lease, including the right
to recover the Rent as it becomes due under this Lease of Landlord shall have the
01181.0001/535653.1 15
right at any time thereafter to elect to terminate the Lease and Tenant's right to
possession thereunder. Upon such termination, Landlord shall have the right to
recover from Tenant:
(a) The worth at the time of award of the unpaid Rent which
had been earned at the time of termination;
(b) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; and
(c) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such Rent loss that Tenant proves could be reasonably avoided.
The "worth at the time of award" of the amounts referred to in subparagraphs
(a), b), and (c) above shall be computed by allowing interest (or by discounting in the
case of subparagraph (c)) at three percent over the prime rate, but in no event greater
than the maximum rate permitted by law.
"Rent" shall include all sums payable pursuant to this Lease on a regular basis;
including reimbursement of real estate taxes and any similar amounts. The payment
shall be computed on the basis of the average monthly amount thereof accruing
during any preceding twelve-month period selected by Landlord, except that if it
becomes necessary to compute such Rent before such a twelve-month period has
occurred, then such Rent shall be computed on the basis of the average monthly
amount hereof accruing during such shorter period.
Such efforts as Landlord may make to mitigate the damages caused by Tenant' s
breach of this Lease shall not constitute a waiver of Landlord's right to recover
damages against Tenant hereunder.
Notwithstanding any of the foregoing, the breach of this Lease by Tenant, or an
abandonment of the Premises by Tenant, shall not constitute a termination of this
Lease, or of Tenant's right of possession hereunder, unless and until Landlord elects
to do so, and until such time Landlord shall have the right to enforce all of its rights
and remedies under this Lease, including the right to recover rent, and all other
payments to be made by Tenant hereunder, as they become due. Failure of Landlord
to terminate this Lease shall not prevent Landlord from later terminating this Lease or
constitute a waiver of Landlord's right to do so.
18.2. No Waiver. Acceptance of any payment under this Lease shall not be deemed a
waiver of any default or a waiver of any of Landlord's remedies
18.3. Landlord's Default. Except as may be elsewhere expressly provided in this Lease,
Landlord shall not be in default, unless Landlord fails to perform obligations required
of Landlord within a reasonable time, but in no event later than thirty days after
01181.0001/535653.1 16
written notice by Tenant to Landlord, specifying wherein Landlord has failed to
perform such obligation; provided, however, that if the nature of Landlord's
obligation is such that more than thirty days are required for performance, then
Landlord shall not be deemed in default if Landlord commences performance within
that thirty -day period and thereafter diligently prosecutes the same to completion.
18.4. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive
but shall, wherever possible, be cumulative with all other remedies at law or in
equity, except Tenant i) cannot seek money damages or pursue an action in law; and
ii) is instead limited to bringing a proceeding in the nature of specific performance,
injunctive relief or mandamus, or any other action in equity to enforce any applicable
provision of this Lease.
18.5. Termination.
18.5.1. The Parties acknowledge this Lease shall be terminated immediately at the
occurrence of any of the following events:
a. By expiration of the Lease;
b. By mutual agreement of both Parties; or
c In the case of casualty as provided for in Section 16.6.
18.5.2. The Parties acknowledge this Lease may be terminated by Landlord upon
five -days' written notice if Tenant fails to meet the Performance Standard
18.5.3. Except as set forth in Section .2.3, termination of this Lease shall not
extinguish Tenant s obligations to pay Rent or its other obligations
including indemnification of Landlord.
19. SURRENDER OF PREMISES The voluntary or other surrender of the Premises by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall at the option of
Landlord, terminate all or any existing subleases or licensees, or may, at the option of
Landlord, operate as an assignment to it of any or all of such subleases or licenses
20. FORCE MAJEURE If either Party hereto shall be delayed or prevented from the
performance of any act required hereunder by reason of acts of God, strikes, lockouts, labor
troubles, inability to procure materials, restrictive governmental laws or regulations or other
cause without fault and beyond the control of the Party obligated (financial inability
excepted), then performance of such act shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, nothing in this Section shall excuse Tenant from
the prompt payment of any Rent.
21. ESTOPPEL CERTIFICATE Tenant shall, at any time and from time to time upon not
less than twenty -days' prior notice from Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying this Lease is unmodified and is in full force and
01181.0001/535653.1 17
effect and the dates to which the Rent has been paid, and stating whether or not to the best
knowledge Landlord is in default under this Lease, and, if in default, specifying in
reasonable detail each such default, and such other matters as Landlord may reasonably
request, it being intended that any such statement delivered by Tenant may be relied upon by
Landlord or any prospective purchaser of the fee or any prospective mortgagee or
encumbrancer thereof
If Landlord desires to refinance or transfer the Premises, then Tenant agrees to deliver to
Landlord or any lender or transferee designated by Landlord such financial information
concerning Tenant as may be reasonably required by such lender or transferee and is
reasonably available to Tenant. All such fmancial information shall be received by
Landlord in confidence.
22. SUBORDINATION. The rights of Tenant shall be and are subject and subordinate at all
times to the lien of any mortgage now or hereafter in force against the Premises, and Tenant
shall promptly execute and deliver such further instruments subordinating this Lease to the
lien of any such mortgage as shall be requested by Landlord
23. CONDEMNATION In the event a condemnation or transfer in lieu thereof results in a
taking of any substantial and/or material portion of the Premises, Landlord or Tenant may,
upon written notice given to the other Party within thirty days after such taking or transfer in
lieu thereof, terminate this Lease. In connection therewith, Landlord and Tenant
acknowledge that:
a. Landlord (acting as the City of Morro Bay) possesses the power to take the
Premises through eminent domain proceedings; and
b. The business to be conducted by Tenant upon the Premises is not a viable
business without financial assistance from Landlord, therefore if Tenant must
vacate the Premises, it will be extremely impractical, if not impossible, for
Tenant to operate its business elsewhere.
Therefore, upon such termination Tenant shall have the right to claim and recover from
Landlord and/or the condemning authority only the amount equal to the value of any
improvements installed by Tenant Tenant shall not receive any value related to the
leasehold value of the property which shall be paid solely to Landlord
24. USE OF LANDLORD'S NAME. Tenant shall not use Landlord's name for advertising or
promotion without Landlord's prior written consent, which may be granted or withheld in its
sole discretion
25. TRADE FIXTURES Tenant has the right to use the Landlord's personal property located
on the Premises, but Tenant shall at its own cost and expense, install and equip the Premises
with all furniture, fixtures, trade fixtures, equipment and personal property reasonably
required for the operation of Tenant's business Any and all fixtures and appurtenances
installed by Tenant shall conform with the requirements of all applicable laws and
regulations. All furniture equipment, and trade fixtures installed by Tenant shall remain the
property of Tenant during the Term of this Lease, but Tenant shall not remove any trade
01181.0001/535653.1 18
fixtures during the Term hereof without Landlord's prior written consent, which may be
provided by the City Manager on behalf of the Landlord and which consent may be
withheld or granted in Landlord's sole discretion On termination of this Lease Tenant may,
provided Tenant is not in default of this Lease, remove at its own expense all trade fixtures,
equipment and its personal property At termination of this Lease, if Tenant has left any
merchandise, furniture, equipment signs, trade fixtures or other personal property in the
Premises, then Landlord may give Tenant written notice to remove such property. In the
event such property is not removed within fifteen days after the date of said notice, Landlord
may dispose of said property in any manner whatsoever and Tenant hereby waives any
claim or right to said property or any proceeds derived from the sale thereof. Any damage to
the Premises resulting from the installation or removal of any of said trade fixtures or
equipment shall be repaired by Tenant at Tenant's sole cost and expense
26. QUIET ENJOYMENT. As long as Tenant is not in default under this Lease, Tenant shall
have quiet enjoyment of the Premises during the Term.
27. HOLDOVER. Tenant has no right to retain possession of the Premises or any part thereof
beyond the expiration or earlier teinnination of this Lease. Any holding over after the
expiration of the term of this Lease, with the consent of Landlord, express or implied, shall
be construed to be a tenancy from month to month, cancelable upon thirty -days' written
notice, and at a monthly rent equal to two hundred percent of the rent set forth in Section 3.1
and upon terms and conditions as existed during the last month of the Term.
28. NOTICE AND WAIVER REGARDING RELOCATION, GOODWILL, PROPERTY
INTEREST AND CONDEMNATION
28.1. Tenant knowingly and voluntarily acknowledges and agrees upon its vacation of the
Premises at the end of the Lease term, upon the sooner termination thereof for any
reason, or vacation of the Premises under any circumstances, in no event shall Tenant
be entitled or shall Landlord, including its employees, agents and assignees, be
required to provide any relocation benefits, compensation for loss of goodwill or
assistance under any applicable federal, state, or local laws or regulations including
without limitation, the Uniform Relocation Assistance Laws, California Government
Code section 7260 et seq. Further, Tenant being fully informed of any and all of its
rights and obligations and all laws and regulations (mcluding without limitation, the
Uniform Relocation Assistance Laws, California Government Code section 7260 et
seq.) in connection therewith fully waives releases and rejects any and all relocation
assistance and benefits relating to or in any respect connected with Tenant vacating
the Premises.
28.2. Tenant knowingly and voluntarily acknowledges and agrees upon its vacation of the
Premises at the end of the Term upon the sooner termination thereof for any reason,
or vacation, of the Premises under any other circumstances, in no event shall Tenant
be entitled or shall Landlord be required to provide any compensation or
consideration to Tenant for the leasehold interest of Tenant, improvements pertaining
to realty, personal property fixtures and equipment, pre -condemnation damages,
severance damages or interest and litigation expenses, whether based on
01181.0001/535653.1 19
condemnation, inverse condemnation or any other reason Upon vacation of the
Premises or termination of the Lease, Tenant knowingly waives and surrenders any
claims or rights to the leasehold interest, improvements pertaining to realty, personal
property, fixtures and equipment, pre -condemnation damages, severance damages or
interest and litigation expenses
29. MISCELLANEOUS.
29.1. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their
successors and assigns and be governed by the laws of the State of California Any
litigation between the Parties hereto concerning this Lease shall be imtiated in the
Superior Court of the State of California for the County.
29.2. Partial Invalidity. If any term, covenant, condition or provision of this Lease is
held by a court of competent jurisdiction to be invalid, void, or unenforceable, then
the remainder of the provisions hereof shall remain m full force and effect and shall
in no way be affected, impaired or invalidated thereof.
29.3. Successors in Interest. The covenants herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all the Parties hereto and each and all, including the
Party making the assignment, shall be jointly and severally liable hereunder.
29.4. No Oral Agreements. This Lease covers in full each and every agreement of every
kind or nature whatsoever between the Parties hereto concerning this Lease, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein, and there are no oral agreements. Tenant acknowledges no representations or
warranties of any kind or nature not specifically set forth herein have been made by
Landlord or its employees, agents or representatives.
29.5. Interest. Any sum due to Landlord under this Lease shall bear simple interest from
and after its due date at a rate equal to ten percent per month until paid to Landlord,
but not in excess of the maximum rate permitted by law.
29.6. Authority. Each individual executing this Lease on behalf of Tenant represents and
warrants that he or she is duly authorized to execute and deliver this Lease on behalf
of Tenant and that this Lease is binding upon Tenant in accordance with its terms.
29.7. Time. Time is of the essence of this Lease.
29.8. Consistency. Each provision herein shall be interpreted so as to be consistent with
every other provision.
29.9. Relationship of Parties. The relationship of the Parties is that of Landlord and
Tenant, and it is expressly understood and agreed Landlord does not in any way or
for any purpose become a partner of Tenant in the conduct of Tenant's business or
otherwise, or a joint venture with Tenant.
01181.0001/535653.1 20
29.10. Non -Discrimination. Tenant herein covenants by and for Tenant, Tenant's
successors, heirs, executors, administrators and assigns, and all persons claiming
under or through Tenant, and this Lease is made and accepted upon and subject to
the following conditions: that there shall be no discrimination against or segregation
of any person or group of persons, on account of race, color, creed, religion, sex,
marital status, national origin, sexual preference or identity or ancestry, in the
leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the
Premises, nor shall the Tenant, or any person claiming under or through Tenant,
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
Tenants, subtenants, subtenants or vendees of the Premises.
29.11. Non -Collusion. No official, officer, or employee of Landlord has any financial
interest, direct or indirect, in this Lease, nor shall any official, officer, or employee
of Landlord participate in any decision relating to this Agreement which may affect
his/her financial interest or the financial interest of any corporation, partnership, or
association in which (s)he is directly or indirectly interested, or in violation of any
interest of any corporation, partnership, or association in which (s)he is directly or
indirectly interested, or in violation of any State or municipal statute or regulation.
The determination of "financial interest" shall be consistent with State law and shall
not include interest found to be "remote" or non interest pursuant to California
Government Code Sections 1091 and 1091.5. Tenant represents and warrants that (i)
it has not paid or given, and will not pay or give, to any third party including, but
not limited to Tenant or any of its officials, officers, or employees, any money
consideration, or other thing of value as a result or consequence of obtaining this
Lease and (ii) it has not engaged in any act(s) omission(s), or other conduct or
collusion that would result in the payment of any money, consideration, or other
thing of value to any third party including, but not limited to, any official, officer or
employee of Landlord, as a result or consequence of obtaining this Lease. Tenant is
aware of and understands that any such act(s), omission(s) or other conduct
resulting in the payment of money, consideration, or other thing of value will render
this Lease void and of no force or effect.
29.12. Notices. Wherever in this Lease it shall be required or permitted that notice and
demand be given or served by either Party to this Lease to or on the other, such
notice or demand shall be given or served in writing and shall not be deemed to
have been duly given or served unless m writing, and personally served or
forwarded by certified mail, postage prepaid, addressed as specified below. Either
Party may change the address set forth below by written notice by certified mail to
the other. Any notice or demand given by certified mail shall be effective one (1)
day subsequent to mailing.
01181.0001/535653.1 21
Landlord:
With a copy to:
Tenant:
City of Morro Bay
Attu: City Manager
595 Harbor Street
Morro Bay, CA 94585
Aleshire & Wynder, LLP
Attn. Chris F. Neumeyer, City Attorney
18881 Von Karman Ave., Suite 1700, Irvine CA
92612
Rock Harbor Marketing
Attn. Travis Ford
898 Napa Ave #267, Morro Bay CA, 93443
29.13. Not an Offer. The submission of this Lease and any ancillary documents to Tenant
shall not constitute an offer to lease, and Landlord shall have no obligation of any
kind, express or implied to lease the Premises to Tenant until Landlord has
approved, executed and returned to Tenant a fully signed copy of this Lease
29.14. Amendments. This Lease may be modified or amended only in writing executed
by both Parties and approved by Landlord in accordance with applicable law.
29.15. Exhibits. Exhibit A is attached hereto and incorporated herein by reference.
29.16. Acknowledgement of Content. Each Party acknowledges they have read and fully
understand the contents of this Lease and have had an opportunity to consult with an
attorney regarding the same. This Lease represents the entire and integrated
agreement between the Parties with respect to the subject matter hereof and
supersedes all prior negotiations, representations or agreements, either written or
oral.
01181.0001/535653.1 22
IN WITNESS WHEREOF, the Parties have duly executed this Lease on the day and year
first above written in Morro Bay, California.
LANDLORD:
CITY OF MORRO BAY,
a municipal - 0 iporation
By.
co t Collins, City Manager
liI j/
ATTEST:
Iana Swanson, City Clerk
, 2020
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
By: Chs AMA,
Chris F. Neumeyer, CiAttorn
1-47
01181.0001/535653.1 23
TENANT:
TRAVIS FORD, dba ROCK HARBOR
MARKET G, a Sole Proprietorship
fIa1'it?jtr (i , 2020
, 2020
EXHIBIT A
DESCRIPTION AND DEPICTION OF PREMISES
The Premises consist of Space B and shared use of the bathrooms as depicted on the figure
below.
(APN4 066-321-027)
01181.0001/535653.1
GEICO
Washington DC
MAILING ADDRESS
TRAVIS L FORD AND JENNIFER N
FORD
GEICO GENERAL INSURANCE COMPANY
VERIFICATION OF COVERAGE
(SEE BELOW UNDER CAUTIONARY NOTE)
2981 SANDALWOOD AVE
MORRO BAY CA 93442-3151
Policy Number: 4224981607
Effective Date: 12-12-20
Expiration Date: 06-12-21
Registered State: CALIFORNIA
To whom it may concern:
This letter is to verify that we have issued coverage under the above policy number for the dates indicated in the
effective and expiration date fields for the vehicle listed. This should serve as proof that the below mentioned vehicle
meets or exceeds the financial responsibility requirement for your state.
This verification of coverage does not amend, extend or alter the coverage afforded by this policy.
Vehicle Year 2009
Make• HYUNDAI
Model: ELANTRA
VIN: KMHDU46D39U815320
COVERAGES
Bodily Injury Liability
Each Person/Each Occurrence
State Minimum $15,000/$30,000
Property Damage Liability
State Minimum $5,000
Uninsured & Underinsured Motorists
Each Person/Each Occurrence
Uninsured Motorists Property Damage
Lienholder Additional Insured
LIMITS DEDUCTIBLES
$50,000/$100,000
$100,000
$50,000/$100,000
$3,500
Additional Information:
Issued on 11/18/2020
Interested Party
If you have any additional questions, please call 1-800-841 3000.
CAUTIONARY NOTE: THE CURRENT COVERAGES, LIMITS, AND DEDUCTIBLES MAY DIFFER FROM THE COVERAGES, LIMITS AND DEDUCTIBLES IN EFFECT AT
OTHER TIMES DURING THE POLICY PERIOD. THIS VERIFICATION OF COVERAGE REFLECTS THE COVERAGES, LIMITS, AND DEDUCTIBLES AS OF THE ISSUED
DATE OF THIS DOCUMENT WHICH IS SHOWN UNDER "ADDITIONAL INFORMATION" OR IF AN ISSUED DATE IS NOT SHOWN, THE DATE OF THIS FACSIMILE OR
EMAIL.
U33 12-17
GEICO
GEICO GENERAL INSURANCE COMPANY
Washington DC
MAILING ADDRESS
TRAVIS L FORD AND JENNIFER N
FORD
VERIFICATION OF COVERAGE
(SEE BELOW UNDER CAUTIONARY NOTE)
2981 SANDALWOOD AVE
MORRO BAY CA 93442-3151
Policy Number: 4224981607
Effective Date: 12-12-20
Expiration Date: 06-12-21
Registered State: CALIFORNIA
To whom it may concern'
This letter is to verify that we have issued coverage under the above policy number for the dates indicated in the
effective and expiration date fields for the vehicle listed. This should serve as proof that the below mentioned vehicle
meets or exceeds the financial responsibility requirement for your state.
This verification of coverage does not amend, extend or alter the coverage afforded by this policy.
Vehicle Year: 2019
Make SUBARU
Model: XV CROSSTR
VIN: JF2GTANCOKH291832
COVERAGES
Bodily Injury Liability
Each Person/Each Occurrence
State Minimum $15,000/$30,000
Property Damage Liability
State Minimum $5,000
Uninsured & Underinsured Motorists
Each Person/Each Occurrence
Comprehensive (Excluding Collision)
Collision
Emergency Road Service
Rental Reimbursement
Mechanical Breakdown
X Lienholder
JP MORGAN CHASE BANK
PO BOX 901098
FORT WORTH, TX 76101-2098
LIMITS DEDUCTIBLES
$50,000/$100,000
$100,000
$50,000/$100,000
Full
$35 Per Day / $1,050 Max
Additional Insured Interested Party
Additional Information:
Issued on 11/18/2020
$500 Ded
$500 Ded
$250 Ded
If you have any additional questions, please call 1-800-841-3000.
CAUTIONARY NOTE: THE CURRENT COVERAGES, LIMITS, AND DEDUCTIBLES MAY DIFFER FROM THE COVERAGES, LIMITS AND DEDUCTIBLES IN EFFECT AT
OTHER TIMES DURING THE POLICY PERIOD. THIS VERIFICATION OF COVERAGE REFLECTS THE COVERAGES, LIMITS, AND DEDUCTIBLES AS OF THE ISSUED
DATE OF THIS DOCUMENT WHICH IS SHOWN UNDER "ADDITIONAL INFORMATION" OR IF AN ISSUED DATE IS NOT SHOWN, THE DATE OF THIS FACSIMILE OR
EMAIL.
U33 12-17
GEICO
Washington DC
GEICO GENERAL INSURANCE COMPANY
VERIFICATION OF COVERAGE
(SEE BELOW UNDER CAUTIONARY NOTE)
MAILING ADDRESS
TRAVIS L FORD AND JENNIFER N
FORD
2981 SANDALWOOD AVE
MORRO BAY CA 93442-3151
Policy Number: 4224981607
Effective Date: 12-12-20
Expiration Date: 06-12-21
Registered State: CALIFORNIA
To whom it may concern:
This letter is to verify that we have issued coverage under the above policy number for the dates indicated in the
effective and expiration date fields for the vehicle listed. This should serve as proof that the below mentioned vehicle
meets or exceeds the financial responsibility requirement for your state.
This verification of coverage does not amend, extend or alter the coverage afforded by this policy.
Vehicle Year: 2020
Make SUBARU
Model: OUTBACK
VI N: 4S4BTAPC4L3129668
COVERAGES LIMITS DEDUCTIBLES
Bodily Injury Liability
Each Person/Each Occurrence
State Minimum $15,000/$30,000 $50,000/$100,000
Property Damage Liability
State Minimum $5,000 $100,000
Uninsured & Underinsured Motorists
Each Person/Each Occurrence $50,000/$100,000
Comprehensive (Excluding Collision) $500 Ded
Collision $500 Ded
Emergency Road Service Full
Rental Reimbursement $35 Per Day / $1,050 Max
Mechanical Breakdown $250 Ded
X Lienholder
COASTHILLS CREDIT UNION
Additional Insured Interested Party
PO BOX 200
LOMPOC, CA 93438-0200
Additional Information:
Issued on 11/18/2020
If you have any additional questions, please call 1-800-841-3000.
CAUTIONARY NOTE: THE CURRENT COVERAGES, LIMITS, AND DEDUCTIBLES MAY DIFFER FROM THE COVERAGES, LIMITS AND DEDUCTIBLES IN EFFECT AT
OTHER TIMES DURING THE POLICY PERIOD. THIS VERIFICATION OF COVERAGE REFLECTS THE COVERAGES, LIMITS, AND DEDUCTIBLES AS OF THE ISSUED
DATE OF THIS DOCUMENT WHICH IS SHOWN UNDER "ADDITIONAL INFORMATION" OR IF AN ISSUED DATE IS NOT SHOWN, THE DATE OF THIS FACSIMILE OR
EMAIL.
U33 12-17
AC Oki.
CERTIFICATE OF LIABILITY INSURANCE
DATE (MM/DD/YYYY)
11 /17/2020
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT
AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT
CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must 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
TAPCO- KL (5576)
PO Box 286
Burlington, NC 27216
CONTACT NAME
PHONE (A/C No, Ext): FAX (A/C No):
EMAIL ADDRESS:
INSURER(S) AFFORDING COVERAGE
NAIC #
INSURED
ROCK HARBOR MARKETING
781 MARKET ST. SPACE B
MORRO BAY, CA 93442
INSURER A: United States Liability Insurance Company
25895
INSUREB B:
INSURER C:
INSURER D.
INSURER E.
INSURER F:
CERTIFICATE NUMBER:
REVISION NUMBER:
THIS
NOTWITHSTANDING
ISSUED
SUCH
IS
POLICIES.
TO
OR
CERTIFY
MAY
PERTAIN,
LIMITS
THAT
ANY
SHOWN
REQUIREMENT,
THE
THE
POLICIES
INSURANCE
MAY
HAVE
OF
TERM
BEEN
INSURANCE
AFFORDED
OR
REDUCED
CONDITION
BY
LISTED
THE
BY
OF
POLICIES
PAID
BELOW
ANY
CLAIMS.
CONTRACT
HAVE
DESCRIBED
BEEN
ISSUED
OR
HEREIN
OTHER
TO
DOCUMENT
IS
THE
SUBJECT
INSURED
WITH
TO
ALL
NAMED
RESPECT
THE
ABOVE
TERMS,
TO
FOR
WHICH
EXCLUSIONS
THE
THIS
POLICY
CERTIFICATE
AND
PERIOD
CONDITIONS
INDICATED.
MAY
BE
OF
INSR
LTR
TYPE
OF
INSURANCE
ADDL
INSR
SUBR
WVD
POLICY
NUMBER
(MM/DD/YYYY)
POLICY
EFF
(MM/DD/YYYY)
POLICY
EXP
LIMITS
GENERAL
LIABILITY
05/30/2020
05/30/2021
EACH
OCCURENCE
$1,000,000
PREMISES
,,qq��
TT
(Ea
occurrrence)
$300,000
X
COMMERCIAL
GENERAL
LIABILITY
MTK1564358A
MED
EXP
(Any
one
person)
$10,000
CLAIMS
MADE
X
OCCUR
PERSONAL
&
ADV
INJURY
A
GENERAL
AGGREGATE
$2,000,000
PRODUCTS-COMP/OP
AGG
GEN'L
AGGREGATE
LIMIT
APPLIES
PER:
$
X
POLICY
PRO-
JFCT
LOC
AUTOMOBILIE
LIABILITY
QOMaBINEDV
INGLE
LIMIT
$
BODILY
INJURY
(Per
person)
$
ANY
AUTO
BODILY
INJURY
(Per
accident)
$
ZITISIXVN
ED
05RULED
�e?OdTeY
er
accident))
(DAMAGE
$
HIRED
AUTOS
AUTOSWNED
$
EACH
OCCURRENCE
$
UMBRELLA
LIAB
OCCUR
AGGREGATE
$
EXCESS
LIAB
CLAIMS
-MADE
$
DED
RETENTION
$
WORKERS
AND
ANY
EMPLOYERS'
PROPRIETOR/PARTNER/EXECUTIVE
COMPENSASION
LIABILITY
Y
/
N
TORY
LAMITS
OR
-
E.L.
EACH
ACCIDENT
$
Rry
InV1414
EXCLUDED?
N
/ A
E.L.
DISEASE
-EA
EMPLOYEE
$
aFn
Egsco-KiON
OF
?3PERATIONS
below
E.L.
DISEASE
-POLICY
LIMIT
$
A
Technology
Professional
Liability
MTK1564358A
05/30/2020
05/30/2021
EACH
CLAIM
$1,000,000
ANNUAL
AGGREGATE
$1,000,000
DEDUCTIBLE
EACH
CLAIM
$0
DESCRIPTION
Technology
Professional
OF
OPERATIONS
Package.
/
Re:
LOCATIONS
781
Market
/VEHICLES
St
Space
B,
(See
Morro
attached
Bay,
CA
Acord
93442
101
for
City
additional
of
Morro
Bay
liability
is
an
limits)
additional
insured
per
BP
04 02 07 02BP-134
06/09
Blanket
Additional
Insured
is
part of
this
policy.
CERTIFICATE HOLDER
City of Morro Bay
585 Harbor St
Morro Bay, CA 94585
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE
POLICY PROVISIONS.
TIVE TIVE
74:11141J
AUTHORIZED REPRESENTA
ACORD 25 (2010/05)
Copyright 1988-2010 ACORD CORPORATION rights reserved.
The ACORD name and logo are registered marks of ACORD
AGENCY CUSTOMER ID: 5576
/A - 1i°
Ler-
LOC #: All
ADDITIONAL REMARKS SCHEDULE
Page 1 of 1
AGENCY
TAPCO- KL (5576)
POLICY NUMBER
MTK1564358A
CARRIER
United States Liability Insurance Company
NAIC CODE
25895
INSURED
ROCK HARBOR MARKETING
781 MARKET ST. SPACE B
MORRO BAY, CA 93442
EFFECTIVE DATE- 5/30/2020
ADDITIONAL REMARKS
THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM,
FORM NUMBER: ACORD 25 FORM TITLE: CERTIFICATE OF LIABILITY INSURANCE
COVERAGE PART LIMITS
Businessowners Liability
Liability and Medical Expenses $1,000,000
Medical Expense (per person) $10,000
Damages To Premises Rented To You (Any One Premises) $300,000
Hired and Non -owned Auto Each Occurrence Included
Hired and Non -owned Auto Aggregate Included
General Aggregate $2,000,000
Technology Professional Liability
Each Claim Limit $1,000,000
Annual Aggregate Limit $1,000,000
Deductible $0
Privacy Breach Expense and Defense of Regulatory Claims Each Claim $250,000
Privacy Breach Expense and Defense of Regulatory Claims Aggregate $250,000
Retroactive Date 05/30/2019
ACORD 101 (2008/01) Copyright 2008 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks of ACORD
ENDORSEMENT #3
This endorsement, issued by United States Liability Insurance Company
to ROCK HARBOR MARKETING forms a part of
Policy Number MTK1564358A effective on 11/9/2020 (MO. DAY YR.) at 12:01 A.M.
Add/Remove/Amend Businessowners Additional Insured Endorsement
In consideration of no change in premium it is hereby agreed that the following form(s)
is(are) added to the Policy:
BP0402 07/02 - Additional Insured - Managers Or Lessors Of Premises
All other terms and conditions of this Policy remain unchanged.
ADD_REM (03-01)
POLICY NUMBER* MTK1564358A BUSINESSOWNERS
BP 04 02 07 02
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - MANAGERS OR LESSORS
OF PREMISES
This endorsement modifies insurance provided under the following:
BUSINESSOWNERS COVERAGE FORM
SCHEDULE*
Name of Person or Organization:
Effective Date: 11/09/2020 12:01 AM
CITY OF MORRO BAY
595 HARBOR ST
MORRO BAY, CA 94585
Designation of Premises
781 MARKET ST. SPACE B
MORRO BAY, CA 93442
*Information required to complete this Schedule, if not shown on this endorsement, will be shown in the Declarations
A. The following is added to Paragraph C. WHO IS
AN INSURED in Section II - Liability:
4. The person or organization shown in the Schedule
is also an insured, but only with respect to liability
arising out of the ownership, maintenance or use
of that part of the premises leased to you and
shown in the Schedule
B. The following exclusions are added to Section II -
Liability:
This insurance does not apply to:
1 Any 'occurrence" that takes place after you cease to
be a tenant in the premises described in the
Schedule.
2. Structural alterations, new construction or demolition
operations perfored by or for the person or
organization designated in the Schedule.
BP 04 02 07 02 ISO Properties, Inc., 2001
This
to
In
policy
endorsement
Number
is
amended
HARBOR
MTK1564358A
of
issued
an
MARKETING
additional
by
United
effective
premium
forms
changes:
ENDORSEMENT
States
a
Liability
it
is
Insurance
Coverage
hereby
(MO.
#4
agreed
Company
DAY
YR.)
and
understood
at
12:01
A.M.
that
the
part
on
of
of
11/11/2020
$33
Policy
the
ROCK
consideration
with
following
Add/Remove/Amend
LOCATIONS:
Loc. #
Address
Territory
1 781
Market
St.
Space
B,
Morro
Bay,
CA, 93442
012
Covered
Causes of
Loss: Special
Code:
0702
Fire
Construction:
Unknown
Prot.
Class:
1
Description:
Business
Personal
Property
Square
Footage:
0
Special
Deductible:
None
Special
Deductible
Type:
COMMERCIAL
GENERAL
LIABILITY
COVERAGE
PART
COVERAGES:
Rate
Premium
Change
Loc#
Classification
Code
No.
Premium
Basis
Pr/Co*
All
Other
Pr/Co*
All
Other
Charged
1 Amend
Additional
Insured
-
Managers
or
49950
1
Flat
0.000
0.000
Included
Included
$0
Lessors of
Premises
1 Add
Non
-Owned
&
Hired
Automobile
90099
Flat
0.000 60.000
$0
$60 $33
Liability
-
Errors
and
Omissions
LIMITS:
following
Limits
have
been
amended
as shown:
The
Liability
and
Medical
Expenses
$1,000,000
Medical
Expense
(per
person)
$10,000
Damages
To
Premises
Rented
To You (Any One
Premises)
$300,000
Hired
and
Non
-owned
Auto
Each
Occurrence
Included
Hired
and
Non
-owned
Auto
Aggregate
Included
It
is
hereby
agreed
that
the
following
form(s)
is(are)
added
to
the
Policy:
BP-17
11/08
-
Hired
Auto
And
Non
-Owned
Auto
Liability
Jacket
07/19
-
Policy
Jacket
MTK
258
03/19
-
Privacy
Breach
Expense
Plus
Endorsement
All
other
terms
and
conditions
of
this
Policy
remain unchanged.
*
Products/Completed
Operations
UNITED STATES LIABILITY INSURANCE GROUP
WAYNE, PENNSYLVANIA
This endorsement modifies insurance provided under the following:
BUSINESSOWNERS COVERAGE FORM
HIRED AUTO AND NON -OWNED AUTO LIABILITY
A. Insurance is provided only for those coverages for which a specific limit or premium charge is shown
in the Declarations.
1. HIRED AUTO LIABILITY
The insurance provided under SECTION II — LIABILITY; A. Coverages 1. Business Liability;
applies to "bodily injury' or 'property damage" arising out of the maintenance or use of a 'hired
auto' by you or your "employees' in the course of your business
2. NON -OWNED AUTO LIABILITY
The insurance provided under SECTION II — LIABILITY; A. Coverages 1. Business Liability; A.
Coverages 1. Business Liability, applies to "bodily injury" or ' property damage" arising out of the
use of any "non -owned auto" in your business by any person other than you.
B. For insurance provided by this endorsement only:
1. The exclusions under SECTION II — LIABILITY; B. Exclusions; 1. Applicable to Business
Liability Coverage; other than exclusions a , b., d., f. and i. and the Nuclear Energy Liability
Exclusion, are deleted and replaced by the following:
a. "Bodily injury" tot
(1)An "employee" of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b)Performing duties related to the conduct of the insured's business; or
(2)The spouse, child, parent brother or sister of that "employee" as a consequence of
Paragraph (1) above.
This exclusion applies:
(a) Whether the insured may be liable as an employer or in any other capacity; and
(b)To any obligation to share damages with or repay someone else who must pay damages
because of injury.
This exclusion does not apply to:
(i) Liability assumed by the insured under an "insured contract"; or
(ii) 'Bodily injury" arising out of and in the course of domestic employment by the insured
unless benefits for such injury are in whole or in part either payable or required to be
provided under any workers compensation law.
b. "Property damage" to:
(1) Property owned or being transported by, or rented or loaned to the insured; or
(2) Property in the care, custody or control of the insured,
2. SECTION II — LIABILITY; C. Who Is An Insured; is replaced by the following:
Each of the following is an insured under this endorsement to the extent set forth below:
a. You;
b. Any other person using a "hired auto" with your permission;
c. For a "non -owned auto", any partner or "executive officer" of yours, but only while
'non -owned auto" is being used in your business; and
d. Any other person or organization, but only for their liability because of acts or omissions
insured under a., b. or c above.
None of the following is an insured:
such
of an
BP 17 (11-08) Page 1 of 2
(1)Any person engaged in the business of his or her employer for "bodily injury" to any co -
"employee" of such person injured in the course of employment, or to the spouse, child,
parent, brother or sister of that co -"employee" as a consequence of such "bodily injury", or for
any obligation to share damages with or repay someone else who must pay damages
because of the injury;
(2)Any partner or "executive officer" for any "auto" owned by such partner or officer or a member
of his or her household;
(3)Any person while employed in or otherwise engaged in duties in connection with an "auto
business", other than an "auto business" you operate;
(4) The owner or lessee (of whom you are a sub lessee) of a "hired auto" or the owner of a
"non -owned auto" or any agent or "employee" of any such owner or lessee;
(5)Any person or organization for the conduct of any current or past partnership or joint venture
that is not shown as a Named Insured in the Declarations
3. This insurance does not apply: If you regularly deliver the good or products which you are in the
business of selling, "Bodily Injury" or "Property Damage' arising out of the delivery of those goods
or products.
4. This insurance does not apply: If you deliver any goods or products for a charge, "Bodily Injury" or
"Property Damage" arising out of the delivery of those goods or products.
C. The following additional definitions apply:
23. "Auto Business' means the business or occupation of selling, repairing, servicing, storing or
parking ` autos".
24. "Hired Auto' means any "auto" you lease, hire or borrow. This does not include any "auto" you
lease, hire, rent or borrow from any of your "employees" or members of their households, or from
any partner or "executive officer" of yours. This DOES NOT include any "Auto" you lease for a
period of more than 30 consecutive days.
25. "Non -Owned Auto" means any ' auto" you do not own, lease, hire, rent or borrow which is used
in connection with your business However, if you are a partnership, a "non -owned auto" does not
include any "auto' owned by any partner.
All other terms and conditions of this Policy remain unchanged. This endorsement is a part of your Policy
and takes effect on the effective date of your Policy unless another effective date is shown.
BP 17 (11-08) Page 2 of 2
UNITED STATES LIABILITY
INSURANCE GROUP
A STOCK COMPANY
A BERKSHIRE HATHAWAY COMPANY
1190 Devon Park Drive
Wayne, PA 19087-2191
888-523-5545 — USLI.COM
INSURANCE
POLICY
This policy jacket together with the policy declarations,
coverage forms and endorsements, if any, complete
this policy.
The enclosed declarations designates the issuing
company.
Jacket (07-19)
Page 1 of 2
Read your policy carefully!
In Witness Whereof, the company has caused this Policy to be executed and attested. Where required by law,
this Policy shall not be valid unless countersigned by a duly authorized representative of the company.
Secretary
0Y"Ais‘f%
President
Jacket (07-19) Page 2 of 2
This endorsement modifies insurance provided under the following:
TECHNOLOGY PROFESSIONAL LIABILITY INSURANCE COVERAGE FORM
PRIVACY BREACH EXPENSE + ENDORSEMENT
Unless otherwise stated herein, the terms, conditions, exclusions and other limitations set forth in this
endorsement are applicable only to coverage afforded by this endorsement. Otherwise this
endorsement is part of and subject to the provisions of the Policy to which it is attached.
I. SCHEDULE OF ADDITIONAL COVERAGE AND LIMITS
The following is a summary of Coverage and Limits of Liability provided by this endorsement.
COVERAGE LIMIT OF LIABILITY
A. Privacy Breach Expense $250,000 each Privacy
Breach or
Security Event
$250,000 in the aggregate
B. Regulatory Claims $250,000 each Regulatory
Wi ongful Act
$250,000 in the aggregate
C. Business Interruption Injury See Section IV
and Extra Expense
D. Cyber Fxtortion Threat Expense See Section IV
E. Payment Card Industry Fines, Penalties and Assessments See Section IV
Aggregate Endorsement Limit $250,000
Retroactive Date: 05/30/2019
MTK 258 (03-19) Page 1 of 18
II. INSURING AGREEMENTS
Privacy Breach Expense
Regulatory Claims
Words shown in bold shall have the meaning provided
under DEFINITIONS of this endorsement or as provided
in SECTION III , DI~,FINITIONS, of the Technology
Professional Liability Insurance Policy, as applicable.
The Company will pay on behalf of the Named Insured
for Privacy Breach Expenses resulting from a Privacy
Breach, suspected Privacy Breach or Security Event that
first occurs on or after the Retroactive Date specified
above and which is first discovered dui ing the Policy
Period. No retention applies to this coverage.
The Insured shall not incur any Privacy Breach Expense
without (1) first reporting the Privacy Breach, suspected
Privacy Breach or Security Event to the Company and
(2) using a service provider of the Company's choice.
The Company will pay on behalf of the Insured, Claim
Expenses resulting from any written assertion or demand
for liability, financial compensation, or non -monetary
relief against any Insured or any judicial or administrative
proceeding initiated against any Insured including any
appeal of such proceeding that any person or entity intends
to hold such Insured responsible for a Regulatory
Wrongful Act, first made against an Insured during the
Policy Period or, if applicable, during any Extended
Reporting Period for a Regulatory Wrongful Act. Such
Regulatory Wrongful Act must first occur on or after the
Retroactive Date specified above. The Company will also
pay fines and penalties to the extent insurable by law
which the Insured is legally obligated to pay, including
amounts the Insured is legally obligated to deposit in a
fund as equitable relief for the payment of consumer
claims resulting from a Regulatory Notice/Proceeding as
a result of a Regulatory Wrongful Act.
MTK 258 (03-19) Page 2 of 18
Business Interruption Injury
and Extra Expense
Cyber Extortion Threat Expense
The Company will pay the Named Insured:
(1) Business Interruption Loss incurred by the
Named Insured; and
(2) Extra Expense incurred by the Named Insured
during the Period of Restoration•
starting aftei 8 hours and as a direct result of the actual and
necessary interruption of suspension of the Named
Insured's computer systems directly caused by a Privacy
Breach or Security Event.
If the Named Insured and the Company disagree on the
amount of Business Interruption Loss covered under the
"Business Interruption Loss and Extra Expense" Limit,
either party may make a written request for an appraisal to
be performed. In this event, each party will each select a
competent and impartial appraises. The two appraisers will
select an umpire. If they cannot agree on an umpire, one
will be selected by a judge of a court having jurisdiction
over the parties. The appraisers will make an appraisal of
the Business Interruption Loss incurred by the Named
Insured. If they agree on the amount of the Business
Interruption Loss, the Company will pay or reimburse
the Named Insured for that amount up to the Limit of
Liability set forth above. If the two appraisers cannot
agree on the amount of the Business Interruption Loss,
they will submit their appraisals to the umpire. A decision
by the umpire with respect to the amount of any Business
Interruption Loss will be final and binding on Company
and the Named Insured.
In carrying out the appraisal process, each patty will pay
its designated appraiser and share fees and expenses of the
umpire equally.
Any claims for Business Interruption Loss are otherwise
subject to the terms, conditions and exclusions of this
Policy.
The Company will pay the Named Insured, Cyber
Extortion Threat Expenses arising from a Cyber
Extortion Threat against the Named Insured, which first
occurs during the Policy Period. The Company will also
pay up to $5,000 per Policy Period for a Cyber Extortion
Threat experienced by a Named Insured's Client.
MTK 258 (03-19) Page 3 of 18
Payment Card Industry Fines,
Penalties and Assessments
The Insured(s) shall not incur any Cyber Extortion
Threat Expense without (1) first reporting the Cyber
Extortion Threat to the Company pursuant to Section VII
and (2) obtaining the Company's written consent to
payment of any Cyber Extortion Thi eat Expense, which
consent will not be unreasonably withheld.
The Company will pay on behalf of the Named Insured
for Payment Card Industry Fines Penalties and
Assessments as a part of a Payment Card Industry
Wrongful Act first made against an Insured during the
Policy Period or, if applicable, during any Extended
Reporting Period. Such Payment Card Industry Fines,
Penalties and Assessments must first occur on or after the
Retroactive Date specified above.
MTK 258 (03-19) Page 4 of 18
III. DEFINITIONS
Business Interruption Loss
means the following occurring during a Period of
Restoration:
(1) Any net profit or loss before income taxes that
would have been earned or incurred; and
(2) The Named Insured's normal, fixed operating and
payroll expenses.
Business Interruption Loss does not mean:
(1) Loss of bank interest or investment income;
(2) Loss or Claim Expense arising out of any Claim
by a third party;
(3) Legal costs or any legal expenses; or
(4) Claims of Loss incurred as a result of unfavorable
business conditions, loss of unfavorable business
conditions, loss of market or any other consequential
loss; or
(5) costs or expenses incurred by any Insured to
identify, fix, or prevent a future Privacy Breach or
Security Event
Business Interruption Loss resulting from multiple
interruptions or suspensions of the Named Insured's
computer systems that arise out of or result from the same
or a continuing Privacy Breach of Security Event or from
related or repeated Privacy Breaches or Security Events,
or from multiple Pi ivacy Breaches or Security Events,
shall be deemed to be a single Business Interruption
Loss; provided, however, that a separate Waiting Period
shall apply to each Period of Restoration.
In determining Business Interruption Loss, the Company
will consider the Named Insured's net profit or loss
before income taxes and normal fixed operating and
payroll expenses from business operations immediately
prior to the beginning of the Period of Restoration and
will make any necessary adjustments based on expected
market conditions and the volume and type of business
actually on the Named Insured's books of reasonably
certain to be put on the Named Insured's books, during
the Period of Restoration. If the Named Insured is
operating at a net loss, continuing expenses will only be
paid to the extent that they exceed the amount of the net
loss.
MTK 258 (03-19) Page 5 of 18
Cyber Extortion Threat
Cyber Extortion Threat Expense
Additionally, the Company will reduce the amount paid
foi Business Interruption Loss under the Policy to the
extent the Named Insured is able to reduce or limit such
interruption or suspension of the Insured's computer
systems and/or resume business operations by other
reasonable means but fails to do so.
means a threat made to the Named Insured or a Named
Insured's Client by an individual, entity or organization
who is not an Insured or an Named Insured's Client to:
(1) sell or publicly disclose Personally Identifiable
Information held by the Named Insured or Named
Insured's Client or
(2) alter, destroy, damage, delete or corrupt any Data
Asset; or
(3) prevent access to the Named Insured's or Named
Insured's Client s computer system or Data Assets,
including a denial of service attack or encrypting a Data
Asset and withholding the decryption key for such Data
Asset; or
(4) perpetrate a theft or misuse of a Data Asset on the
Named Insured's or Named Insured's Client's
computer system through external access; or
(5) interrupt or suspend the Named Insured's or
Named Insured's Client's computer system;
unless cash or cash equivalent, including cryptocurrency, is
received to prevent or terminate a Cyber Extortion
Threat from the Named Insured or Named Insured's
Client.
means the following costs approved in advance by the
Company and paid by or on behalf of the Named
Insured:
(1) Cash or cash equivalent, including cryptocurrency,
payment is made under duress by or on behalf of the
Named Insured for the sole purpose of preventing or
terminating a Cyber Extortion Threat;
(2) Payment for an independent negotiator or security
consultant to resolve a Cyber Extortion Threat.
Nothing herein shall obligate the Company to
recommend, select, retain or arrange, manage or
supervise such independent negotiator or security
consultant nor shall the Company be liable, beyond
what is covered under this Policy, for the acts or
omissions of such negotiator or consultant;
MTK 258 (03-19) Page 6 of 18
Data Asset
Denial of Service Attack
Extra Expense
(3) Reimbursement of up to $5,000 in costs incurred by
the Named Insured to:
(a) terminate a Cyber Extortion Threat
on behalf of a Named Insured s Client, or;
(b) restore a Data Asset lost by a
Named Insured's Client,
as a result of both a Cyber Extortion Threat
experienced by the Named Insured's Client and the
failure, error or omission of the Insured's Professional
Services.
(4) A reward up to $10,000 paid by the Named
Insured, as applicable, to an informant, who is not an
Insured, for information which leads to the arrest and
conviction of the person(s) responsible for a Cyber
Extortion Threat.
means any software or electronic data that exists in a
computer system, including computer programs,
applications, account information, customer information,
private or personal information, marketing information,
financial information and any other information maintained
by the Named Insured in its ordinary course of business.
means an event caused by unauthorized or unexpected
interference or malicious attack designed to overwhelm the
capacity of a computer system by sending an excessive
volume of electronic data for the purpose of preventing
access to the computer system
means reasonable and necessary expenses incurred by an
Insured to resume business operations following a
Privacy Breach or Security Event that causes or requires
the interruption or suspension of the Named Insured's
computer systems which are over and above expenses the
Named Insured would have normally incurred but for the
Privacy Breach or Security Event Extra Expense does
not include any costs of updating, upgrading, or
remediation of the Named Insured s computer systems
that are not otherwise covered under this endorsement.
MTK 258 (03-19) Page 7 of 18
Key Personnel
Named Insured's Client
Payment Card Industry
Data Security Standards
Payment Card Industry Fines,
Penalties and Assessments
Payment Card Industry
Wrongful Act
means the individuals holding the following positions in the
Named Insured: President; owner, partner, members of the
Board of Directors; executive officers, including the Chief
Executive Officer, Chief Operating Officer, and Chief
Financial Officer; General Counsel, staff attorneys
employed by the Named Insured; Chief Information
Officer; Chief Security Officer; Chief Privacy Officer;
managing member of a limited liability company; and any
individual in a substantially similar position as those
referenced above or with substantially similar
responsibilities as those referenced above, irrespective of
the exact title of such individual, and any individual who
previously held any of the above referenced positions.
means a client of the Named Insured's for which a written
contract exists to receive Professional Services from the
Named Insured.
means the published data security standard in
effect now or as hereafter amended that all merchants and
processors must follow when storing,
processing and transmitting cardholder data.
means a written demand for monetary fines, penalties and
costs incurred by the payment card company issuing bank,
or acquiring bank to replace credit or debit cards whose
card numbers were compromised or costs incurred to refund
fraudulent charges.
means an Insured's actual or alleged noncompliance with
published Payment Card Industry Data Security
Standards as outlined under the terms of any agreement
between the Named Insured and a financial institution,
credit/debit card company, credit/debit card processor or
independent service operator enabling an Insured to accept
credit card, debit card prepaid card, or other payment cards
for payments or donations. Such act(s) of noncompliance
must have resulted in a notice to the Company of a Privacy
Breach.
MTK 258 (03-19) Page 8 of 18
Personally Identifiable
Information
Period of Restoration
Privacy Breach
Privacy Breach Expense
means the following non-public information in the care,
custody and control of the Insured, or those acting on
behalf of the Insured•
(1) information, both in electronic and non -electronic
foim, concerning an individual(s) that would be
considered "non-public information" within the meaning
of Title V of the Gramm -Leach Bliley Act of 1999 (as
amended) and its implementing regulations including but
not limited to social security numbers or account
numbers;
(2) personal information as defined in any privacy
protection law govetnmg the control and use of an
individual's personal and confidential information,
including any regulations promulgated thereunder; and
(3) protected health information including but not
limited to information as defined by the Health Insurance
Poitability and Accountability Act of 1996 (Public Law
104-191) ("HIPPA") or the Health Information
Technology for Economic and Clinical Health Act of
2009 ("HITECH") (Public Law 111-5), as amended, and
any regulations promulgated thereto.
means the period of time, up to a maximum of one hundred
eighty (180) days, commencing on the date and time that a
caused or required suspension or interruption of the Named
Insured's computer systems first occurs and ending on the
date and time that the caused or required interruption or
suspension ends, of reasonably would have ended if the
Named Insured had acted with due diligence to restore the
computer systems and mitigate the Business Interruption
Injury as provided below.
means the misappropriation, theft, loss of, unauthorized
access, inadvertent disclosure or public exposure of
Personally Identifiable Information. Privacy Breach
does not mean a situation where Personally Identifiable
Information is deliberately disclosed of sold to a third
party with the knowledge and consent of Key Personnel.
Privacy Breach Expense means the seasonable and
necessary expenses listed below in (1) through (9) resulting
from a Privacy Breach, suspected Privacy Breach, or
Security Event and incurred by the Named Insured or
assumed under a wiitten contract or agreement.
MTK 258 (03-19) Page 9 of 18
Privacy Law
(1) Development of a plan to assist the Named
Insured; and
(2) Development, printing, and mailing of legally
required notification letters to those affected persons; and
(3) Development, printing and mailing of non -legally
required notification letters to affected or potentially
affected pei sons at the Company's discretion; and
(4) Public relations or crisis management services
retained for the Named Insured to mitigate any adverse
effect on the Named Insured s reputation with
customers investors and employees resulting from a
Privacy Breach that becomes public; and
(5) Data analysis or forensic investigation; and
(6) Development of a website link for use by the
Named Insured in communicating with persons
affected; and
(7) Development and support of a Customer
Relationship Management (CRM) system and call center
for use by the Named Insured in communicating with
persons affected, and
(8) Credit monitoring services or identity restoration
services that are reasonable and necessary to those
persons affected; and
(9) the cost foi Data Asset restoration resulting
from damages from the intentional
or willful destruction of a Data Asset,
but not including:
a) the cost to update or improve any Data
Asset or computer system to a level beyond
that which existed prior to such damages
resulting from the intentional or willful
destruction of a Data Asset; or
b) the economic or market value of any
Data Asset.
The above costs are subject to the limit of
liability for "each Privacy Breach" and "in the
aggregate" for Privacy Breach Expense shown
above.
means any federal, state, local or foreign statute or
regulation governing the confidentiality, access, control and
use of Personally Identifiable Information.
MTK 258 (03-19) Page 10 of 18
Regulatory Notice/Proceeding
Regulatory Wrongful Act
Security Event
means a request for information, civil investigation, civil
proceeding or other similar proceeding directed to an
Insured and brought by or on behalf of any federal, state,
local, of foreign regulatory agency, related to an actual or
alleged violation of any Privacy Law This definition
includes any proceeding regarding the Health Insurance
Poitability and Accountability Act of 1996 (HIPAA)
Privacy, Security and Breach Notification Rules or
regarding EU General Data Piotection Regulation
(2016/679)
means an Insured's actual or alleged violation of a Privacy
Law which results in a Regulatory Notice/Proceeding
against an Insured.
means:
(1) An unauthorized access of the Named Insured's
computer system(s); or
(2) Transmission of malicious code or virus to the
Named Insured's computes system(s); or
(3) A Denial of Service Attack against an Insured
Entity's computer system(s).
MTK 258 (03-19) Page 11 of 18
IV. LIMITS OF LIABILITY AND RETFNTION
Privacy Breach Expense
Each Privacy Bleach Limit
Privacy Breach Expense
In the Aggregate Limit
Regulatory Claims
Each Regulatory Wrongful Act
Regulatory Claims
In the Aggregate Limit
Business Interruption Injury
And Extra Expense
Cyber Fxtortion Threat Expense
Payment Card Industry
Fines, Penalties and Assesments
The "each Privacy Breach or Security Event" Limit of
Liability specified in the schedule above for Privacy
Breach Expense shall be the maximum liability for
Privacy Breach Expense per Privacy Breach or
Security Event.
The "in the aggregate" Limit of Liability specified in the
Schedule above for Privacy Breach Expense shall be the
maximum Limit of Liability for Privacy Breach Expense
for all Privacy Breaches.
The "Regulatory Wrongful Act" Limit of Liability
specified in the schedule above for Regulatory Claims
shall be the maximum liability for Regulatory Claims.
The "in the aggregate" Limit of Liability specified in the
Schedule above for Regulatory Wrongful Act shall be
the maximum Limit of Liability for Regulatory Claims.
The "Business Interruption and Extra Expense Limit"
shown on this endorsement shall be a part of and not in
addition to the "each Privacy Breach or Security
Event" and "in the aggregate" Limits of Liability
specified in the schedule above for "Privacy Breach
Expense".
The "Cyber Extortion Threat" Limit of Liability shown
on this endorsement shall be a part of and not in addition
to the "each Privacy Breach or Security Event" and "in
the aggregate" Limits of Liability specified in the
schedule above for "Privacy Breach Expense".
The "Payment Card Industry Fines and Penalties and
Assessments" Limit of Liability shown on this
endorsement shall be a part of and not in addition to the
"each Privacy Breach or Security Event and 'in the
aggregate" Limits of Liability specified in the schedule
above for "Privacy Breach Expense".
MTK 258 (03-19) Page 12 of 18
Limits Outside Policy
Aggt egate
Policy Period Aggregate Limit
The Limits of Liability for Coverages A, B, C, D and E
pt ovided by this endorsement shall be separate from the
'IN THE AGGREGATE" LIMIT OF LIABILITY
specified in the Policy Declarations for the Technology
Professional Liability Insurance Coverage form.
In no event shall the Company pay more than the
`Aggregate Endorsement Limit' specified in the Schedule
above in any Policy Period for any combination of the
above coverages.
Deductible TNo deductible applies to coverage afforded by this
endorsement.
MTK 258 (03-19) Page 13 of 18
V. ADDITIONAL EXCLUSIONS
Other Costs/Expenses
Other Coverage
Prior Notice
Intentional Failure to
Provide Notice
Criminal/Intentional Acts
In addition to the exclusions listed in Section IV
EXCLUSIONS of the Policy the following exclusions
apply.
The Company shall not be liable to make payment for
Loss or Claim Expense in connection with any suspected
Privacy Breach, Privacy Breach, Security Event or
Cyber Extortion Threat Expense, or Claim made against
any Insured arising out of, directly or indirectly resulting
from or in consequence of, or in any way involving:
cost or expense incurred or expected to be incurred by a
person(s) whose Personally Identifiable Information was
the subject of a Privacy Breach except as provided under
Privacy Breach Expense; or
cost or expense covered, in whole or in part under any
other coverage which is part of this Policy; or
any Privacy Breach, Cyber Extortion Threat, Business
Interruption Injury, Payment Card Industry Wrongful
Act or Regulatory Action of which any Insured had
notice prior to the inception date of this Policy, or any fact,
circumstance, event, situation or incident which before the
inception date of this Policy was the subject of any notice
under any other similar policy of insurance or any future
claims for expenses under this Policy based upon such
pending or prior notice; or
any actual or alleged intentional failure of the Named
Insured to provide notice of a known Privacy Breach to
authorities or to potentially affected persons or
organizations in accordance with the requirements of any
federal or state statute or regulation; or
any actual or alleged criminal, fraudulent dishonest or
discriminatory act by the Insured, or the gaining by the
Insured of any personal profit gain or advantage to which
the Insured was not legally entitled; or
MTK 258 (03-19)
Page 14 of 18
Utility Service Disruption
failure, interruption or reduction in supply of utility service
or infrastiuctuie, including, without limitation, electrical,
gas, water, telephone, internet, cable, satellite, or
telecommunications.
MTK 258 (03-19) Page 15 of 18
VI. COVERAGE, LIMITATIONS
Extension Period
Full Prior Acts
Criminal/Intentional Acts
The following terms, conditions and exclusions in the
Technology Professional Liability policy do not apply to
this endorsement:
Section VII EXTENSION PERIOD;
Section II. FULL PRIOR ACTS COVERAGE
PROVISION.
Section IV Exclusion A
MTK 258 (03-19)
Page 16 of 18
VII. Section V DEFENSE AND SETTLEMENT is amended with the addition of the following:
F. For the purposes of Cyber Extortion Threat Expense coverage provided by this endorsement,
the following conditions apply:
Notification of Law
Fi nforcement
An Insured authorizes the Company or its representatives
to notify the law enforcement authorities of any actual or
potential Cyber Extortion Threat. An Insured shall
thereafter cooperate fully with law enforcement authorities
in the investigation and prosecution of a Cyber Extortion
Threat.
2. Disclosure of Coverage An Insured shall not disclose to any person, organization or
entity outside of the Named Insured other than law
enforcement, of the existence of insurance coverage
afforded by this Policy.
VII. NOTICE/CLAIM REPORTING PROVISIONS
Section VIII. NOTICE/CLAIM REPORTING PROVISIONS is deleted and replaced with the
following
Notice hereunder shall be given in writing to the Company. If mailed, the date of mailing of such
notice shall constitute the date that such notice was given and proof of mailing shall be sufficient proof
of notice.
A. Written Notice of a Claim or Privacy Breach, suspected Privacy Breach, Security Event,
Cyber Extortion Threat
(1) As a condition precedent to exercising any right to coverage under this Policy, the Insured shall
give written notice to the Company of a Claim or Privacy Breach suspected Privacy Breach,
Security Event, Cyber Extortion Threat as soon as practicable after Key Personnel learns of such
Claim or Privacy Breach, suspected Privacy Breach, Security Event, Cyber Extortion Threat
during the Policy Period in which the Claim or Privacy Breach, suspected Privacy Breach, Security
Event, Cybei Extortion Threat is first made against or discovered by an Insured but:
a. if the Pohcy Period expires, is cancelled or is non -renewed and if no Extended Reporting Period
is purchased, no later than sixty (60) days after the expiration date or the effective date of such
cancellation or non -renewal for Claims or Privacy Breach, suspected Privacy Bi each, Security
Event Cyber Extortion Threat first made against or discovered by an Insured during the last sixty
(60) days prior to the Policy Period expiration or effective date of cancellation or nontenewal; or
b. if an Fxtended Reporting Period is purchased, no later than the last day of the Extended
Reporting Pei iod and the Claim must arise from a Wrongful Act committed before the date of the
Policy expiration, cancellation or non -renewal. If an Extended Reporting Period is purchased, notice of
a Claim shall be in accordance with the terms and conditions of Section VII. EXTENDED
REPORTING PERIOD provided that if the Company sends written notice to the Named Insured
stating that this Policy is being terminated for nonpayment of premium, an Insured shall give to the
MTK 258 (03-19) Page 17 of 18
Company written notice of such Claim or Privacy Breach, suspected Privacy Breach, Security
Event, Cyber Extortion Threat prior to the effective date of such termination.
B. Written Notice of a Circumstance
(1) An Insured shall give to the Company written notice of a circumstance which could reasonably
be expected to give rise to a Claim or Privacy Breach, suspected Privacy Breach, Security Event,
Cyber Extortion Threat, being made against or happening to an Insured as soon as practicable during
the Policy Period in which an Insured first becomes aware of the circumstance.
(2) If written notice of a circumstance which could reasonably be expected to give rise to a Claim
or Privacy Breach, suspected Privacy Breach, Security Event Cyber Extortion Threat made
against or happening to an Insured has been given to the Company during the Policy Period or the
Hxtended Reporting Period, where applicable and if purchased, any Claim or Privacy Breach,
suspected Privacy Breach Security Event Cyber Extortion Threat which is subsequently made
against an Insured and reported to the Company alleging, arising out of, based upon or attributable to
the facts alleged in the reported circumstance shall be considered first made at the time such notice of
the eircumstance was given. Coverage for a circumstance reported pursuant to this provision applies
only if the Wrongful Act that is a subject of the reported circumstance or the Privacy Breach,
suspected Privacy Breach, Security Event, Cyber Extortion Threat occurs prior to the expiration
date or if applicable, prior to the effective date of cancellation or non -renewal of the Policy Period in
which the circumstance was reported.
(3) When reporting a circumstance to the Company, an Insured shall give the reasons for
anticipating why the circumstance could reasonably be expected to give rise to a Claim, or Privacy
Breach, suspected Privacy Breach, Security Event, Cyber Extortion Threat being made against the
Insured with full particulars as to the dates and persons involved.
Coverage provided by your Policy and any endorsements attached thereto are amended by this
endorsement where applicable. All other terms and conditions of this Policy remain unchanged. This
endorsement is a part of the Named Insured's Policy and takes effect on the effective date of the
Named Insured's Policy unless another effective date is shown.
MTK 258 (03-19) Page 18 of 18