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HomeMy WebLinkAbout5G - PropertyRoom.com Agreement MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: May 18, 2009 5G Randy Hofstad, Lieutenant CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER TO ENTER INTO AN AGREEMENT WITH PROPERTROOM.COM TO DISPOSE OF UNCLAIMED PROPERTY. Introduction The Police Department is requests the Council's approval to contract with Property Room.com. This would allow the Police Department to dispose of abandoned and unclaimed personal property in a more efficient and timely manner than the process currently used. Historv Police departments accumulate a large amount of unwanted or unclaimed personal property and our department is no exception. All of this property must be disposed of since it is of no use to the city and to provide space for more property. In the past, property has reached or even exceeded our limitations for storage. One of the biggest issues is finding enough space to store larger items, like bicycles, and the ultimate disposal of such property. The City Ordinance states, "In the event that the property remains unclaimed in the possession of the City for a period of three (3) months, the property shall thereafter be sold to the highest bidder at a public auction conducted by the Chief of Police of the City. Such auction shall be held after two (2) weeks published notice setting forth the time and place thereof and the property to be sold." Currently we retain any items of value and destroy anything, such as alcohol or drug paraphernalia, that have no value. The retained items are put aside and auctions are held with neighboring police departments in an effort to be more efficient and attract a larger number of bids by having more items. The auctions are usually held every three or fours years, however personnel time and auctioneer fees are making this these city held auctions less practical. In addition, Shakopee, one of the cities that generally participates in these auctions, has recently contracted with PropertyRoom.com. The items contributed by Shakopee to the group will no longer be available and we expect the number of bidders who participate will decline. The last auction Prior Lake was involved in was in 2006 and grossed approximately $430.00 before advertising expenses and employee costs were subtracted. The current system is not profitable or efficient. Storing unclaimed and abandoned property for several years takes up the Police Department's limited storage space is a safety hazard and creates an untidy appearance. Neighboring police departments are also looking at other alternatives because of similar experiences. www.cityofpriorlake.com . iPhone.>~&2A47;9800.'/P&1z952..447.4245 ISSUES: FINANCIAL IMPACT: Current Circumstances It appears that the internet can offer a solution. PropertyRoom.com provides auctions services in a unique format. This is a worldwide internet based auction site which is available all day, everyday. Proprietary services provided by the vendor include: . Timely and regular pick up and removal of the property from one or more locations. . Bar-coded tracking of all items for immediate electronic review 24 hours a day. . Electronic and hard copy manifest forms provided. . A complete inventory management and tracking system. . Preparation for sale of auction items to increase values which includes testing, cleaning, reasonable repairs and grouping of some items to create higher value "sales units." . Full description and multiple digital photographs of items . Auction items that are obtained solely from law enforcement departments. . Rechecking of the serial number of auction items to compare with a stolen item database. . Multiple auction listings for items that do not sell the first time. . Donation to charitable organizations, destruction or return of all unsold items. . Collection of money from auction winners. There are currently over 1600 law enforcement agencies in 47 states contracting with PropertyRoom.com., including approximately 30 in Minnesota. Five different local police departments that use PropertyRoom.com were contacted and each of them had positive comments about their experiences with PropertyRoom.com. The PropertyRoom.com method of sale conforms with the City Code requirements for conducting a public auction. The Department believes the revenue the City will receive from using PropertyRoom.com to dispose of the unclaimed property will exceed the revenue the City receives from the current method used to dispose of this type of property. The Police Department will keep records of our experience using PropertyRoom.com to monitor the sale price and returns. If our experience is less than desirable we can terminate the contract and consider other alternatives for disposing of unclaimed property. By contracting with an outside vender, the Police Department has identified an efficient and effective method to sell unclaimed property and possibly recover revenue. It is also important to note that the City is not obligated to sell all of it's items through this company; the City can use them once or as often as needed. PropertyRoom.com does not charge law enforcement agency's a fee for selling property. Instead, they receive a percentage of the proceeds from the on-line auction. The breakdown of the split between PropertytRoom.com and their clients on winning bids is: . 50% split for any item sold for $1000 or less . 75% (to the client) for any items sold for over $1000. The company does not charge a pick up fee, instead it uses a fuel surcharge based on current diesel fuel prices. Other departments indicate that such surcharges have ranged between $12 and $20 per pick up. The cost to publish the notice with the date, time, place and list of items being sold is additional. PropertyRoom.com advises that the required notice will comply with State Statute and City Code. Any profits generated from the sale of property using PropertyRoom.com will be deposited in the general fund. ALTERNATIVES: 1) Adopt the Resolution authorizing the Mayor and City Manager to enter into a contract with PropertyRoom.com to dispose of unclaimed, abandoned and select items of seized property. 2) Deny approval and direct further action. RECOMMENDED MOTION: Alternative 1. 4646 Dakota Street S.E. Prior Lake, MN 55372-1714 RESOLUTION 09-XX A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE A CONTRACT WITH PROPERTYROOM.COM TO AUCTION UNCLAIMED PROPERTY MOTION BY: SECOND BY: WHEREAS, during the course of official business the Police Department accumulates a large amount of unclaimed or unwanted property; and WHEREAS, State Statute Section 471.195 states any city may by ordinance provide for the custody and disposal of property to the highest bidder at public auction or sale or by a private sale through a nonprofit organization. WHEREAS, The Prior Lake City Code allows for property that has not been claimed within 90 days to be sold to the highest bidder at a public auction; and WHEREAS, the procedure currently used by the City to dispose of unclaimed and unwanted property is not timely, efficient or cost effective; and WHEREAS, PropertyRoom.com provides property disposition services by auction; and WHEREAS, Sixteen hundred law enforcement agencies in 47 states (include 30 in Minnesota) use PropertyRoom.com to assist them with the auction and disposition of unclaimed and unwanted property. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1) The recitals set forth above are incorporated herein. 2) The Mayor and City Manager are authorized to execute a contract with PropertyRoom.com to auction unclaimed and unwanted property. 3) All proceeds from the auctions shall be deposited in the City's General Fund. PASSED AND ADOPTED THIS 18th DAY OF MAY 2009. YES NO I Haugen I Erickson I Hedberg I LeMair I Millar Haugen Erickson Hedberg LeMair Millar City Manager, City of Prior Lake www.cityofpriorlake.com Phone 952.447.9800 / Fax 952.447.4245 PROPERTY DISPOSITION SERVICES AGREEMENT PropertyRoom.com, Inc., a Delaware corporation ("PropertyRoom" or "PRC"), enters into this agreement (the "Agreement"), with the client identified below (the "Owner") for the auction and disposition of personal property (the "Disposition Services"), in accordance with the Terms and Conditions and Addenda, if any, attached hereto and listed below. Beginning (the "Start Date"), Owner engages the Services ofPRC. Owner Information Schedules, Supplements & Other Attachments Mark included attachments: Owner Name Terms and Conditions Yes Address Addendums: City, State Zip Code Phone Email This Agreement, including all of the terms and conditions set forth in the attached Terms and Conditions as well as all other attachments indicated in the box above, comprises the entire Agreement between the Parties. This Agreement cannot be modified except in writing by the duly authorized representatives of both parties. Owner PropertyRoom.com Signor Name Signor Name Signor Title Signor Title Signature Signature Signature Date Signature Date ProoertvRoom.com. Inc. 26421 Crown Valley Parkway, Ste 200 Mission Viejo, California 92691 + 1 (949) 282-0121 Federal Tax ID 86-0962102 1 of 7 PROPERTY DISPOSITION SERVICES AGREEMENT TERMS AND CONDITIONS 1. Property to be Sold. From time to time, Owner will designate items of personal property (the "Property") that it desires to provide to PRC for Disposition Services. PRC retains the right to accept or reject certain items in its sole discretion. 2. Title. Owner shall retain legal title to the Property until it is purchased by auction or otherwise disposed of in accordance with this Agreement at which time Owner will be deemed to have transferred title to the purchaser or other acquirer of the item of Property (the "Buyer"). Owner appoints PRC as its attorney-in-fact to sign any and all documents necessary to assign to Buyers all of Owners right, title and interest in and to Property sold or disposed. Cash receipts, accounts receivable, contract rights, notes, general intangibles, and other rights to payment of every kind, arising out of the sales and dispositions of Property (collectively the "Proceeds") belong to Owner, subject to PRC's right to PRC's Net Proceeds and funds attributable to credit card processing costs and other transaction costs. Owner's Property shall, at all times before sale or disposition, be subject to the direction and control of Owner. 3. Method of Selling Property. a. Portable Property Items. PRC will, on Owners behalf, pick-up, store and list Property for sale by auction to the public on the internet on one or more domain names selected by PRC. To the extent that any Property is not sold by auction, PRC may, in any commercially reasonable manner selected by PRC, dispose of Property. PRC will determine all aspects, terms and conditions of auctions of Property and dispositions of Property not purchased at auction, subject to the ultimate control of Owner. PRC will be responsible for all phases of submitting the Property for auction, including, but not limited to, determining when Property will be auctioned, setting the opening and reserve prices of Property, ifany; determining the selling price, setting the length of time Property will be auctioned; creating text and graphics to describe and depict Property submitted for auction; collecting Buyer information (such as name, billing address, shipping address, and credit card information); approving Buyer credit card purchase transactions; and collecting auction proceeds for completed sales from Buyers. PRC shall use reasonable commercial efforts in auctioning and selling the Property on the Internet and disposing of Property that does not sell at auction. PRC shall sell and dispose of all Property "as is" without any liability to the Owner. PRC is solely responsible for identifying and resolving sales and use tax collection issues arising from Property sales, including the necessity of charging and collecting such taxes. b. Large Property Items. PRC will, at Owner's request and on Owner's behalf, list physically large Property ("Large-Items") for sale by auction, including but not limited to cars, trucks, boats, planes and bulk lots of bicycles. For Large-Items, PRC offers Owner different selling options ("Silver," "Gold," "Gold-Plus" and "Platinum"), each with different service components and associated pricing. (1) In-Place Options. For Silver, Gold and Gold-Plus ("Gold+"), PRC will auction Large-Items in-place, and in this context, "in-place" means that PRC will not pick-up and store these specific Items but rather Owner will maintain physical control until transfer of Items to Buyers. (2) Haul-away Option. For Platinum, PRC will, in conjunction with a partner and to the extent practical, pick-up and haul-away Large-items, selling via online auction and transferring title and physical possession to Buyers as described in Portable Property Items. (3) Large-Item Service Summary. The Large-Item Auction Services Option Table below depicts service components associated with each option. 2 of? PROPERTY DISPOSITION SERVICES AGREEMENT Method of Selling Property: Large-Item Auction Services Option Table Responsible Pa -ty (if applicable) Silver Gold Gold+ Platinum PRC PRC PRC PRC PRC PRC PRC PRC PRC PRC PRC PRC Owner PRC PRC Owner PRC PRC Owner PRC PRC Owner Owner PRC Owner Owner Owner Service Component 1. List Large-Item for In-Place online auction 2. Checklist review and coordination 3. Listing write-up and marketing I 4. Auction and auction technology management 5. Customer Support to Bidders 6. Coordinate Buyer payment and Large-Item pick-up I 7. Transaction (payment) processing I 8. Photographing, vehicle review, equipment description I 9. Provide or procure asset title, as applicable I 10. Pick-up and haul-away for off-premises online auction * At Owner request, PRC will acquire title through its partner and pass-through title acquisition cost. PRC PRC PRC PRC PRC PRC PRC Owner* PRC 4. Term and Termination. a. This Agreement will become effective as of the Start Date and will continue for an initial term of one (1) year (the "Initial Term") following the "Launch Date" (as defined herein) and thereafter will automatically renew for consecutive one (1) year terms unless written notice of non-renewal is provided by either party to the other at least sixty (60) days prior to the expiration of the then current term. b. As used herein, "Launch Date" shall mean the date on which PRC completes the first auction of Owner Property . c. This Agreement may be terminated ifthere is a breach by either party of any obligation, representation or warranty contained in this Agreement, upon thirty (30) days prior written notice to the other party unless the breach is cured within the thirty (30) day period, provided, however, if the breach is not capable of being cured within thirty (30) days, the breaching party will have a reasonable amount of time to cure the breach if it begins to cure during the thirty (30) day period and proceeds diligently thereafter. The written notice will specify the precise nature of the breach. d. The rights of the parties to terminate this Agreement are not exclusive of any other rights and remedies available at law or in equity, and such rights will be cumulative. The exercise of any such right or remedy will not preclude the exercise of any other rights and remedies. e. Notwithstanding any termination by either party of this Agreement, PRC will continue to remit amounts due to Owner under this Agreement in connection with any sales made before the effective date of the termination. At the time of termination, any unsold inventory shall continue to be auctioned by PRC or returned to Owner, at Owner's election and cost. 5. Allocation of Sales Proceeds. a. Portable Property Items (1) Sales Price. The total amount paid by Buyer shall be called the "Sales Price." The Sales Price shall include the winning bid amount (the "Winning Bid") and all costs, shipping and handling charges, taxes, and insurance costs associated with the transaction and paid by Buyer. (2) The Split. For each item of Property, Owner will be credited with 50% of the first $1,000 of the Winning Bid and 75% of the Winning Bid portion, if any, that exceeds $1,000. From this amount, the Owner's pro rata share of transaction fees (the "Processing Costs"), if any, will be deducted. (3) Processing Costs. Credit card processing costs ("Credit Card Cost") and affiliate processing fees (the "Affiliate Fees," which include commissions and processing costs paid to third parties IF they sent the winning bidder to the website), will be borne by Owner and PRC in proportion to the percentage of the revenue credited to the parties for each underlying transaction. (4) Net Proceeds. Amounts received by the Owner will be called "Owner's Net Proceeds". Portable Item Example. The following example illustrates allocation of proceeds from a Portable Property Item sale. Assume an item of Property sells at auction for a $100 Winning Bid; the Buyer pays shipping and handling of $1 0, insurance of $2, and sales tax of $6. The Buyer pays the Sales Price of $118.00 ($100 + $10 + $2 + $6) by credit card, and the Credit Card Cost is 3% of the Sales Price or $3.54 (0.03 x $118) and the Affiliate Fee is 4.8% or $4.80 (0.048 x $100). The Owner and PRC each share 50% of the 3 of 7 PROPERTY DISPOSITION SERVICES AGREEMENT underlying Winning Bid, therefore Credit Card Costs and Affiliate Fees are also shared equally, $1.77 each ($3.5472) for Credit Cost and $2.40 each ($4.80 7 2) for Affiliate Fees. The Owner's Net Proceeds are $45.83 ($50.00 less $4.17). Note: less than lout of 10 transactions include Affiliate Fees. (5) Fuel Surcharge. The Company does NOT charge pick-up fees. Instead, a fuel surcharge applies per Portable Item manifest when diesel prices rise above a specific level as shown in the Fuel Surcharge Schedule below. The Company benchmarks average diesel retail prices as published online by the Energy Information Administration of the US Department of Energy and resets its fuel surcharge quarterly based on pricing from the prior quarter. Fuel surcharges, if any, deduct from monthly Owner's Net Proceeds. Fuel Surchar/(e Schedule I Retail Diesel (per gal) Fuel Surcharge* I Less than $2.50 $ 0.00 I $ 2.50 to $ 2.99 $ 12.40 I $ 3.00 to $ 3.49 $ 24.80 I $ 3.50 to $ 3.99 $ 37.20 I $ 4.00 to $ 4.49 $ 49.60 I $ 4.50 to $ 4.99 $ 62.00 I $ 5.00 to $ 5.49** $ 74.40 I * Divides across locations and/or sub-accounts picked-up same day ** Table continues upward at same rate (6) To the extent that Property is not sold by Auction and PRC disposes of Property in a commercially reasonable manner (see "Method of Selling Property" section), including, but not limited to, sending to a charity, recycling center, landfill, or scrap metal processor, Owner understands and agrees to the following. (a) When Property is not sold by Auction, PRC disposition activities create additional PRC processing costs (the "Disposal Costs") and potentially a disposition Sales Price (the "Disposition Proceeds"). (b) Disposal Costs include, but are not limited to, labor cost of reloading Property onto a truck, labor and vehicle costs associated with transporting Property for disposition, and third-party fees, such as landfill, recycling, and hazardous material disposal fees. (c) Disposition Proceeds include, but are not limited to, a Sales Price obtained for scrap metal. (d) PRC will bear the burden of Disposal Costs. (e) PRC will retain Disposition Proceeds, ifany, as an offset to Disposal Costs, except if Disposition Proceeds for an item of Owner Property exceed $250, in which case PRC will credit Owner a portion of Disposition Proceeds per "The Split" and "Example" above. b. Large- Items. (1) Sales Price, Processing Costs and Net Proceeds. Calculated in a manner directly analogous to Portable Items. (2) The Split. For each Large-Item of Property, Owner will be credited with a percent of the Winning Bid which varies according to the Large-Item service option employed. (a) Silver. Owner will be credited with 100% of the Winning Bid and PRC will charge Buyer a 15% Buyer's Premium. (b) Gold. Owner will be credited with 95% of the Winning Bid and from this amount, the Owner's pro rata share of the Processing Costs, ifany, will be deducted. PRC will charge Buyer a 15% Buyer's Premium. (c) Gold-Plus. Owner will be credited with 90% of the Winning Bid and from this amount, the Owner's pro rata share of the Processing Costs, if any, will be deducted. PRC will charge Buyer a 15% Buyer's Premium. (d) Platinum. Owner will be credited with 70% of the Winning Bid less any title pass-through fees from PRC partner. Large-Item Example. Assume a Large-Item sells at auction for a Winning Bid of$l,OOO.OO, and with no shipping or handling charges yields a $1,000.00 Sales Price. For the Silver, Gold and Gold-Plus options, 4 of? PROPERTY DISPOSITION SERVICES AGREEMENT PRC collects and retains a 15% Buyer's Premium, $150.00 (0.15 x $1,000), from Buyer. With regard to collecting the Sales Price and sharing proceeds, the approach differs by option: Silver. Owner completes the sale by collecting the $1,000.00 Sales Price from Buyer, retaining 100% as Owner's Net Proceeds. Gold. PRC completes the sale by collecting the $1,000.00 Sales Price from Buyer. The underlying Winning Bid is shared 95% by Owner, $950 (0.95 x $1,000) and 5% by PRC, therefore a 3% ($30.00) Credit Card Cost is split 95% by Owner, $28.50 (0.95 x $30) and 5% by PRC, $1.50 (0.05 x $30). The Owner's Net Proceeds are $921.50 ($950.00 less $28.50). Gold-Plus. PRC completes the sale as described in Gold, but with a 90-10 Split. Platinum. PRC complete the sale as described in Gold, but with a 70-30 Split and with a deduction of any title acquisition pass-through fees. 6. Payment Terms. Once every month, PRC will pay to Owner the amount of Owner's Net Proceeds payable for completed sales during the preceding month. Sales are deemed completed when all items comprising a line item on the original manifest or other list of Property are sold. With each payment of Owner's Net Proceeds, PRC will make available to Owner a detailed report setting forth the following information for the immediately preceding month: a. The completed sales during the prior month, including the total amount of related proceeds collected, Owner and PRC share of Processing Costs, and the Owners Net Proceeds; b. Other dispositions of Property during the month; and c. The Property, if any, inventoried by PRC at the end of the month. 7. PropertyRoom's Obligations Concerning Property in Its Possession. With respect to Property in PRC's possessiOn: a. PRC will exercise due care in the handling and storage of any Property; b. PRC shall keep the Property free of liens, security interests, and encumbrances, and shall pay when due all fees and charges with respect to the Property; c. PRC shall sign and deliver to Owner any UCC-l financing statements or other documents reasonably requested by Owner; and d. PRC shall obtain and maintain insurance in an amount (determined by PRe) not less than the replacement value of Property in its possession. The insurance will cover the Property against fire, theft, and extended coverage risks ordinarily included in similar policies. PRC shall give Owner a certificate or a copy of each of the above upon Owner's request. 8. Owner Obligations. Owner will use its best efforts to provide to PRC such Property as becomes available for sale to the public. Owner will complete paperwork reasonably necessary to convey custodial possession of the item of Property to PRC, including a written manifest or list that describes the item of Property in sufficient detail for identification. Owner agrees that it will not provide Property that is illegal or hazardous, including but not limited to explosives, firearms, counterfeit or unauthorized copyrighted material ("knock-offs"), poisons or pharmaceuticals. In addition, to help comply with public notification statutes as well as to support internet traffic flow to the PRC auction website, Owner agrees to place a permanent clickable link (the "Link") to www.ProoertvRoom.com on one or more Owner websites. PRC will supply Link technical requirements, text and images to Owner. 9. Restrictions on Bidding. PRC and its employees and agents may not directly or indirectly bid for or purchase auctioned Property on the PRC web site. 10. Representations and Warranties of Owner. Owner hereby represents, warrants and covenants as follows: a. Property delivered to PRC is available for sale to the general public without any restrictions or conditions whatever; and b. Owner has taken all required actions under applicable law that are conditions precedent to Owner's right to transfer title to the Property to Buyers (the "Conditions Precedent"). 11. Books and Records. PRC will keep complete and accurate books of account, records, and other documents with respect to this Agreement (the "Books and Records") for at least three (3) years following expiration or termination of this Agreement. Upon reasonable notice, the Books and Records will be available for inspection 5 of? PROPERTY DISPOSITION SERVICES AGREEMENT by Owner, at Owner's expense, at the location where the Books and Records are regularly maintained, during normal business hours. 12. Indemnification. Subject to the limitations specified in this Indemnification section of this Agreement, each party will indemnify, hold harmless and defend the other party and its agents and employees from and against any and all losses, claims, damages, liabilities, whether joint or several, expenses (including reasonable legal fees and expenses), judgments, fmes and other amounts paid in settlement, incurred or suffered by any such person or entity arising out of or in connection with a. the inaccuracy of any representation or warranty made by the party hereunder, b. any breach of this Agreement by the party, or c. any negligent act or omission by the party or its employees or agents in connection with the performance by the party or its employees or agents of obligations hereunder, provided the negligent act or omission was not done or omitted at the direction of the other party. 13. Limitations on Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF PROPERTY, OR ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 12. LIABILITY ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES. THE MAXIMUM LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED THE AGGREGATE AMOUNT OF PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY HEREUNDER IN THE YEAR IN WHICH LIABILITY ACCRUES; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT TO THE AGREEMENT. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, OWNER'S LIABILITY IS NOT LIMITED UNDER THIS AGREEMENT WITH RESPECT TO LIABILITY ARISING FROM OWNERS FAILURE TO SATISFY TIMELY ALL CONDITIONS PRCECEDENT. 14. Assignment. This Agreement may not be assigned, in whole or in part, by either of the parties without the prior written consent of the other party (which consent may not be unreasonably withheld or delayed). Notwithstanding the foregoing, an assignment of this Agreement by either party to any subsidiary or affiliate or a third party acquisition of all or substantially all of the assets of such party will not require the consent of the other party, so long as such subsidiary, affiliate or acquiring entity assumes all of such party's obligations under this Agreement. No delegation by PRC of any of its duties hereunder will be deemed an assignment of this Agreement, nor will any change in control nor any assignment by operation oflaw by either party. Subject to the restrictions contained in this section, the terms and conditions of this Agreement will bind and inure to the benefit of each of the respective successors and assigns of the parties hereto. 15. Notices. Any notice or other communication given under this Agreement will be in writing and delivered by hand, sent by facsimile (provided acknowledgment of receipt thereof is delivered to the sender), sent by certified, registered mail or sent by any nationally recognized overnight courier service to the addresses provided on the signature page of the Agreement. The parties may, from time to time and at any time, change their respective addresses and each will have the right to specify as its address any other address by at least ten (10) days written notice to the other party. 16. Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 6 of? PROPERTY DISPOSITION SERVICES AGREEMENT 17. Complete Agreement. This Agreement and any related documents delivered concurrently herewith, contain the complete agreement between the parties relating to the subject of this Agreement and supersede any prior understandings, agreements or representations by or between the parties, written or oral, which may be related to the subject matter hereof in any way. 18. Attorneys' Fees and Legal Expenses. If any proceeding or action is brought to recover any amount under this Agreement, or for or on account of any breach of, or to enforce or interpret any of the terms, covenants, or conditions of this Agreement, the prevailing party will be entitled to recover from the other party, as part of the prevailing party's costs, reasonable attorneys' fees, the amount of which will be fixed by the court, and will be made a part of any judgment rendered. 19. Further Assurances. PRC and Owner will each sign such other documents and take such actions as the other may reasonably request in order to effect the relationships, services and activities contemplated by this Agreement and to account for and document those activities. 20. Governing Law. The internal law, and not the law of conflicts, of the state in which the Owner is located will govern all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement. The proper venue for any proceeding at law or in equity will be the state and county in which the Owner is located, and the parties waive any right to object to the venue. 21. Relationship of the Parties. The relationship created hereunder between Owner and PRC will be solely that of independent contractors entering into an agreement. No representations or assertions will be made or actions taken by either party that could imply or establish any agency, joint venture, partnership, employment or trust relationship between the parties with respect to the subject matter of this Agreement. Except as expressly provided in this Agreement, neither party will have any authority or power whatsoever to enter into any agreement, contract or commitment on behalf of the other, or to create any liability or obligation whatsoever on behalf of the other, to any person or entity. Whenever PRC is given discretion in this Agreement, PRC may exercise that discretion solely in any manner PRC deems appropriate. 22. Force Majeure. Neither party will be liable for any failure of or delay in the performance of this Agreement for the period that such failure or delay is due to acts of God, public enemy, war, strikes or labor disputes, or any other cause beyond the parties' reasonable control (each a "Force Majeure"), it being understood that lack of financial resources will not to be deemed a cause beyond a party's control. Each party will notify the other party promptly of the occurrence of any Force Majeure and carry out this Agreement as promptly as practicable after such Force Majeure is terminated. The existence of any Force Majeure will not extend the term of this Agreement. 23. Counterparts. This Agreement may be signed in any number of counterparts. 7 of 7 Addendum to Property Disposition Services Agreement This addendum is attached to and made part of Property Disposition Services Agreement dated (the "Agreement"). In the event of a conflict between the provisions of the main body of the Agreement and this Addendum, this Addendum will govern. The Agreement is modified as follows: 1. It is Understood that there would be no cost charged back to the Department or The City for property not sold at auction. The only time an expense is incurred is if the Department requests for property to be returned for some reason and then shipping charges back to the Department would be incurred. 2. Fuel Sur-Charge: The Company benchmarks average diesel retail prices as published online by the Energy Information Administration of the US Department of Energy and resets its fuel surcharge quarterly based on pricing from the prior quarter. Fuel surcharges, ifany, deduct from monthly Owner's Net Proceeds. 3. Property deemed to be sellable from The Department would be property that has meet State Public Notification Statutes and is releasable for Auction. Paragraph 4: Term and Termination: There will be No Automatic Renewable to this Paragraph. It will be solely up to The Department to renew this Agreement. Paragraph 5 . Allocation of Sales Proceeds: 6. It is understood that there will be no Disposition Fees passed on to the Department. Paragraph 8: Owner's Obligations: It is understood that the Department is NOT OBLIGATED to provide a permanent link to the Propertyroom.com Web Site. Paragraph 11: Books and Records: It is understood that retention of Books and Records shall be for SEVEN (7) Years. for "Owner Date for PropertyRoom.com Inc Date