SAN MATEO COUNTY AGREEMENT NO.______________________

AGREEMENT WITH INDEPENDENT CONTRACTOR

(NON-CONSTRUCTION)

This Agreement entered this 1^st Day of July, 2002, by and between the COUNTY OF SAN MATEO a political subdivision of the State of California, and hereinafter called "County" and Keith A. Hillegass & Company, Inc., hereinafter called "Contractor."

W I T N E S S E T H

WHEREAS, it is necessary and desirable that Contractor be engaged by County for the purpose of performing services hereinafter described:

NOW, THEREFORE, IT IS HEREBY AGREED by the parties as follows:

1. Services to be performed by Contractor. In consideration of the payments hereinafter set forth, Contractor shall perform services for County in accordance with the terms, conditions and specifications set forth herein and in Exhibit A attached hereto and by this reference made a part hereof.

2. Payments. In consideration of the services rendered in accordance with all terms, conditions and specifications set forth herein and in Exhibit A, County shall make payment to Contractor in the manner specified herein and in Exhibit A. In the event that the County makes any advance payments, Contractor agrees to refund any amounts in excess of the amount owed by the County at the time of contract termination.

3. Relationship of the Parties. It is understood that this is an Agreement by and between Independent Contractor(s) and is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship whatsoever other than that of Independent Contractor.

4. Non-Assignability. Contractor shall not assign this Agreement or any portion thereof to a third party without the prior written consent of County, and any attempted assignment without such prior written consent in violation of this Section automatically shall terminate this Agreement.

5. Contract Term. This Agreement shall be in effect only as specified in Exhibit A. The County Purchasing Agent may terminate this contract at any time for any reason by providing 30 days' notice to Contractor. Termination to be effective on the date specified in the notice. In the event of termination under this paragraph, Contractor shall be paid for all work provided to the date of termination.

6. Hold Harmless: The Contractor shall indemnify and save harmless the County, its officers, agents, employees and servants from all claims, suits or actions of every name, kind and description, brought for, or on account of (A) injuries to or death of any person, including Contractor, or (B) damage to any property of any kind whatsoever and to whomsoever belonging, or (C) by reason of any failure to withhold and/or pay to the government income and/or employment taxes from earnings under this contract as made necessary by Section 530 of the Revenue Act of 1978, including, but not limited to, the concurrent active or passive negligence of the County, its officers, agents, employees or servants, resulting from the performance of any work required of Contractor or payments made pursuant to this agreement, provided that this shall not apply to injuries or damage for which the County has been found in a court of competent jurisdiction to be solely liable by reason of its own negligence or willful misconduct.

The duty of the Contractor to indemnify and save harmless as set forth herein, shall include the duty to defend as set forth in Section 2778 of the California Civil Code.

7. Insurance: The Contractor shall not commence work under this Agreement until all Insurance required under this section has been obtained and such insurance has been approved by the Purchasing Agent. The Contractor shall furnish the Purchasing Agent with Certificates of Insurance evidencing the required coverage and there shall be a specific contractual liability endorsement extending the Contractor's coverage to include the contractual liability assumed by the Contractor pursuant to this Agreement. These Certificates shall specify or be endorsed to provide that thirty (30) days' notice must be given, in writing, to the Purchasing Agent of any pending change in the limits of liability or of non-renewal, cancellation, or modification of the policy.

Workers' Compensation and Employer Liability Insurance: The Contractor shall have in effect, during the entire life of this Agreement, Workers' Compensation and Employer Liability Insurance providing full statutory coverage. In signing this Agreement, the Contractor makes the following certification, required by Section 1861 of the California Labor Code:

I am aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of the Code, and I will comply with such provisions before commencing the performance of this work of the Agreement.

Liability Insurance: The Contractor shall take out and maintain during the life of this Agreement such Bodily Injury Liability and Property Damage Liability Insurance as shall protect Contractor, its employees, officers and agents while performing work covered by this Agreement from any and all claims for damages for bodily injury, including accidental death, as well as any and all operations under this Agreement, whether such operations be by Contractor or by any sub-contractor or by anyone directly or indirectly employed by either of them. Such insurance shall be combined single limit bodily injury and property damage for each occurrence and shall be not less than $1,000,000 unless another amount is specified below and shows approval by the Department of Employee and Public Services, Risk Management Division.

Required insurance shall include:

Requesting Department complete column below

Approval by Risk Management Division if under $ 1,000,000

a. Comprehensive General Liability

$1,000,000

b. Automobile Liability

$1,000,000

c. Workers' Compensation

$1,000,000

The County and its officers, agents, employees and servants shall be named as additional insured on any such policies of insurance, which shall also contain a provision that the insurance afforded thereby to the County, its officers, agents, employees and servants shall be primary insurance to the full limits of liability of the policy, and that if the County, or its officers and employees have other insurance against a loss covered by such a policy, such other insurance shall be excess insurance only.

After three (3) years from the date this Agreement is first executed the County may, at its sole discretion, require an increase in the amount of liability insurance to the level then customary in similar County agreements by giving sixty (60) days' notice to Contractor.

In the event of the breach of any provision of this section, or in the event any notice is received which indicates any required insurance coverage will be diminished or canceled, the Purchasing Agent, at his option, may, notwithstanding any other provision of this Agreement to the contrary, immediately declare a material breach of this Agreement and suspend all further work pursuant to this Agreement.

8. Non-discrimination.

Non-Discrimination - General. No person shall, on the grounds of age (over 40), ancestry, creed, color, disability, marital status, medical condition, national origin, political or religious affiliation, race, sex, sexual orientation or any non-job-related criteria be excluded from participation in, be denied the benefits, or be subjected to discrimination under this AGREEMENT.

Non-Discrimination - Employment. Contractor shall ensure equal employment Opportunity based on objective standards of recruitment, selection, promotion, classification, compensation, performance evaluations, and management relations, for all employees under this AGREEMENT. Contractor's affirmative action policies shall be made available to County upon request.

Violation of the non-discrimination provisions of this Agreement shall be considered a breach of this Agreement and subject the Contractor to penalties, to be determined by the County Manager, including but not limited to

i) termination of this Agreement

ii) disqualification of the Contractor from bidding on or being awarded a County contract for a period of up to 3 years;

iii) liquidated damages of $2,500 per violation;

iv) imposition of other appropriate contractual and civil remedies and sanctions, as determined by the County Manager.

To effectuate the provisions of this paragraph, the County Manager shall have the authority to

i) examine Contractor's employment records with respect to compliance with this paragraph;

ii) set off all or any portion of the amount described in this paragraph against amounts due to Contractor under the Contract or any other Contractor between Contractor and County.

Contractor shall report to the County Manager the filing by any person in any court of any complaint of discrimination or the filing by any person of any and all charges with the Equal Employment Opportunity Commission, the Fair Employment and Housing Commission or any other entity charged with the investigation of allegations within 30 days of such filing, provided that within such 30 days such entity has not notified Contractor that such charges are dismissed or otherwise unfounded. Such notification shall include the name of the complainant, a copy of such complaint and a description of the circumstance. Contractor shall provide County with a copy of their response to the Complaint when filed.

With respect to the provision of employee benefits, Contractor shall comply with the County Ordinance that prohibits contractors from discriminating in the provision of employee benefits between an employee with a domestic partner and an employee with a spouse.

9. Accessibility of Services to Handicapped Persons. If the Contractor will be providing services directly to the public on behalf of San Mateo County, Contractor shall assure compliance with Section 504 of the Rehabilitation Act of 1973 by submitting a signed letter of assurance of compliance (Attachment I). Contractor shall be prepared to submit a self-evaluation and compliance plan to the County upon request within one year of the execution of this Agreement.

10. Substitutions: If particular people are identified in Exhibit A as working on this contract, the Contractor will not assign others to work in their place without written permission from the County Purchasing Agent. Any substitution shall be with a person of commensurate experience and knowledge.

11. Sole Property of the County: Any system or documents developed, produced or provided under this contract shall become the sole property of the County.

12. Contract Renewal. This Agreement may be renewed only as specified in Exhibit A.

13. Access to Records. The County, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the Contractor which are directly pertinent to this contract for the purpose of making audit, examination, excerpts, and transcriptions.

Contractor shall maintain all required records for three years after County makes final payments and all other pending matters are closed.

14. Merger Clause. This Agreement, including Exhibit A attached hereto and incorporated herein by reference, constitutes the sole agreement of the parties hereto with regard to the matters covered in this Agreement, and correctly states the rights, duties and obligations of each party as of the document's date. Any prior agreement, promises, negotiations or representations between the parties not expressly stated in this document are not binding. All subsequent modifications shall be in writing and signed by the County Purchasing Agent. In the event of a conflict between the terms, conditions or specifications set forth herein and those in Exhibit A attached hereto, the terms, conditions or specifications set forth herein shall prevail.

IN WITNESS WHEREOF, the parties hereto have affixed their hands on the day and year first above written.

Contractor Signature Date

Contractor's Tax I.D. Number or Social Security Number

Contractor Address

Note: This contract is not valid unless signed by both parties.
Exhibit A must also be initialed by both parties

Agreement No.

EXHIBIT A

Contract between County of San Mateo and Keith A. Hillegass Co, Inc. hereinafter called "Contractor".

I. Detailed description of services to be performed by Contractor:

Contractor will provide administration and support services for the County's self-insured general and automobile liability claims.

Specific service requirements of Contractor include:

1. Maintain claims files pertaining to the County's general and automobile liability insurance claims.

2. Administer the County's general and automobile claims to include all aspects of claims adjustment including:

· investigating to determine the validity of claims

· contacting claimants, witnesses and other involved parties

· obtaining statements, police reports, photographs, information from County departments and other pertinent information

· using knowledge of the laws of the State of California and case law to determine the County's liability exposure in relation to a claim and identify appropriate response of settlement, compromise or denial of claim

3. Work with County Counsel's Office in developing case defense through investigation of litigated cases.

4. Provide County Risk Management with a monthly summary of outstanding reserves for both general liability and automobile claims.

5. Provide County Risk Management, at a minimum of a quarterly basis, a claimant index by claimant name for both automobile and general liability claims.

6. Provide County Risk Management with an annual report at the end of the fiscal year that includes a listing of all open and closed claims from 1990, descriptions of the claims, the claim numbers, the amounts paid including bodily injury, property damage and claims expense, outstanding reserves and total incurred costs per claim and per year.

II. Fees: Contractor will be paid $98,000 per year for the five year contract period. Contractor will bill Risk Management will quarterly invoices in the amount of $24,500.

III. Term of the Contract:

The term of this contract shall commence on July 1, 2002 and shall continue through June 30, 2007.

Approval :

Contractor initials