CLAIMS ADMINISTRATION SERVICES AGREEMENT

Attachment D.13 CLAIMS ADMINISTRATION SERVICES AGREEMENT This AGREEMENT is made and entered into by and between SANTA BARBARA SCHOOL DISTRICTS hereinafter referred to as "DISTRICT", and KEENAN & ASSOCIATES, hereinafter referred to as "SERVICE COMPANY". DISTRICT and SERVICE COMPANY are hereinafter referred to collectively as "the Parties". WHEREAS, the DISTRICT is authorized by Section 53060 of the California Government code to contract with and employ an independent contractor specially trained to perform special services required; and WHEREAS, SERVICE COMPANY is specially trained, experienced, and competent in administering Self-Insurance Service Programs; and WHEREAS, the DISTRICT desires to contract with SERVICE COMPANY for the performance of professional services related to this program as more fully described herein. NOW, THEREFORE, for and in consideration of the mutual obligations contained herein, and the performance of the acts hereinafter set forth, the Parties agree as follows: 1. TERM OF AGREEMENT: This Agreement shall be effective from July 1,2004 - June 30, 2005. The Parties may extend the duration of their contractual relationship at the natural expiration of this Agreement by entering into another written agreement. 2. SERVICE COMPANY's RESPONSIBILITIES & SCOPE OF SERVICES: A. For purposes of this Agreement, DISTRICT understands that SERVICE COMPANY is not providing any legal, tax or accounting services or advice and that DISTRICT shall seek the counsel of its own attorney on all legal issues or matters and consult with its own tax and accounting experts on all related issues and matters relating to the services provided herein. B. It is understood that subject to the specific services set forth herein, DISTRICT shall retain all final authority and responsibility for the program and its operation, and that SERVICE COMPANY is empowered to act on behalf of DISTRICT in connection with the program only as expressly stated in this Agreement, or as mutually agreed to in writing by DISTRICT and SERVICE COMPANY. Claims Administration Services Agreement Page 1 of 10

3. SERVICE COMPANY shall provide the following services to the DISTRICT: 1. INVESTIGATIVE SERVICES A. SERVICE COMPANY agrees to provide investigative services as follows: 1. Receipt and examination of all reports of accidents, incidents, claims or cases, which are or may be the subject of such claims. 2. Initiate investigation of such accidents, incidents, claims or cases, where nature of the claim warrants such investigation or when requested by DISTRICT; such investigation to include contact with claimant, witnesses, employees of DISTRICT, and other such investigative services necessary to determine liability and damages, but not to include extraordinary professional services as set forth in subsection "B". DISTRICT shall make available to SERVICE COMPANY all employees of DISTRICT who are witnesses to an incident or accident or who have knowledge of the event or incident, which is the subject matter of the claim. If available, DISTRICT shall provide SERVICE COMPANY with photographs and engineering drawings or other descriptive material of all conditions of DISTRICT property which are alleged to be dangerous or that were damaged in the events, which produced the claim under investigation. The investigative facilities of SERVICE COMPANY shall be limited in scope and directed at determining the probable liability, or lack thereof, of DISTRICT. All additional investigations that may be required shall be construed as extraordinary professional services as set forth below in subsection B. 1. B. Allocated Expenses and Additional Investigative Expenses: 1. DISTRICT agrees to pay for the cost of extraordinary investigative services where expert and professional assistance is required, such as professional photography, laboratory services, property damage appraisals, taking statements from witnesses away from the premises of SERVICE COMPANY, on-site investigation, copying material and other records, trial preparation and professional engineering services including, but not limited to, map preparation, accident reconstruction, material analysis and premises evaluation. Claims Administration Services Agreement Page 2 of 10

II. ADJUSTMENT SERVICES A. SERVICE COMPANY agrees to provide complete adjustment services on each accident or incident, which is or may be the subject of a property or liability claim. Such services shall include: 1. The maintenance of a flle on each potential or actual claim reported to SERVICE COMPANY. 2. Periodic review and adjustment of reserves on all open claims. 3. Whenever investigation results in a determination that DISTRICT sustained a liability to a third party, SERVICE COMPANY shall process any such claim or potential claim for settlement in accordance with instructions and policies of DISTRICT for settlement of such claims. 4. Notification of DISTRICT's primary and excess coverage providers of all claims, which exceed DISTRICT's retention and maintenance of liaison between the coverage providers and the DISTRICT on matters affecting the adjustment of such claims and seek reimbursements for loss in excess of retention or deductible. 5. Subrogation on the DISTRICT's behalf against any party responsible or partially responsible for loss incurred by DISTRICT. 6. Recommendation of rejection of claims when appropriate pursuant to relevant provisions of Title 1, Division 3.6, Part 3, Chapter 2, of the Government Code of the State of California. 7. Obtain Release Agreements on settlements of any claims or potential claims as appropriate. III. ADMINISTRATIVE SERVICES A. SERVICE COMPANY agrees to provide the following administrative services: 1. Provide DISTRICT, during the term of this Agreement a tabulated Monthly Status Report on all active claims during the term of this Agreement, indicating the status of each reported claim assigned to SERVICE COMPANY, the details of each claim, the payments during the month and the reserve status. 2. Establish a bank account from which claims are paid. The SERVICE COMPANY will provide transaction registers of al such expenditures. The DISTRICT will reimburse said account on a monthly basis in the amount the account is depleted. Claims Administration Services Agree1nent Page 3 of 10

4. DISTRICT RESPONSIBILITIES: DISTRICT agrees to pay for the actual and necessary cost of investigative services where expert and professional assistance is required, consisting of professional photography, laboratory services, property damage appraisals, taking statements from witnesses away from the premises of SERVICE COMPANY, on-site investigation, copying material and other records, trial preparation and professional engineering services including but not limited to, map preparation, accident reconstruction, material analysis and premises evaluation. 5. CONSIDERATION: A. In consideration for services rendered, DISTRICT agrees to pay SERVICE COMPANY fees calculated as follows: For the period July 1, 2004 - June 30, 2005 V.P./A.V.P./Claims Manager- $ 81.00 per hour Claims Examiner - $ 71.00 per hour Expenses - 42% of hourly billings Minimum per flie charge One hour Annual Minimum fee - $6,000.00 Annual Maximum fee $22,000.00 B. The annual minimum fee is due and payable on July 1 for each contract year. Additional fees in excess of the annual minimum, if any, are due and payable within thirty (30) days of presentation of the SERVICE COMPANY audit lllvolce. C. SERVICE COMPANY will continue to service the DISTRICT if the DISTRICT directs, following expiration of each contract year, at the rates then in effect, for the handling of open flies and new claims submitted, pending finalization of new contract rates. 6. TERMINATION: Either Party may terminate this Agreement by providing sixty (60) days prior written notice to the other Party. 7. DISPOSITION OF FILES ON TERMINATION OF AGREEMENT: A. All flies on each claim shall be the property of DISTRICT. Claims Auministration Services Agreement Page 4 of 10

B. In the event of termination or cancellation of the Agreement, SERVICE COMPANY shall return all ftles to DISTRICT unless DISTRICT requests SERVICE COMPANY to continue to process any 61e(s), which file(s) SERVICE COMPANY will continue to process on a fee basis as negotiated. 8. INDEMNIFICATION AND DEFENSE: A. SERVICE COMPANY shall use ordinary care in the exercise of its powers and the performance of its duties under this Agreement. B. SERVICE COMPANY shall indemnify, hold the DISTRICT harmless from and defend the DISTRICT, its officials, officers, agents and employees against all claims, demands, actions, or liability for injury or damage to persons or property arising out of the negligence or willful misconduct, or omission of SERVICE COMPANY, it officials, officers, employees, agents or consultants resulting therefrom. C The DISTRICT shall defend, indemnify and hold SERVICE COMPANY harmless from and defend SERVICE COMPANY, its officials, officers, agents and employees against all claims, demands, actions or liability for injury or damage to persons or property arising out of the negligence or willful misconduct or omissions of DISTRICT, its employees and agents resulting therefrom. 9. NO THIRD PARTY BENEFICIARY: Notwithstanding any provision herein to the contrary, this Agreement is not intended and shall not be construed as creating or conferring any rights or remedies on any third parties that are not Parties to this Agreement. Enforcement of any remedy for breach of this Agreement may only be pursued by the Parties to this Agreement. 10. ENTIRE AGREEMENT: This Agreement contains the entire understanding related to the services covered by this Agreement and supersedes all prior and collateral communications, reports, agreements, or understandings, if any, between the Parties regarding the services 11. MODIFICATION and AMENDMENT: No modification or amendments to any provision hereof shall be binding unless in writing and signed by authorized representatives from both Parties. Claims Administration Services A",'reemcnt Page 5 of 10

12. NONWAIVER: No failure or delay in exercising any right, power or privilege under this Agreement shall be construed as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement. 13. SEVERABILITY: The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any of the other provisions of this Agreement, all of which shall remain in full force and effect. 14. ASSIGNMENT: This Agreement may not be assigned by either Party without the prlor written consent of the other Party. 15. WARRANTIES: Subject to the provisions of this Agreement, the time and manner of performance of the services set forth herein shall be at the discretion of SERVICE COMPANY, provided, however, that SERVICE COMPANY shall diligently proceed with the performance of said services and shall devote such time, skill and effort as may be necessary in the attainment of the objectives of this Agreement. 16. ARBITRATION: Any dispute arising under this Agreement, including, without limitation, all disputes relating in any manner to the performance or enforcement of this Agreement shall be resolved by arbitration in the County of Los Angeles pursuant to the rules of the American Arbitration Association, as amended or augmented in this Agreement (the "Rules"). Arbitration shall be initiated as provided by the Rules, although the written notice to the other party initiating arbitration shall also include a description of the claim(s) asserted and the facts upon which the claim(s) are based. Arbitration shall be final and binding upon the Parties and shall be the exclusive remedy for all claims subject hereto, including any award of attorneys' fees and costs. Either Party may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award. All disputes shall be decided by a single arbitrator. The arbitrator shall be selected by mutual agreement of the Parties within thirty (30) days of the effective date of the notice initiating the arbitration. If the Parties cannot agree on an arbitrator, then the complaining Party, within thirty (30) days of the expiration of the period for agreeing on an arbitrator, shall notify the AAA and request selection of an arbitrator in accordance with the Rules. The arbitrator shall have only such authority to award equitable relief, damages, costs, and fees as a court would have for the particular claim(s) asserted. In no event shall the arbitrator award punitive damages of any kind. The Parties acknowledge that the purposes of utilizing arbitration is to avoid lengthy and expensive discovery and allow for prompt ClailTIS Adrninistration Services AgrCt'1l1cnt Page 6 of 10

resolution of the dispute. The arbitrator shall have the power to limit or deny the request for documents or a deposition if the arbitrator determines that the request exceeds those matters, which are directly relevant to the claim(s) in controversy. Any document demand and response shall conform to Code of Civil Procedure section 2031. Any deposition notice shall conform to Code of Civil Procedure section 2025. The Parties may make a motion for protective order or motion to compel before the arbitrator with regard to the discovery, as provided in Code of Civil Procedure sections 2025 and 2031. 17. FORCE MAJURE: N either Party shall be liable nor deemed to be in default for any delay or failure in performance under this Agreement or any other interruption of service or employment deemed resulting, directly or indirectly, from acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquakes, floods, failure of transportation, machinery or supplies, vandalism, strikes, or other work interruptions or any similar or dissunilar cause beyond the reasonable control of either Party. However, both Parties shall make good faith efforts to perform under this Agreement in the event of any such circumstances. 18. ATTORNEYS' FEES: In the event of any dispute relating to this Agreement, the prevailing party shall be entitled to attorneys' fees and costs, including but not limited to, those incurred in resolving the dispute. 19. APPLICABLE LAW and VENUE: This Agreement shall be governed by and interpreted in accordance with the laws of the State of California. Venue shall be in the County of Los Angeles, California. 20. CONSTRUCTION: Preparation of this Agreement has been a joint effort of the Parties and the resulting document shall not be construed more severely against one of the Parties than against the other. Any rule of construction that ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement, or any amendments or exhibit hereto. 21. COMPLIANCE WITH LAWS: SERVICE COMPANY shall comply with all applicable Federal, State and local laws, rules, regulations, ordinance, policies and procedures in the conduct of services as specified. Cbin1s Administration Services Agrec1nent Page 7 of 10

22. INDEPENDENT CONTRACTOR: In the performance of the agreed services as outlined in this Agreement, SERVICE COMPANY is an independent contractor and is not an officer, agent, fiduciary, or employee of the DISTRICT. Nothing contained in this Agreement shall be construed to create the relationship of employer and employee between SERVICE COMPANY and DISTRICT. 23. INSURANCE: SERVICE COMPANY shall procure and maintain the following minimum coverage at all times during the period of the Agreement and name DISTRICT and its officers, agents and employees as additional insureds: A. Workers' Compensation. If SERVICE COMPANY employs any person to perform work in connection with this Agreement, SERVICE COMPANY shall procure and maintain at all times during the performance of such work Workers' Compensation Insurance in conformance with the laws of the State of California and federal laws where applicable. B. Bodily Injury, Death and Property Damage Liability Insurance. SERVICE COMPANY shall procure and maintain at all times during the performance of this Agreement General Liability Insurance (including motor vehicle operation) covering SERVICE COMPANY for liability arising out of the operations of SERVICE COMPANY and it subcontractors. The policy(ies) shall be subject to a limit for each occurrence of One Million Dollars ($1,000,000.00) including: C. Professional Liability Insurance. SERVICE COMPANY shall also maintain Professional Liability Insurance covering performance under this Agreement with a limit of liability of One Million Dollars ($1,000,000.00) for any one claim. 1. SERVICE COMPANY shall provide DISTRICT with no less than thirty (30) days written notice prior to cancellation and shall waive all rights to subrogation. 2. SERVICE COMPANY shall notify DISTRICT 1n the event of material change in, or failure to renew each policy. 3. SERVICE COMPANY agrees to provide DISTRICT with certificates of insurance as evidence of compliance with the requirements herein prior to the commencement of work. 4. SERVICE COMPANY understands that if SERVICE COMPANY fails to secure or maintain any policy of insurance required hereunder, DISTRICT may, at its sole discretion, secure such policy of insurance in the name of and for the account of SERVICE COMPANY in its capacity as Claims Claims Administration Services Agrcc111cnt Page 8 of 10

Administrator, and in such event, SERVICE COMPANY shall reimburse DISTRICT upon demand for the costs thereof. 24. CONFLICT OF INTEREST: In the event a claim or incident is reported to SERVICE COMPANY by DISTRICT and it is determined that the claimants or cross-complainants are also clients of SERVICE COMPANY to whom SERVICE COMPANY is committed to serve by contract in preference to the DISTRICT, SERVICE COMPANY shall notify the DISTRICT of the actual or potential conflict of interest. If SERVICE COMPANY or DISTRICT elects to have another independent investigator/adjuster administer the claim, SERVICE COMPANY shall assist the DISTRICT in obtaining such serv1ce. 25. NOTICE: All notices, requests, demands and other communication hereunder shall be in writing and shall be deemed to have been duly given, if personally delivered, upon delivery, or if mailed, when mailed by registered or certified mail, postage prepaid and properly addressed to the Parties or their assignees at the following address (or at such address as shall be given in the manner herein provided), in which case it shall be effective five (5) business days after the postmark date: Ifto KEENAN: If to DISTRICT: Keenan & Associates 2355 Crenshaw Blvd., Suite 200 Torrance, CA 90501 Attention: Nancy Finberg 720 Santa Barbara Street Santa Barbara, CA 93101 Attention: Mary T. Stark This Agreement may also be executed by facsimile signatures, which will be effective as if original signatures. Each Party appending signature hereto represents and warrants that he or she has the necessary authority bind the principal set forth below. SANTA BARBARA SCHOOL DISTRICTS BY: Signature: TITLE: ADDRESS: Dated at, California, this day of, 2004. Claims Administration Services Agreement Page 9 of 10

KEENAN & ASSOCIATES BY: Signature: TITLE: ADDRESS: ----------------------------- 2355 Crenshaw Blvd., Suite 200 Torrance, CA 90501 Date at, California, this day of, 2004. Claims Administration Services Agreement Page 10 of 10