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HomeMy WebLinkAbout08-0908THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I.D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY 2 North Second Street Harrisburg, PA 17101, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff NO. 0$ - Qb$ V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, CIVIL ACTION SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd Charlotte, NC 28216 Defendants a -F ACTION FOR DECLARATORY JUDGMENT NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS NOTICE TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 (717) 249-3166 800-990-9108 & HAFER, LLP Dated: b Dg By V vfi Paul R. Walker, Esquire I.D #88714 P. O. Box 999 305 North Front Street Harrisburg, PA 17108 (717) 237-7100 THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I. D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY 2 North Second Street Harrisburg, PA 17101, Plaintiff V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd Charlotte, NC 28216 Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA NO. Of- gyp CIVIL ACTION ACTION FOR DECLARATORY JUDGMENT COMPLAINT 1. The Plaintiff is Pennsylvania National Mutual Casualty Insurance Company ("Penn National"), a mutual insurance company with headquarters located at 1 A 2 North Second Street, Harrisburg, Dauphin County, Pennsylvania. Penn National does business in Cumberland County, Pennsylvania, including with respect to the insurance policy identified in this Complaint. 2. Defendant APEX HOMES, INC., upon information and belief, is a corporation incorporated under the laws of the Commonwealth of Pennsylvania with its principal place of business located at 415 Middleburg, Pennsylvania 17842 ("Apex"). 3. Defendant SCOTT D. WRAY is an individual, upon information and belief, that resides at 724 Whiskey Road, McClure, Pennsylvania 17841, and does business as WRAY'S CONTRACTING ("Wray's") 4. Defendant TIMBERLAKE CROSSING, LLC, Individually and as Assignee of TILSON CREATIONS, INC., upon information and belief, is a Virginia limited liability company formed under the laws of Virginia, with its principal place of business located at 6132-C Brookshire Boulevard, Charlotte, North Carolina 28216 ("Timberlake") 5. Upon information and belief, Timberlake is the owner and developer of a residential townhome project (the "Project") located in Franklin County, Virginia and that work began on the Project in or about April, 2005. 6. Apex manufactures modular housing. As part of the construction for the Project, Timberlake contracted with Apex to provide modular units for the townhome units which comprise the Project. Timberlake also contracted with Apex to erect the modular units at the site of the Project. 2 7. Apex contracted with Wray's to perform the work to erect the modular units at the site of the Project. 8. Apex delivered the modular units to the Project beginning in July, 2005. 9. Timberlake filed a lawsuit on or about July 10, 2007, in the United States District Court for the Western District of Virginia, Roanoke Division, action no. 7:07-cv- 00338 ("Lawsuit"). The Lawsuit names Apex and Wray's as Defendants and Penn National currently is providing a defense to Apex in the Lawsuit. A copy of the Complaint filed in the Lawsuit is attached as Exhibit "A". 10. The Complaint filed in the Lawsuit alleges, inter alia, faulty workmanship causing alleged damage to the modular units, and further alleges two counts: breach of contract and breach of warranty. 11. Penn National issued an insurance policy to Apex, policy number GI-9 0103079, effective January 1, 2005 to January 1, 2006 ("Policy"). The Policy was issued and negotiated through Insurance & Surety, Inc., located in Camp Hill, Cumberland County, Pennsylvania. A copy of the Policy is attached as Exhibit "B" and is incorporated here and alleged as though fully set forth in this Complaint. 12. The Policy does not provide coverage for the claims in the Lawsuit as the gist of such action is contractual in nature. 13. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as there is no "occurrence" within the meaning of the Policy. 3 14. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as such claims and damages are caused by faulty workmanship and as the alleged damages were foreseeable. 15. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as the alleged damages, in whole or in part, are not "property damage" within the meaning of the Policy. 16. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as such claims and alleged damages are excluded by the Policy, including and not limited to, exclusion "j. Damage to Property" and "k. Damage to Your Product". 17. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit, in whole or in part, under endorsement CG 21 67 0402 "FUNGI OR BACTERIA EXCLUSION". 18. Penn National reserves the right to refer to and allege additional express or implied declarations, terms, conditions, definitions, exclusions and other provisions of the Policy. WHEREFORE, Plaintiff, Pennsylvania National Mutual Casualty Insurance Company, respectfully requests the Court to enter judgment in its favor and issue a declaratory judgment that: 1) Apex is not entitled to a defense of the Lawsuit; 2) Defendants are not entitled to coverage under the Policy for the claims and alleged 4 damages in the Lawsuit; 3) Penn National may immediately withdraw from the defense of Apex in the Lawsuit; and 4) or for such other relief as may be appropriate. Respectfully submitted, WAS & HAFER, LLP Paul R. Walker, Esquire I.D. #88714 P. O. Box 999 D t d Q 0-1010e a e : 305 North Front Street Harrisburg, PA 17108 (717) 237-7100 566570 5 VERIFICATION I, Randy Amos, on behalf of Pennsylvania National Mutual Casualty Insurance Company, verify that the foregoing Complaint and the attached documents are based upon the information which has been gathered by me, my counsel and/or others on my behalf in preparation of this lawsuit. The language of the document is that of counsel and is not mine. I have read the document, and to the extent that it is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information, and belief. To the extent that the contents of the document are that of counsel, I have relied upon counsel in making this Verification. I understand that intentional false statements herein are made subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsifications made to authorities. Date: Z (,?o D Casualty Cx ?) b J A M 0d',Of, ®0310AO38 39163S 000&C - 07/25/07 12:50 FA% 540 983 9468 GENTRY LOCKE - A? IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINU ROANOKE DIVISION TIlvI1lERLAKE CROSSING, L.L.C., ) Individually and as Assignee of ) TILSON CREATIONS, INC. ) Plaintiff, } CASE NUMBER: V. APEX HOMES, INC., Serve: Registered Agent: CT Corporation System 4701 Cox Rd. Suite 301 Glen Allen, VA 23060 and SCOTT D. WRAY d/b/a WRAY'S CONTRACTING, Serve: Scott D. Wray 724 Whiskey Road McClure, PA 17841 and WRAY'S CONTRACTING Serve: Scott D. Wray 724 Whiskey Road McClure, PA. 17841 Defendants. 11002 AT ROANOKE, VA FlLEO JUL 10 2007 JOHN F. co HY; Z?Q,7 5 11 //11// l-o-v -oe73 3 COMPLAINT COMES NOW the plaintiff, Timberlake Crossing, L.L.C. ("Plaintiff' or "Timberlake"), by counsel, and files this Complaint against the defendants, Apex Homes, Inc. and Scott D. Wray d/b/a Wray's Contracting, and Wray's Contracting, and in support thereof states as follows: 11 18120/111N1665V1 47/27/07 12:50 FAX 540 983 9468 GENTRY LOCKE Parties and Jurisdiction 2003 1. Plaintiff is a Virginia limited liability company formed under the laws of Virginia with its principal place of business located at 6132-C Brookshire Boulevard, Charlotte, North Carolina. The three individual members of the limited liability company.are citizens of North Carolina. Accordingly, Plaintiff is considered a citizen and resident of the Commonwealth of Virginia and North Carolina. 2. Plaintiff is also the assignee of any rights accruing to Tilson Creations, Inc., related to the issues in contention. Tilson Creations is a North Carolina corporation with its principal office in Chapel Hill, North Carolina. 3. Defendant Apex Homes, Inc. ("Apex") is a corporation incorporated under the laws of the Commonwealth of Pennsylvania and having its corporate office and principal place of business in Pennsylvania at 7172 Route 522, Middleburg, Pennsylvania, :17842. Accordingly, Apex is considered a citizen and resident of Pennsylvania. 4. Upon information and belief, Defendant Scott:D. Wray d/b/a Wray's Contracting is a citizen and resident of McClure, Pennsylvania. Timberlake is not aware that Wray's Contracting is incorporated, despite research, but has included the company as a separate entity in the event it is a corporation. Scott D. Wray and Wray's Contracting, whether incorporated or not, will be referred to collectively as "Wray's Contracting." 5_ For purposes of the allegations set forth herein, Apex contracted to provide goods and services in Virginia. Additionally, Apex is registered to do business in Virginia with the Virginia State Corporation Commission. 6. For purposes of the allegations set forth herein; Wray's Contracting came ' into Virginia, performed work, and transacted business under a contract in Virginia. 2 18720/111381665x1 07/27/07 12:51 FAX 540 983 9468 GENTRY LOCKE 1--? 2 004 7. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. The parties are of diverse citizenship and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. Furthermore, defendants' actions subject them to jurisdiction in Virginia under Virginia Code § 8.01-328.1- 8. Venue is proper in this district pursuant to 28 -U.S.C. § 1391 because the defendants are subject to personal jurisdiction in this district and transacted business in this district, and because a substantial part of the events giving rise to this claim occurred within this district. FACTS 9. Timberlake is the owner and developer of a residential townhome project (the "Project") located on property that Timberlake owns in Franklin County, Virginia. Work began on the Project in or about April, 2005.. 10. Prior to the creation of Timberlake, Tilson Creations communicated with Apex regarding the sale and installation of modular home units for the Project. 11. Apex, among other things, manufactures modular housing. As part of the construction of townhome units for the Project, Timberlake contracted with Apex to provide the modular units for the 24 townhome units comprising the Project. Separate and apart from the sale of the modular units, Timberlake also contracted with Apex to provide services to erect or "set" the modular units, and construct a roof over them, in order to form the 24 townhomes. The townhomes at the Project are divided into three separate buildings, two of which buildings have nine (9) townhomes and one of which has six (6) townhomes. The modular units comprise the main/first floor (one modular unit) and second floor (a second modular unit) of each townhome. 12. Upon information and belief, Apex subcontracted with Wray's Contracting to perform the work to "set" the modular units. Apex charged Timberlake for these services, and, upon payment by Timberlake, Apex paid Wray's Contracting' Apex represented to Timberlake that 3 18120/1/1381665x1 07/27/07 12:51 FAX. 540 983 9468 1 .......... r- 11005 Wray's contracting was experienced and performed good quality work in setting modular units like those for the Project- Timberlake Crossing was and is an intended third party beneficiary of the subcontract between Apex and Wray's Contracting. 13. Apex delivered or had delivered the modular units to the Project in Franklin County beginning in late July 2005. Thereafter, Wray's Contracting's workers began setting the units. 14. Wray, s Contracting was involved in setting all twelve of the modular units in the six townhomes in the building located at 232 Mountain Cove Drive, and all eighteen of the modular units in the nine townbomes in the building located at 230 Mountain Cove. Drive. In addition, Wray's Contracting set ten modular units in five townhomes in the building located at 231 Mountain Cove Drive. 15. During the time when Wray's Contracting was setting the approximately 40 modular units in 20 of the townhomes, Wray's Contracting failed 'to perform its work in a good and workmanlike manner. Instead, it performed its work in a negligent manner such that it allowed excessive amounts of water to enter the interior and wall cavities of the modular units before it placed the roofs on the units. 16. The water that entered into the units resulted in many of the components of the units becoming wet and saturated. The water caused damage to components of the units, including, but not limited to, wallboards, wood flooring, carpeting, ceilings, sheetrock, insulation, and framing. 17. When the, water damage was discovered, Timberlake approached Scott Wray on the building site and asked Wray's Contracting, both in its own capacity and/or as a representative and agent of Apex Homes, to fix the damage. However, to date, Wray's Contracting has not done anything to repair the damage it caused. Apex likewise has not paid for the repair or mold remediation at the townhomes. GENTRY LOCKE 4 181201111381665v1 .07/27/,)7 12:51 FAX 540 983 9468 GENTRY LOCKE 2006 18_ As a result of the moisture that entered the units, mold and mildew developed in certain locations, and conditions existed where it was likely to develop in other locations if not addressed immediately. 19. Timberlake promptly took actions to determine the extent of the damage caused by the moisture by, among other things, enlisting the services of ECS-Mid Atlantic, L.L.C., ("BCS") to study the nature and extent of the damage in each of the townhome units. 20. Timberlake also undertook, through itself, and other contractors, to perform work to address and remediate the resulting problems and damages- 21. Timberlake has expended at least $764,404 to investigate and remediate the problems and damages. 22. In addition, the presence of the moisture and the resulting damages resulted in a significant delay in Timberlake being able to sell the townh6mes; thus causing it to carry loans on the Project and to incur additional interest on its loans and an additional delay in recognizing the benefit from the sales. Timberlake's costs related to these delays are approximately $196,317 to date, and an additional $178,138.20 has been paid to date in interest and fees caused by the repairs and delay. Count 1: Breach of Contract 23. Plaintiff re-alleges and incorporates by reference herein all preceding paragrapbs_ 24. Plaintiff Timberlake contracted with Apex to provide installation of the modular units for the Project. 25. Apex contracted with Wray's Contracting to provide those installation services Timberlake was and is a direct and intended beneficiary of that contract 26. Wray's Contracting was obligated, and in turn Apex was obligated, to perform the installation work in a good and workmanlike manner. 5 191201111351665v1 -07/27/4)7 12:51 FAX 540 983 9468 GENTRY LOCKE Z007 27. Apex and Wray Is Conntracting each breached the agreement to install the units, and in particular the obligation to perform the work in a good and workmanlike manner. Instead, they installed the units improperly and negligently, causing the modular units to be infiltrated by water and resulting in the propagation of mold and other damages. 28. The breaches of contract by Apex and by Wray's Contracting have caused Timberlake to incur damages including, but not limited to, the cost of investigating the extent of the damage, the costs associated with repair of the damage and other remediation to make the units habitable, and other costs, as stated in Paragraphs 20 through 23 above. 29. These problems have also prevented Timberlake from closing on the sales of a number of these units, and resulted in the damages stated in Paragraph 23 above. WHEREFORE, Timberlake Crossir?g respectfully moves this Court for entry of a judgment against the defendants, jointly and severally, in an amount to be determined at trial, but not less than $1,138,859 as damages for injury and costs sustained by it, pre judgment interest, post judgment interest, and its costs expended in this matter. Count H: Breach of Warranty 30. Plaintiff re-alleges and incorporates by reference herein all preceding paragraphs. 31. As a part of the foregoing contracts set forth in wid addressed in Count 1, above, both Apex and Wray's Contracting impliedly warranted that they would perform work in a good and workmanlike manner. To the extent that Wray's Contracting provided such warranty to Apex, Timberlake is a third-party beneficiary of that warranty. 32. Neither Apex, nor its subcontractor, Wray's Contracting, performed in accordance with that warranty, and, therefore, breached the warranty. Instead, they installed the units improperly and negligently, causing the modular units to be infiltrated by water and resulting in the propagation of mold and other damages. 6 181201111381665vi .07/27/p7 12:52 FAI 540 983 9468 GENTRY LOCKE Z008 33. The breaches of warranty by Apex and by Wray's Contracting have caused Timberlake to incur damages, including but not limited to the cost of the modular units which must be repaired or replaced, the costs associated with repair and mold remediation to make the units habitable, and other costs, a5 stated in Paragraphs 20 through 23 above. 34. These problems have also prevented Timberlake from closing on the sales of a number of these units, and resulting in the damages in Paragr4ph 23 above. WHEREFORE, Timberlake Crossing respectfully moves this Court for entry of a judgment against the defendants, jointly and severally, in an amount to be determined at trial, but not less than $1,138,859 as damages for injury and costs sustained by it, pre judgment interest, post judgment interest, and its costs expended in this matter. JURY DEMAND The plaintiff, by counsel, demands a trial by jury. TIMBERL.AKE CROSSING, L.L.C. By: Is/ Kathleen L. Wri allt. Of Counsel K. Brett Marston, Esq. (VSB No. 35900) Kathleen L. Wright, Esq. (VSB No. 48942) GENTRY LOCKS RAKES & MOORE, LLP P.O. Box 40013 Roanoke, Virginia 24022-0013 Telephone: (540) 983-9300 Facsimile: (540) 983-9400 Counsel for Plaintiff 7 18120(111381665v 1 Exk,,?j B S31d3S o0ox Avi PENN NATIONAL m INSURANCE Pennsylvania National Mutual Casualty Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 ! Certify hat this is a true copy of what was mailed. 8igi?- Date THIS POLICY JACKET WITH THE INFORMATION PAGE, POLICY, FORMS AND ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETES THIS POLICY. MUTUAL POLICY CONDITIONS THIS POLICY IS NON-ASSESSABLE. THE POLICYHOLDER IS A MEMBER OF THE COMPANY AND SHALL PARTICIPATE TO THE EXTENT AND UPON THE CONDITIONS FIXED AND DETERMINED BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH THE PROVISIONS OF LAW, IN THE DISTRIBUTION OF DIVIDENDS SO FIXED AND DETERMINED. ANNUAL MEETING THE INSURED IS HEREBY NOTIFIED THAT BY VIRTUE OF THIS POLICY, HE IS A MEMBER OF THE PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY AND IS ENTITLED TO VOTE EITHER IN PERSON OR BY PROXY AT ANY AND ALL MEETINGS OF SAID COMPANY. THE ANNUAL MEETINGS OF THE COMPANY ARE HELD AT ITS HOME OFFICE IN THE CITY OF HARRISBURG, PA. ON THE SECOND MONDAY OF APRIL IN EACH YEAR, AT 10:00 O'CLOCKA.M.,AND THE INCLUSION OF THIS NOTICE IN THIS POLICY SHALL CONSTITUTE NOTICE TO THE MEMBER OF THE ANNUAL MEETING. IN WITNESS WHEREOF, The company has caused this policy to be signed by its president and secretary but this policy shall not be valid unless completed by the attachment hereto of a Declaration Page, Policy or Coverage Part(s) and Endorsements, if any, and countersigned on the aforesaid declarations page by a duly authorized representative of the company. VIRGINIA EXCEPTION Lack of countersignature does not invalidate the policy. ??? Secretary ??'? 0. '41- President PENN NATIONAL ® INSURANCE Penmyl-ia N6orel MiAwl Casualty imwar Comparq Penn Neliorel Socurily Irswr Company P.O. Box 2361 • Hardebug, PA 17105 COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS OCCURRENCE POLICY RENEWAL OF GI-9 0103079 NON-ASSESSABLE THIS POLICY IS SUBJECT TO A GENERAL AGGREGATE LIMIT POLICY NUMBER FROM POLICY PERIOD T COVERAGE IS PROVIDED IN AGENCY BR GI-9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000+ 6' NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE 191 SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 POLICY PERIOD: POLICY COVERS FROM: 12:01 A.M. STANDARD TIME AT THE ADDRESS OF THE INSURED STATED ABOVE. FORM OF BUSINESS: CORPORATION BUSINESS DESCRIPTION: MODULAR HOME MANUFACTURER IN RETURN FOR PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. LIMITS OF INSURANCE General Aggregate Limit (Other than products - completed operations) $ 2,000,000 Products - Completed Operations Aggregate Limit $ 2,000,000 Personal and Advertising Injury Limit - Any one person or organization $ 1 1000,000 Each Occurrence Limit $ 1 , 000, 000 Damage to Premises Rented to you Limit - Any one premises $ 100 , 000 Medical Expense Limit - Any one person $ 5,000 PREMIUM INFORMATION RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS SEE SUPPLEMENTAL DECLARATIONS, FORM 71-0029S t=? - L TC?q - ?ldl FOR+?F41&i r rt.* ERMA INSTALLMENT SERVICE FEE $44.00 * INCLUDES NJ PROP./LIAB. INS. GUARANTY ASSOC. SURCHARGE $33.00 FORMS APPLICABLE TO THIS COVERAGE PART: SEE ATTACHED FORMS SCHEDULE, FORM 71-1084 COMPANY USE ONLY RISK TYPE RISK CLASS iMC SIC CODE InsuMn UNO. TEAM 5 2 99 N 007 COUNTERSIGNED BY: Authorized Representative THESE DECLARATIONS TOGETHER WITH THE COMMON POLICY CONDITIONS, COVERAGE PART COVERAGE FORM(S), AND FORMS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETE THE ABOVE NUMBERED POLICY. 71 0029 0500 BRANCH ISSUED 01/24/05 a ? COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 ? 015 PREMISES NO. 1 415 W MARKET ST MIDDLEBUR G SNYDER CO PA 17842 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 61226 2,600 SQUARE FEET 1000 VARIOUS INCLUDED PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 2 : 2 MI W OF KREAMER MIDDLEBURG SNYDER CO PA 17842 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 1 MDL.HOME(S) EACH VARIOUS INCLUDED MODEL HOMES PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 57146 30,000,000 GROSS SALES 1000 VARIOUS VARIOUS INCLUDED INCLUDED MODULAR UNITS MFG. PREMISES NO. 3 : 550 RT 15 SPARTA SUSSEX CODE PREMIUM BASIS PER 46362 1 MDL.HOME(S) EACH PRODUCTS-COMPLETED OPER CO NJ 07871 RATES ADVANCE PREMIUM PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS VARIOUS INCLUDED ATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 4 : 1 BRIDGE ST SELINSGROVE SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 3 MDL.HOME(S) EACH VARIOUS INCLUDED MODEL HOMES PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT FORM 71-0029S (ED. 03/91) PAGE 1 CONTINUED BRANCH ISSUED 01/24/05 COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 PREMISES NO. 5 : 4212 HWY 74 W MONROE UNION CO NC 28110 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 1 MDL.HOME(S) EACH VARIOUS INCLUDED PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 6 : RR 2 MT PLEASANT MILLS SNYDER CO PA 17843 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 7 : LOT 22 WEDGEWOOD DR SELINSGROVE SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 8 : 65-67 WALNUT ST MIDDLEBURG SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT FORM 71-0029S (ED. 03/91) PAGE 2 CONTINUED BRANCH ISSUED 01/24/05 COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 PREMISES NO. 9 : LOT 32 N 4TH ST MIFFLINBURG UNION CO PA 17844 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT ADDITIONAL INTERESTS FORM 71-00295 (ED. 03/91) PAGE 3 LAST BRANCH ISSUED 01/24/05 POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 FORMS SCHEDULE GENERAL LIABILITY FORMS: 710477 05/93 710576 01/05 IL0017 11/98 IL0246 07/02 IL0910 07/02 IL0021 07/02 IL0208 07102 IL0269 07/02 711106 01/05 710619 03/01 C62150 09/89 710543 05/00 710546 01/94 CG2147 07/98 CG2161 04/98 CG2151 09/89 CG2149 09199 710897 05/01 000001 10/01 710680 07/02 710188 01/03 710988 07/02 711043 01/03 CG2167 04/02 710948 01/03 CG2620 10/93 710189 01/03 711061 02/03 CG2170 11/02 000062 12/02 CG2176 11/02 C62026 11/85 711148 01/05 CG2187 05/04 711153 01/05 FORM 71-1084 (ED. 04/03) BRANCH ISSUED 01/24/05 POLICY SCHEDULE OF NAMES AND ADDRESSES POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01 /01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES APEX HOMES INC AND/OR CONTINUED NAMED INSURED PARAMOUNT HOMES OF PA AND/OR PARAMOUNT HOMES OF NJ AND/OR PINE VIEW REALTY PREMISES NO.: 1 MIFFLINBURG BANK & TRUST DESIGNATED PERSON/ORGANIZATION 250 E CHESTNUT ST MIFFLINBURG PA 17844 SEE CG2026 FORM 71-0026 (ED. 03/91) BRANCH ISSUED 01/24/05 PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 IMPORTANT NOTICE Enclosed is your renewal declarations. Please note that all endorsements listed on the renewal declarations will remain in effect during this policy term. We have attached only new or revised endorsements. For copies of any endorsement that is not attached, refer to your original policy. Thank you for placing your coverage with Penn National Insurance. To file a claim, contact your agent or call (800) 766-2245. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 ATTACHED IS FORM 71 1061 0203 NOTICE - DISCLOSURE OF TERRORISM INSURANCE COVERAGE PREMIUM PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT IS ATTACHED TO AND MADE PART OF YOUR POLICY IN RESPONSE TO THE DISCLOSURE REQUIREMENTS OF THE TERRORISM RISK INSURANCE ACT OF 2002. THIS ENDORSEMENT DOES NOT GRANT ANY COVERAGE OR CHANGE THE TERMS AND CONDITIONS OF ANY COVERAGE UNDER THE POLICY. NOTICE - DISCLOSURE OF TERRORISM INSURANCE COVERAGE PREMIUM The Terrorism Risk Insurance Act of 2002 establishes a program within the Department of the Treasury under which the federal government shares with the insurance industry the risk of loss from future terrorist attacks. The Act applies when the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States, certifies that an event meets the definition of an act of terrorism. The Act provides that, to be certified, an act of terrorism must cause losses of at least five million dollars and must have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest to coerce the government or population of the United States. In accordance with the federal Terrorism Risk Insurance Act of 2002 we are required to offer you coverage for losses resulting from certified acts of terrorism. The policy's other provisions will still apply to any such act. DISCLOSURE OF PREMIUM The portion of your annual premium that is attributable to coverage for acts of terrorism is $ 0.00. SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE Under Federal Law, you have thirty (30) days to consider this offer of coverage for terrorist acts. You may choose to reject the offer by signing the enclosed statement and returning it to us and your policy will be written to exclude the described coverage to the extent permissible by statute in your state. Commercial Umbrella Policies Only If you choose to accept this offer of coverage for certified acts of terrorism, coverage provided under your Commercial Umbrella Policy will be excess over any underlying policy limits regardless of whether you have accepted or rejected coverage on those policies for certified acts of terrorism. DISCLOSURE OF FEDERAL PARTICIPATION IN PAYMENT OF TERRORISM LOSSES Effective November 26, 2002, under your existing coverage, any losses caused by certified acts of terrorism would be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States Government, Department of the Treasury pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 REJECTION OF TERRORISM INSURANCE COVERAGE I hereby reject the offer of terrorism coverage. I understand that an exclusion of certain terrorism losses will be made part of this Coverage Part/Policy. Policyholder Signature Date Print Name Policy Number INTERLINE IL 00171198 COMMON POLICY CONDITIONS All Coverage Parts included in this policy are subject to the following conditions. A. Cancellation 1. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation. 2. We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least: a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or b. 30 days before the effective date of cancellation if we cancel for any other reason. 3. We will mail or deliver our notice to the first Named Insured's last mailing address known to us. 4. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. 5. If this policy is cancelled, we will send the first Named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first Named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. 6. If notice is mailed, proof of mailing will be sufficient proof of notice. B. Changes This policy contains all the agreements between you and us concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent. This policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy. C. Examination Of Your Books And Records We may examine and audit your books and records as they relate to this policy at any time during the policy period and up to three years afterward. D. Inspections And Surveys 1. We have the right to: a. Make inspections and surveys at any time; b. Give you reports on the conditions we find; and c. Recommend changes. 2. We are not obligated to make any inspections, surveys, reports or recommendations and any such actions we do undertake relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. And we do not warrant that conditions: a. Are safe or healthful; or b. Comply with laws, regulations, codes or standards. 3. Paragraphs 1. and 2. of this condition apply not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. 4. Paragraph 2. of this condition does not apply to any inspections, surveys, reports or recommendations we may make relative to certification, under state or municipal statues, ordinances or regulations, of boilers, pressure vessels or elevators. E. Premiums The first Named Insured shown in the Declarations: 1. Is responsible for the payment of all premiums; and 2. Will be the payee for any return premiums we pay. F. Transfer Of Your Rights And Duties Under This Policy Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured. If you die, your rights and duties will be transferred to your legal representative but only while acting within the scope of duties as your legal representative. Until your legal representative is appointed, anyone having proper temporary custody of your property will have your rights and duties but only with respect to that property. INTERLINE IL 02 46 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. PENNSYLVANIA CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART A. The Cancellation Common Policy Condition is replaced by the following: CANCELLATION 1. The first Named Insured shown in the Declarations may cancel this policy by writing or giving notice of cancellation. 2. Cancellation Of Policies In Effect For Less Than 60 Days We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least 30 days before the effective date of cancellation. 3. Cancellation Of Policies In Effect For 60 Days Or More If this policy has been in effect for 60 days or more or if this policy is a renewal of a policy we issued, we may cancel this policy only for one or more of the following reasons: a. You have made a material misrepresentation which affects the insurability of the risk. Notice of cancellation will be mailed or delivered at least 15 days before the effective date of cancellation. b. You have failed to pay a premium when due, whether the premium is payable directly to us or our agents or indirectly under a premium finance plan or extension of credit. Notice of cancellation will be mailed at least 15 days before the effective date of cancellation. c. A condition, factor or loss experience material to insurability has changed substantially or a substantial condition, factor or loss experience material to insurability has become known during the policy period. Notice of cancellation will be mailed or delivered at least 60 days before the effective date of cancellation. d. Loss of reinsurance or a substantial decrease in reinsurance has occurred, which loss or decrease, at the time of cancellation, shall be certified to the Insurance Commissioner as directly affecting in-force policies. Notice of cancellation will be mailed or delivered at least 60 days before the effective date of cancellation. e. Material failure to comply with policy terms, conditions or contractual duties. Notice of cancellation will be mailed or delivered at least 60 days before the effective date of cancellation. f. Other reasons that the Insurance Commissioner may approve. Notice of cancellation will be mailed or delivered at least 60 days before the effective 13 date of cancellation. This policy may also be cancelled from inception upon discovery that the policy was obtained through fraudulent statements, omissions or concealment of facts material to the acceptance of the risk or to the hazard assumed by us. 4. We will mail or deliver our notice to the first Named Insured's last mailing address known to us. Notice of cancellation will state the specific reasons for cancellation. 5. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. 6. If this policy is cancelled, we will send the first Named Insured any premium refund due. If we cancel, the refund will be pro rata and will be returned within 10 business days after the effective date of cancellation. If the first Named Insured cancels, the refund may be less than pro rata and will be returned within 30 days after the effective date of cancellation. The cancellation will be effective even if we have not made or offered a refund. 7. If notice is mailed, it will be by registered or first class mail. Proof of mailing will be sufficient proof of notice. The following are added and supersede any provisions to the contrary: 1. Nonrenewal If we decide not to renew this policy, we will mail or deliver written notice of nonrenewal, stating the specific reasons for nonrenewal, to the first Named Insured at least 60 days before the expiration date of the policy. 2. Increase Of Premium If we increase your renewal premium, we will mail or deliver to the first Named Insured written notice of our intent to increase the premium at least 30 days before the effective date of the premium increase. Any notice of nonrenewal or renewal premium increase will be mailed or delivered to the first Named Insured's last known address. If notice is mailed, it will be by registered or first class mail. Proof of mailing will be sufficient proof of notice. IL 09 10 0702 PENNSYLVANIA NOTICE An Insurance Company, its agents, employees, or service contractors acting on its behalf, may provide services to reduce the likelihood of injury, death or loss. These services may include any of the following or related services incident to the application for, issuance, renewal or continuation of, a policy of insurance: 1. Surveys; 2. Consultation or advice; or 3. Inspections. The "Insurance Consultation Services Exemption Act" of Pennsylvania provides that the Insurance Company, its agents, employees or service contractors acting on its behalf, is not liable for damages from injury, death or loss occurring as a result of any act or omission by any person in the furnishing of or the failure to furnish these services. The Act does not apply: 1. If the injury, death or loss occurred during the actual performance of the services and was caused by the negligence of the Insurance Company, its agents, employees or service contractors; 2. To consultation services required to be performed under a written service contract not related to a policy of insurance; or 3. If any acts or omissions of the Insurance Company, its agents, employees or service contractors are judicially determined to constitute a crime, actual malice, or gross negligence. Instruction to Policy Writers Attach the Pennsylvania Notice to all new and renewal certificates insuring risks located in Pennsylvania. INTERLINE IL 00 21 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT (Broad Form) This endorsement modifies insurance provided under the following: COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART FARM COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY 1. The insurance does not apply: B. Under any Medical Payments coverage, to Under any Liability Coverage, to "bodily A expenses incurred with respect to "bodily " " . " hazardous resulting from the injury injury or property damage properties" of "nuclear material" and arising (1) With respect to which an "insured" out of the operation of a "nuclear facility" by under the policy is also an insured any person or organization. under a nuclear energy liability policy C. Under any Liability Coverage, to "bodily issued by Nuclear Energy Liability injury" or "property damage" resulting Insurance Association, Mutual Atomic from hazardous properties of „nuclear Energy Liability Underwriters, Nuclear material", if: Insurance Association of Canada or any of their successors, or would be (1) The "nuclear material" (a) is at any an insured under any such policy but "nuclear facility" owned by, or operated for its termination upon exhaustion of by or on behalf of, an "insured" or (b) has its limit of liability; or been discharged or dispersed therefrom; (2) Resulting from the "hazardous (2) The "nuclear material" is contained in properties" of "nuclear material" and "spent fuel" or "waste" at any time with respect to which (a) any person possessed, handled, used, processed, or organization is required to maintain stored, transported or disposed of, by or financial protection pursuant to the on behalf of an "insured"; or Atomic Energy Act of 1954, or any (3) The "bodily injury" or "property damage" law amendatory thereof, or (b) the arises out of the furnishing by an "insured" is, or had this policy not "insured" of services, materials, parts or been issued would be, entitled to equipment in connection with the indemnity from the United States of planning, construction, maintenance, America, or any agency thereof, operation or use of any "nuclear facility", under any agreement entered into by but if such facility is located within the the United States of America, or any United States of America, its territories or agency thereof, with any person or possessions or Canada, this exclusion (3) organization. applies only to "property damage" to such "nuclear facility" and any property thereat. 2. As used in this endorsement: "Hazardous properties" includes radioactive, toxic or explosive properties. "Nuclear material" means "source material", "Special nuclear material" or "by-product material". "Source material", "special nuclear material" and "by-product material" have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof. "Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor". "Waste" means any waste material (a) containing "by-product material" other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its "source material" content, and (b) resulting from the operation by any person or organization of any "nuclear facility" included under the first two paragraphs of the definition of "nuclear facility". "Nuclear facility" means: (a) Any "nuclear reactor"; (b) Any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing "spent fuel", or (3) handling, processing or packaging "waste"; (c) Any equipment or device used for the processing, fabricating or alloying of "special nuclear material" if at any time the total amount of such material in the custody of the "insured" at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235; (d) Any structure, basin, excavation, premises or place prepared or used for the storage or disposal of "waste"; and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations. "Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of fissionable material. "Property damage" includes all forms of radioactive contamination of property. INTERLINE IL 02 08 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART A. Pursuant to New Jersey law, this policy cannot be cancelled or nonrenewed for any underwriting reason or guideline which is arbitrary, capricious or unfairly discriminatory or without adequate prior notice to the insured. The underwriting reasons or guidelines that an insurer can use to cancel or nonrenew this policy are maintained by the insurer in writing and will be furnished to the insured and/or the insured's lawful representative upon written request. This provision shall not apply to any policy which has been in effect for less than 60 days at the time notice of cancellation is mailed or delivered, unless the policy is a renewal policy. B. Paragraph 2 . of the Cancellation Common Policy Condition is replaced by the following: 2. If this policy has been in effect for less than 60 days, we may cancel this policy for any reason subject to the following: a. We may cancel this policy by mailing or delivering to the first Named Insured and any person entitled to notice under this policy written notice, of cancellation, at least: (1) 10 days before the effective date of cancellation if we cancel for: (a) Nonpayment of premium; or (b) Existence of a moral hazard, as defined in N.J.A.C. 11:1-20.2(f) as follows: (i) "The risk, danger or probability that the insured will destroy, or permit to be destroyed, the insured property for the purpose of collecting the insurance proceeds. Any change in the circumstances of an insured that will increase the probability of such a destruction may be considered a 'moral hazard'; and (ii) "The substantial risk, danger or probability that the character, circumstances or personal habits of the insured may increase the possibility of loss or liability for which an insurer will be held responsible. Any change in the character or circumstances of an individual, corporate, partnership or other insured that will increase the probability of such a loss or liability may be considered a 'moral hazard"'. C f (2) 30 days before the effective date of cancellation if we cancel for any other reason. b. In the notice of cancellation which is sent to the first Named Insured, we will state the reason for cancellation. The following is added to the Cancellation Common Policy Condition: 7. Cancellation Of Policies In Effect For 60 Days or More a. If this policy has been in effect for 60 days or more, or is a renewal of a policy we issued, we may cancel this policy only for one or more of the following reasons: (1) Nonpayment of premium; (2) Existence of a moral hazard, as defined in N.J.A.C. 11:1-20.2(f); (3) Material misrepresentation or nondisclosure to us of a material fact at the time of acceptance of the risk; (4) Increased hazard or material change in the risk assumed which we could not have reasonably contemplated at the time of assumption of the risk; (5) Substantial breaches of contractual duties, conditions or warranties that materially affect the nature and/or insurability of the risk; (6) Lack of cooperation from the insured on loss control matters materially affecting the insurability of the risk; (7) Fraudulent acts against us by the insured or its representative that materially affect the nature of the risk insured; (8) Loss of or reduction in available insurance capacity; (9) Material increase in exposure arising out of changes in statutory or case law subsequent to the issuance of the insurance contract or any subsequent renewal; (10) Loss of or substantial changes in applicable reinsurance; (11) Failure by the insured to comply with any Federal, State or local fire, health, safety or building or construction regulation, law or ordinance with respect to an insured risk which substantially increases any hazard insured against within 60 days of written notification of a violation of any e1 Ink la%ni rani ilatinn nr nrriinanca: (12) Failure by the insured to provide reasonable and necessary underwriting information to us upon written request therefor and a reasonable opportunity to respond; (13) Agency termination, provided: (a) We document that replacement coverage at comparable rates and terms has been provided to the first Named Insured, and we have informed the first Named Insured, in writing, of the right to continue coverage with us; or (b) We have informed the first Named Insured, in writing, of the right to continue coverage with us and the first Named Insured has agreed, in writing, to the cancellation or nonrenewal based on the termination of the first Named Insured's appointed agent. (14) Any other reasons in accordance with our underwriting guidelines for cancellation of commercial lines coverage. b. If we cancel this policy based on Paragraphs 7.a.(1) or (2) above, we will mail or deliver a written notice, to the first Named Insured and any person entitled to notice under this policy, at least 10 days before the effective date of cancellation. If we cancel this policy for any other reason listed above, we will mail or deliver a written notice to the first Named Insured and any person entitled to notice under this policy, not more than 120 days nor less than 30 days before the effective date of such cancellation. c. In the notice of cancellation which is sent to the first Named Insured, we will state the reason for cancellation. For cancellation due to the nonpayment of premium, the notice will state the effect of nonpayment by the due date. Cancellation for nonpayment of premium will not be effective if payment of the amount due is made before the effective date set forth in the notice. d. Notice will be sent to the last mailing addresses known to us, by: (1) Certified mail; or (2) First class mail, if we have obtained from the post office a date stamped proof of mailing showing names and addresses. D e e. We need not send notice of cancellation if you have: (1) Replaced coverage elsewhere; or (2) Specifically requested termination. The following is added and supersedes any other provision to the contrary: NONRENEWAL 1. We may elect not to renew this policy for any reason permitted to cancel it. If we elect not to renew this policy, we will mail a notice of nonrenewal, stating the reasons for nonrenewal, to the first Named Insured at least 30 days but not more than 120 days before the expiration date of this policy. If this policy does not have a fixed expiration date, it shall be deemed to expire annually on the anniversary of its inception. 2. This notice will be sent to the first Named Insured at the last mailing address known to us by: a. Certified mail; or b. First class mail, if we have obtained from the post office a date stamped proof of mailing showing the first Named Insured's name and address. 3. We need not mail or deliver this notice if you have: a. Replaced coverage elsewhere; or b. Specifically requested termination. INTERLINE IL 02 69 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NORTH CAROLINA CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART A. Paragraph 2. of the Cancellation Common Policy Condition is replaced by the following: 2. Cancellation Requirements a. Policies In Effect Less Than 60 Days If this policy has been in effect for less than 60 days, we may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least: (1) 15 days before the effective date of cancellation if we cancel for nonpayment of premium; or (2) 30 days before the effective date of cancellation if we cancel for any other reason. b. Policies In Effect More Than 60 Days If this policy has been in effect for 60 days or more, or is a renewal of a policy we issued, we may cancel this policy prior to the: (1) Expiration of the policy term; or (2) Anniversary date, stated in the policy only for one or more of the following reasons: (a) Nonpayment of premium; (b) An act or omission by the insured or his or her representative that constitutes material misrepresentation or nondisclosure of a material fact in obtaining this policy, continuing this policy or presenting a claim under this policy; (c) Increased hazard or material change in the risk assumed that could not have been reasonably contemplated by the parties at the time of assumption of the risk; (d) Substantial breach of contractual duties, conditions or warranties that materially affects the insurability of the risk; (e) A fraudulent act against us by the insured or his or her representative that materially affects the insurability of the risk; (f) Willful failure by the insured or his or her representative to institute reasonable loss control measures that materially affect the insurability of the risk after written notice by us; } (g) Loss of facultative reinsurance, or loss of or substantial changes in applicable reinsurance as provided in G.S. 58-41-30; (h) Conviction of the insured of a crime arising out of acts that materially affect the insurability of the risk; (i) A determination by the Commissioner of Insurance that the continuation of the policy would place us in violation of the laws of North Carolina; or (j) You fail to meet the requirements contained in our corporate charter, articles of incorporation or by-laws when we are a company organized for the sole purpose of providing members of an organization with insurance coverage in North Carolina. We will mail or deliver written notice of cancellation to the first Named Insured at least: (i) 15 days before the effective date of cancellation if we cancel for nonpayment of premium; or (ii) 30 days before the effective date of cancellation if we cancel for any other reason. c. Cancellation for nonpayment of premium will not become effective if you pay the premium amount due before the effective date of cancellation. d. We may also cancel this policy for any reason not stated above provided we obtain your prior written consent. B. The following provisions are added and supersede any other provisions to the contrary: 1. Nonrenewal a. If we elect not to renew this policy, we will mail or deliver to the first Named Insured shown in the Declarations written notice of nonrenewal at least 45 days prior to the: (1) Expiration of the policy if this policy has been written for one year or less; or (2) Anniversary date of the policy if this policy has been written for more than one year or for an indefinite term. b. We need not mail or deliver the notice of nonrenewal if you have: (1) Insured property covered under this policy, under any other insurance policy; (2) Accepted replacement coverage; or (3) Requested or agreed to nonrenewal of this policy. c. If notice is mailed, proof of mailing will be sufficient proof of notice. 2. The written notice of cancellation or nonrenewal will: a. Be mailed or delivered to the first Named Insured and any designated mortgagee or loss payee at their addresses shown in the policy, or if not indicated in the policy, at their last known addresses; and b. State the reason or reasons for cancellation or nonrenewal. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171052361 EMPLOYEE BENEFITS LIABILITY ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM BUSINESSOWNERS LIABILITY COVERAGE FORM GARAGE COVERAGE FORM SCHEDULE Limits of Insurance Deductible Each Claim Limit $ 11000,000 Aggregate Limit $ 3,000,000 $ 1, 0 0 0 No. of Employees Rate per No. of Advance Minimum Premium Class Code Employees Premium 250 INCL $ INCL $ INCL 96102 (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) INSURING AGREEMENT We will pay under this endorsement those sums that the insured becomes legally obligated to pay as damages because of a claim or "suit" brought by any employee, former employee, or their beneficiaries or legal representatives in connection with any negligent act, error or omission that arises from the "administration" of your "employee benefits" programs. We will have the right and duty to defend any "suit" seeking those damages. But: The amount we will pay for damages is limited as described in the Schedule as Limits of Insurance; We may investigate and settle any claim or "suit" at our discretion; and Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under this endorsement. This insurance applies to acts, errors or omissions which first occur while this endorsement is in effect. WHO IS AN INSURED With respect to this endorsement, the WHO IS AN INSURED section is modified to include employees only while authorized to act in the administration of your "employee benefits" programs. EXCLUSIONS Insurance under this endorsement does not apply to any claim or "suit" arising out of: a. any dishonest, fraudulent, criminal or malicious act; b. any "Bodily Injury", "Property Damage", "Advertising Injury" or "Personal Injury"; c. any claim for failure of performance of contract by any insured; d. any obligation of the insured under a workers' compensation, Social Security or disability benefits, or unemployment compensation or similar law; e. any failure of stock to perform as represented by you; f. any advice given by you to your employees to participate or not to participate in stock subscription plans; g. any claim resulting from the termination of any "employee benefit plan"; or h. any actual or alleged error or omission or breach of duty, committed or alleged to have been committed by a trustee or administrator, in the discharge of fiduciary duties, obligations or responsibilities imposed by the Federal Employee Retirement Income Security Act of 1974 or Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272) or Section 9319 of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509) or any amendments to these Acts. i. any claim or "suit" arising directly or indirectly out of; (1) any actual or alleged failure, malfunction or inadequacy of: a. Any of the following, whether belonging to any insured or to others: (a) Computer hardware, including micro-processors; (b) Computer application software; (c) Computer operating systems and related software; (d) Computer networks; (e) Microprocessors (computer chips) not part of any computer system; or (f) Any other computerized or electronic equipment or components; or (2) Any other products, and any services, data or functions that directly or indirectly use or rely upon, in any manner, any of the items listed in Paragraph La. (1) of this endorsement due to the inability to correctly recognize, process, distinguish, interpret or accept the year 2000 and beyond. b. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement or supervision provided or done by you or for you to determine, rectify or test for, any potential or actual problems described in Paragraph i.a. of this endorsement. LIMITS OF INSURANCE The Limits of Insurance shown in the Schedule of this endorsement and the rules below fix the most we will pay regardless of the number of Insureds, claims made or "suits" brought, or persons or organizations making claims or bringing "suits". The Each Claim Limit is the most we will pay for damages arising out of any one claim or "suit". The Aggregate Limit is the most we will pay for the sum of all damages under this endorsement. The Limits of Insurance apply separately to each consecutive annual period and to any remaining period of less than 12 Months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an addition period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for the purposes of determining the Limits of Insurance. DEDUCTIBLE In the event of a claim, the deductible shown in the schedule of this endorsement shall be subtracted from the total amount resulting from each claim. We will pay covered claims over the amount of the deductible, up to the limit of liability. To settle a claim or "suit", we may pay all or part of the deductible. If we do, then you agree to repay us as soon as we notify you of the settlement. ADDITIONAL DEFINITION The following additional definition is added to the DEFINITIONS section: a. "Employee benefits" means group life insurance, group accident or health insurance, profit sharing plans, pension plans, employee stock subscription plans, employee travel, vacation, or savings plans, workers' compensation, unemployment insurance, Social Security and disability benefits insurance, and other similar benefit program. b. "Administration" - the unqualified word "administration" whenever used, shall mean: (1) Giving counsel to employees with respect to employee benefit programs; (2) Interpreting employee benefit programs;) (3) Handling of records in connection with employee benefit programs; (4) Effecting enrollment of employees under employee benefit programs, provided all such acts are authorized by the named insured. COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. AMENDMENT OF LIQUOR LIABILITY EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Exclusion c. of COVERAGE A (Section 1) is replaced by the following: c. "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you: (1) Manufacture, sell or distribute alcoholic beverages; (2) Serve or furnish alcoholic beverages for a charge whether or not such activity: (a) Requires a license; (b) Is for the purpose of financial gain or livelihood; or (3) Serve or furnish alcoholic beverages without a charge, if a license is required for such activity. CG 21 50 09 89 Copyright, Insurance Services Office, Inc., 1988 ? PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING: COMMERCIAL GENERAL LIABILITY COVERAGE FORM. COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY COVERAGE B. PERSONAL AND ADVERTISING INJURY LIABILITY COVERAGE C. MEDICAL PAYMENTS EXCLUSION - LEAD CONTAMINATION This insurance does not apply to: 1. "Bodily Injury", "medical payments", "property damage", or "personal and advertising injury" which would not have ocurred in whole or part but for the actual, alleged, or threatened ingestion, inhalation, absorption, dispersal, disposal, seepage, migration, release, or escape of lead in any form at any time. 2. Any loss, cost, or expense arising out of any: a. request, demand, or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize, or in any way respond to or assess the effects of lead; or b. claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing, or in any way responding to, or assessing the effects of lead. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO INSURED - PLEASE READ YOUR POLICY CAREFULLY Your policy contains an exclusion for lead contamination in any form at any time. Refer to endorsement 71-0543, Exclusion - Lead Contamination. COMMERCIAL GENERAL LIABILITY CG 21 47 07 98 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EMPLOYMENT - RELATED PRACTICES EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. The following exclusion is added to Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability: This insurance does not apply to: "Bodily injury" to: (1) A person arising out of any: (a) Refusal to employ that person; B. The following exclusion is added to Paragraph 2., Exclusions of Section I - Coverage B - Personal And Advertising Injury Liability: This insurance does not apply to: "Personal and advertising injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" to that person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "personal and advertising injury" to that person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. COMMERCIAL GENERAL LIABILITY CG 21 61 04 98 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION - YEAR 2000 COMPUTER-RELATED AND OTHER ELECTRONIC PROBLEMS - PRODUCTS/COMPLETED OPERATIONS This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART The following exclusion is added to Paragraph 2., (e) Microprocessors (computer chips) Exclusions of Section I - Bodily Injury And not part of any computer system; or Property Damage Liability: (f) Any other computerized or electronic 2. Exclusions equipment or components; or This insurance does not apply to "bodily injury" or "property damage" included in the "products-completed operations hazard" definition and arising directly or indirectly out of: a. Any actual or alleged failure, malfunction or inadequacy of: (1) Any of the following, whether belonging to any insured or to others: (a) Computer hardware, including microprocessors; (b) Computer application software; (c) Computer operating systems and related software; (d) Computer networks; (2) Any other products, and any services, data or functions that directly or indirectly use or rely upon, in any manner, any of the items listed in Paragraph 2.a.(1) of this endorsement due to the inability to correctly recognize, process, distinguish, interpret or accept the year 2000 and beyond. b. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement or supervision provided or done by you or for you to determine, rectify or test for, any potential or actual problems described in Paragraph 2.a. of this endorsement. COMMERCIAL GENERAL LIABILITY CG 21 51 09 89 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. AMENDMENT OF LIQUOR LIABILITY EXCLUSION - EXCEPTION FOR SCHEDULED ACTIVITIES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Description of Activity(ies): NONE (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) Exclusion c. of COVERAGE A (Section 1) is This exclusion applies only if you: replaced by the following: (1) Manufacture, sell or distribute alcoholic c. "Bodily injury" or "property damage" for beverages; which any insured may be held liable by (2) Serve or furnish alcoholic beverages for a reason of: charge whether or not such activity: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. (a) Requires a license; Ib) Is for the purpose of financial gain or livelihood; or (3) Serve or furnish alcoholic beverages without a charge, if a license is required for such activity. However, this exclusion does not apply to "bodily injury" or "property damage" arising out of the selling, serving or furnishing of alcoholic beverages at the specific activity(ies) described above. COMMERCIAL GENERAL LIABILITY CG 21 49 09 99 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. TOTAL POLLUTION EXCLUSION ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Exclusion f. under Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability is replaced by the following: This insurance does not apply to: f. Pollution (1) "Bodily injury" or "property damage" which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time. (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants"; or (b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES COVERAGE AND EXCLUSION LIABILITY FOR HAZARDS OF LEAD This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. For premises constructed in or after 1978 or premises constructed prior to 1978 which have been certified, prior to the policy period, as being free of existing lead hazards pursuant to standards established by the Department of Community Affairs, the following is added to exclusion f., Pollution, of paragraph 2., Exclusions, under Section I - Coverage A - Bodily Injury and Property Damage Liability and to any amendment to the pollution exclusion which is added by endorsement to this policy: 2. Exclusions f. Pollution This exclusion does not apply to "bodily injury" arising out of lead contamination, or out of the inhalation, ingestion, use, handling or contact with lead paint at or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to any insured. This provision will also apply to any premises which receives such certification during the policy period, but only if you notify us of such certification within 30 days after the certification is received, and only for "bodily injury" which occurs after such certification. B. For premises constructed prior to 1978 and which have not been certified as being free of existing lead hazards pursuant to standards established by the Department of Community Affairs, and until certified thereafter as described in Paragraph A., the following is added to Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability: This insurance does not apply to: "Bodily injury caused in whole or in part, either directly or indirectly, by lead paint or lead contamination, or arising out of or incidental to the inhalation, ingestion, use, handling, or contact with lead paint or lead contamination. COMMERCIAL GENERAL LIABILITY CG 00 01 1001 COMMERCIAL GENERAL LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. b. This insurance applies to "bodily injury" and Read the entire policy carefully to determine "property damage" only if: rights, duties and what is and is not covered. (1) The "bodily injury" or "property damage" Throughout this policy the words "you" and is caused by an "occurrence" that takes "your" refer to the Named Insured shown in the place in the "coverage territory"; Declarations, and any other person or (2) The "bodily injury" or "property damage" organization qualifying as a Named Insured under occurs during the policy period; and this policy. The words "we", "us" and "our" refer to the company providing this insurance. (3) Prior to the policy period, no insured listed under Paragraph 1. of Section I) - The word insured means any person or Who Is An Insured and no "employee" organization qualifying as such under Section II - authorized by you to give or receive Who Is An Insured. notice of an "occurrence" or claim, knew Other words and phrases that appear in quotation that the "bodily injury" or "property marks have special meaning. Refer to Section V - damage" had occurred, in whole or in Definitions, part. If such a listed insured or authorized SECTION I - COVERAGES "employee" knew, prior to the policy that the "bodily injury" or period, A BODILY INJURY AND PROPERTY "property damage" occurred, then any DAMAGE LIABILITY continuation, change or resumption of 1. Insuring Agreement such "bodily injury" or "property a. We will pay those sums that the insured damage" during or after the policy period becomes legally obligated to pay as will be deemed to have been known prior damages because of "bodily injury" or to the policy period. "property damage" to which this c. "Bodily injury" or "property damage" which insurance applies. We will have the right occurs during the policy period and was not, and duty to defend the insured against prior to the policy period, known to have any "suit" seeking those damages. occurred by any insured listed under However, we will have no duty to defend Paragraph 1. of Section II - Who Is 'An the insured against any "suit" seeking Insured or any "employee" authorized by damages for "bodily injury" or "property you to give or receive notice of an damage" to which this insurance does not "occurrence" or claim, includes any apply. We may, at our discretion, continuation, change or resumption of that investigate any "occurrence" and settle "bodily injury" or "property damage" after any claim or "suit" that may result. But: the end of the policy period. (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. d. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; (2) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or (3) Becomes aware by any other means c. Liquor Liability that "bodily injury" or "property "Bodily injury" or "property damage" for damage" has occurred or has begun which any insured may be held liable by to occur. reason of: e. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". 2. Exclusions This insurance does not apply to: a. Expected Or Intended Injury (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. b. Contractual Liability "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided: (a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. d. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. e. Employer's Liability "Bodily injury" to: (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: 11) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". f. Pollution (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured. However, this subparagraph does not apply to: (i) "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot from equipment used to heat that building; iii) "Bodily injury" or "property damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or (iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; (b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; (c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for: (i) Any insured; or (ii) Any person or organization for whom you may be legally responsible; or (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the "pollutants" are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor. However, this subparagraph does not apply to: (i) "Bodily injury" or "property damage" arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic or mechanical functions necessary for the operation of "mobile equipment" or its parts, if such fuels, lubricants or other operating fluids escape from a vehicle part designed to hold, store or receive them. This exception does not apply if the "bodily injury" or "property damage" arises out of the intentional discharge, dispersal or release of the fuels, lubricants or other operating fluids, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent that they be discharged, dispersed or released as part of the operations being performed by such insured, contractor or subcontractor; (ii) "Bodily injury" or "property damage" sustained within a building and caused by the release of gases, fumes or vapors from materials brought into that building in connection with operations being performed by you or on your behalf by a contractor or subcontractor; or (iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire". (e) At or from any premises, site or location on which any insured or any contractors or subsontractors working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants". (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or (b) Claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority. g. Aircraft, Auto Or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading". This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; (2) A watercraft you do not own that is: (a) Less than 26 feet long; and (b) Not being used to carry persons or property for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed contract" for maintenance or watercraft; or under any "insured the ownership, use of aircraft or (5) "Bodily injury" or "property damage" arising out of the operation of any of the equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment". h. Mobile Equipment "Bodily injury" or "property damage" arising out of: (1) The transportation of "mobile equipment" by an "auto" owned or operated by or rented or loaned to any insured; or (2) The use of "mobile equipment" in, or while in practice for, or while being prepared for, any prearranged racing, speed, demolition, or stunting activity. i. War "Bodily injury" or "property damage" due to war, whether or not declared, or any act or condition incident to war. War includes civil war, insurrection, rebellion or revolution. This exclusion applies only to liability assumed under a contract or agreement. Damage To Property "Property damage" to: (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A seperate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". k. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. 1. Damage To Your Work "Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. m. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. n. Recall Of Products, Work Or Impaired Property Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of: (1) "Your product"; (2) "Your work"; or (3) "Impaired property"; if such product, work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. o. Personal And Advertising Injury "Bodily injury" arising out of "personal and advertising injury". Exclusions c. through n. do not apply to damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to this coverage as described in Section III - Limits Of Insurance. COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. b. This insurance applies to "personal and advertising injury" caused by an offense arising out of your business but only if the offense was committed in the "coverage territory" during the policy period. 2. Exclusions This insurance does not apply to: a. Knowing Violation Of Rights Of Another "Personal and advertising injury" caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict "personal and advertising injury". b. Material Published With Knowledge Of Falsity "Personal and advertising injury" arising out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity. c. Material Published Prior To Policy Period "Personal and advertising injury" arising out of oral or written publication of material whose first publication took place before the beginning of the policy period. d. Criminal Acts "Personal and advertising injury" arising out of a criminal act committed by or at the direction of the insured. e. Contractual Liability "Personal and advertising injury" for which the insured has assumed liability in a contract or agreement. This exclusion does not apply to liability for damages that the insured would have in the absence of the contract or agreement. f. Breach Of Contract "Personal and advertising injury" arising out of a breach of contract, except an implied contract to use another's advertising idea in your "advertisement". g. Quality Or Performance Of Goods - Failure To Conform To Statements "Personal and advertising injury" arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your "advertisement". h. Wrong Description Of Prices "Personal and advertising injury" arising out of the wrong description of the price of goods, products or services stated in your "advertisement". I. Infringement Of Copyright, Patent, Trademark Or Trade Secret "Personal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. However, this exclusion does not apply to infringement, in your "advertisement", of copyright, trade dress or slogan. j. Insureds In Media And Internet Type Businesses "Personal and advertising injury" committed by an insured whose business is: (1) Advertising, broadcasting, publishing or telecasting; (2) Designing or determining content of websites for others; or (3) An Internet search, access, content or service provider. However, this exclusion does not apply to Paragraphs 14.a., b. and c. of "personal and advertising injury" under the Definitions Section. For the purposes of this exclusion, the placing of frames, borders or links, or advertising, for you or others anywhere on the Internet, is not by itself, considered the business of advertising, broadcasting, publishing or telecasting. k. Electronic Chatrooms Or Bulletin Boards "Personal and advertising injury" arising out of an electronic chatroom or bulletin board the insured hosts, owns, or over which the insured exercises control. 1. Unauthorized Use Of Another's Name Or Product "Personal and advertising injury" arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatag, or any other similar tactics to mislead another's potential customers. m. Pollution "Personal and advertising injury" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time. n. Pollution-Related Any loss, cost or expense arising out of any: (1) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of , "pollutants"; or (2) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". COVERAGE C MEDICAL PAYMENTS 1. Insuring Agreement a. We will pay medical expenses as described below for "bodily injury" caused by an accident: (1) On premises you own or rent; (2) On ways next to premises you own or rent; or (3) Because of your operations; provided that: (1) The accident takes place in the "coverage territory" and during the policy period; (2) The expenses are incurred and reported to us within one year of the date of the accident; and (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require. b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) First aid administered at the time of an accident; (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services. 2. Exclusions We will not pay expenses for "bodily injury": a. Any insured To any insured, except "volunteer workers". b. Hired Person To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. Injury On Normally Occupied Premises To a person injured on that part of premises you own or rent that the person normally occupies. d. Workers Compensation And Similar Laws To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law. e. Athletics Activities To a person injured while taking part in athletics. f. Products-Completed Operations Hazard Included within the "products-completed operations hazard". g. Coverage A Exclusions Excluded under Coverage A. h. War Due to war, whether or not declared, or any act or condition incident to war. War includes civil war, insurrection, rebellion or revolution. SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 1. We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: a. All expenses we incur. b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. c. The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work. e. All costs taxed against the insured in the "suit". f. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. g. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. These payments will not reduce the limits of insurance. 2. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: a. The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; b. This insurance applies to such liability assumed by the insured; c. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; d. The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee; e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and f. The indemnitee: (1) Agrees in writing to: (a) Cooperate with us in the investigation, settlement or defense of the "suit"; (b) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (c) Notify any other insurer whose coverage is available to the indemnitee; and (d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (2) Provides us with written authorization to: (a) Obtain records and other information related to the "suit"; and (b) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b.(2) of Section I - Coverage A - Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the limits of insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met. SECTION 11 - WHO IS AN INSURED 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees. 2. Each of the following is also an insured: a. Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; c. Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property; and (2) Until your legal representative has been appointed. d. Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this Coverage Part. 3. With respect to "mobile equipment" registered in your name under any motor vehicle registration law, any person is an insured while driving such equipment along a public highway with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the equipment, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-"employee" of the person driving the equipment; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain ownership or majority interest, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: (b) To the spouse, child, parent, brother or sister of that co-"employee" or "volunteer worker" as a consequence of 4 Paragraph (1)(a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1)(a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. (2) "Property damage" to property: (a) Owned, occupied or used by, (b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", "volunteer workers", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company). b. Any person (other than your "employee" or "volunteer worker"), or any organization while acting as your real estate manager. a. Coverage under this provision is afforded only until the 90th day after you acquire or form the organization or the end of the policy period, whichever is earlier; b. Coverage A does not apply to "bodily injury" or "property damage" that occurred before you acquired or formed the organization; and c. Coverage B does not apply to "personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. SECTION III - LIMITS OF INSURANCE 1. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. The General Aggregate Limit is the most we will pay for the sum of: a. Medical expenses under Coverage C; b. Damages under Coverage A, except damages because of "bodily injury" or "property damage" included in the "products-completed operations hazard"; and c. Damages under Coverage B. 3. The Products-Completed Operations Aggregate Limit is the most we will pay under Coverage A for damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard". 4. Subject to 2. above, the Personal and Advertising Injury Limit is the most we will pay under Coverage B for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization. 5. Subject to 2. or 3. above, whichever applies, the Each Occurrence Limit is the most we will pay for the sum of: a. Damages under Coverage A; and b. Medical expenses under Coverage C because of all "bodily injury" and "property damage" arising out of any one "occurrence". 6. Subject to 5. above, the Damage To Premises Rented To You Limit is the most we will pay under Coverage A for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, while rented to you or temporarily occupied by you with permission of the owner. 7. Subject to 5. above, the Medical Expense Limit is the most we will pay under Coverage C for all medical expenses because of "bodily injury" sustained by any one person. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. If a claim is made or "suit" is brought against any insured, you must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You must see to it that we receive written notice of the claim or "suit" as soon as practicable. c. You and any other involved insured must: (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply. d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. 3. Legal Action Against Us No person or organization has a right under this Coverage Part: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Part unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 4. Other Insurance If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over: (1) Any of the other insurance, whether primary, excess, contingent or on any other basis: (a) That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (b) That is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner; (c) That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; or (d) If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section I - Coverage A - Bodily Injury And Property Damage Liability. (2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement. When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and (2) The total of all deductible and self-insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method of Sharing If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not 9. When We Do Not Renew permit contribution by equal shares, we If we decide not to renew this Coverage Part, will contribute by limits. Under this we will mail or deliver to the first Named method, each insurer's share is based on Insured shown in the Declarations written the ratio of its applicable limit of notice of the nonrenewal not less than 30 days insurance to the total applicable limits of before the expiration date. insurance of all insurers. If notice is mailed, proof of mailing will be 5. Premium Audit sufficient proof of notice. a. We will compute all premiums for this SECTION V - DEFINITIONS Coverage Part in accordance with our 1. "Advertisement" means a notice that is rules and rates. broadcast or published to the general public or b. Premium shown in this Coverage Part as specific market segments about your goods, advance premium is a deposit premium products or services for the purpose of only. At the close of each audit period we attracting customers or supporters. For the will compute the earned premium for that purposes of this definition: period and send notice to the first Named a. Notices that are published include material Insured. The due date for audit and placed on the Internet or on similar retrospective premiums is the date shown electronic means of communication; and as the due date on the bill. If the sum of the advance and audit premiums paid for b. Regarding web-sites, only that part of a the policy period is greater than the web-site that is about your goods, products earned premium, we will return the or services for the purposes of attracting excess to the first Named Insured. customers or supporters is considered an advertisement. c. The first Named Insured must keep records of the information we need for 2. "Auto" means a land motor vehicle, trailer or premium computation, and send us copies semi-trailer designed for travel on public roads, at such times as we may request. including any attached machinery or equipment. But "auto" does not include "mobile 6. Representations equipment". By accepting this policy, you agree: 3. "Bodily injury" means bodily injury, sickness or a. The statements in the Declarations are disease sustained by a person, including death accurate and complete; resulting from any of these at any time. b. Those statements are based upon 4. "Coverage territory" means: representations you made to us; and a. The United States of America (including its c. We have issued this policy in reliance territories and possessions), Puerto Rico and upon your representations. Canada; 7. Separation Of Insureds b. International waters or airspace, but only if the injury or damage occurs in the course of Except with respect to the Limits of travel or transportation between any places Insurance, and any rights or duties specifically included in a. above; or assigned in this Coverage Part to the first Named Insured, this insurance applies: c. All other parts of the world if the injury or damage arises out of: a. As if each Named Insured were the only (1) Goods or products made or sold by you Named Insured; and in the territory described in a. above; b. Separately to each insured against whom (2) The activities of a person whose home is claim is made or "suit" is brought. in the territory described in a. above, but 8. Transfer Of Rights Of Recovery Against is away for a short time on your Others To Us business; or If the insured has rights to recover all or part (3) "Personal and advertising injury" of any payment we have made under this offenses that take place through the Coverage Part, those rights are transferred to Internet or similar electronic means of us. The insured must do nothing after loss to communication impair them. At our request, the insured will provided the insured's responsibility to pay bring "suit" or transfer those rights to us and damages is determined in a "suit" on the help us enforce them. merits, in the territory described in a. above or in a settlement we agree to. 5. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker". 6. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document. 7. "Hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 8. "Impaired property" means tangible property, other than "your product" or "your work", that cannot be used or is less useful because: a. It incorporates "your product" or "your work" that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of "your product" or "your work"; or b. Your fulfilling the terms of the contract or agreement. 9. "Insured contract" means: a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner is not an "insured contract"; b. A sidetrack agreement; c. Any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad; d. An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; e. An elevator maintenance agreement; f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. Paragraph f. does not include that part of any contract or agreement: (1) That indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or crossing; (2) That indemnifies an architect, engineer or surveyor for injury or damage arising out of: (a) Preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (3) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of the insured's rendering or failure to render professional services, including those listed in (2) above and supervisory, inspection, architectural or engineering activities. 10. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker". 11. "Loading or unloading" means the handling of property: a. After it is moved from the place where it is accepted for movement into or onto an aircraft, watercraft or "auto"; b. While it is in or on an aircraft, watercraft or "auto"; or c. While it is being moved from an aircraft, watercraft or "auto" to the place where it is finally delivered; but "loading or unloading" does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or "auto". 12. "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment: a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; b. Vehicles maintained for use solely on or next to premises you own or rent; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted: (1) Power cranes, shovels, loaders, diggers or drills; or (2) Road construction or resurfacing equipment such as graders, scrapers or rollers; e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: (1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) Cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": (1) Equipment designed primarily for: (a) Snow removal; (b) Road maintenance, but not construction or resurfacing; or (c) Street cleaning; (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 14. "Personal and advertising injury" means injury, including consequential "bodily injury", arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f. The use of another's advertising idea in your "advertisement"; or 9• Infringing upon another's copyright, trade dress or slogan in your "advertisement". 15. "Pollutants" mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 16. "Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; (2) The existence of tools, uninstalled equipment or abandoned or unused materials; or (3) Products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products- completed operations are subject to the General Aggregate Limit. 17. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 18. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 19. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. 20. "Volunteer worker" means a person who is not your "employee", and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you. 21. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product"; and (2) The providing of or failure to provide warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 22. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXTENDED COVERAGE ENDORSEMENT GENERAL LIABILITY This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM 1. Amendment - Aggregate Limits of Insurance IV. Broad Form Named Insured The General Aggregate Limit under the a. WHO IS AN INSURED (Section II) is LIMITS OF INSURANCE (Section III) applies amended to include as an insured any separately to each of your: organization or subsidiary thereof, other than a partnership, joint venture, a. Projects away from premises owned by or or limited liability corporation, which is rented to you; a legally incorporated entity of which "Locations" owned by or rented to you. b you own a financial interest of more . than 50 percent of the voting stock on the effective date of this endorsement. "Location" means premises involving the same or connecting lots, or premises whose b. Paragraph IV.a. does not apply to connection is interrupted only by a street, injury or damage with respect to which roadway, waterway or right-of-way of a an insured under this policy is also an railroad. insured under another policy or would be an insured under such policy but for II. Bodily Injury Redefined its termination or upon the exhaustion The definition of "bodily injury" in of its limits of insurance. DEFINITIONS (Section V) is replaced by the c. Paragraph IV.b. does not apply to a following: policy written to apply specifically in "Bodily injury" means bodily injury, sickness excess of this policy. or disease sustained by a person including V. Newly Formed or Acquired Organizations mental anguish or death resulting from any of these. In paragraph 4.a. of WHO IS AN INSURED (Section II), 90th day is changed to 180th III. Mobile Equipment Redefined day. Paragraph 12.f. subparagraph (1) of DEFINITIONS (Section V) does not apply to VI. Incidental Malpractice Liability - Nurse, self-propelled vehicles of less than 1000 EMT, or Paramedic pounds gross vehicle weight. Paragraph 2.a.(1)(d) of WHO IS AN INSURED (Section ll) is deleted and replaced by: Arising out of his or her providing or failing to provide professional health care services. However, if you have "employees" who are a nurse, emergency medical technician or paramedic, they are an insured with respect to their providing or failing to provide professional health care services to your "employees". a r VII. Duties in the Event of Occurrence, Claim or Suit Redefined a. The requirement in Condition 2.a. of CONDITIONS (Section IV) that you must see to it that we are notified of an "occurrence" only applies when the "occurrence" or offense is known to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An officer of the corporation or insurance manager, if you are a corporation. b. The requirement in Condition 2.b. of CONDITIONS (Section IV) that you must see to it that we receive notice of a claim or "suit" will not be considered breached unless the breach occurs after such claim or "suit" is know to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An officer of the corporation or insurance manager, if you are a corporation. VIII. Unintentional Errors or Omissions We will not deny coverage under this Coverage Part because of the unintentional omission of, or unintentional error in, any information provided by you. However, this provision does not affect our right to collect additional premium or exercise our right of cancellation or non-renewal. IX. Non-Owned Watercraft a. Exclusion g. Paragraph (2) of COVERAGE A (Section 1) is deleted and replaced by the following: (2) A watercraft you do not own that is: (a) Less than 51 feet long; and (b) Not being used to carry persons or property for a charge; b. Paragraph IX.a. above applies to any person who, with your expressed or implied consent, either uses or is responsible for the use of a watercraft. c. Paragraphs IX.a. and IX.b. above do not apply if the insured has any other insurance for "bodily injury" or "property damage" liability that would also apply to loss covered under this provision, whether the other insurance is primary, excess, contingent or on any other basis. In that case, this Provision IX does not provide any insurance. d. Paragraph IX.c. above does not apply to a policy written to apply specifically in excess of this policy. X. Supplementary Payments Increased Limits In the SUPPLEMENTARY PAYMENTS - COVERAGE A and B (Section 1) provision: a. The limit for the cost of bail bonds is changed from $250 to $2000. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) PENNSYLVANIA In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury", "personal and advertising injury" or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. This coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above. + r PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO INSURED - PLEASE READ YOUR POLICY CAREFULLY This notice applies to insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM Your policy has been changed. The definition of "property damage" in your policy has been revised. Electronic data is not considered tangible property, therefore, there is no coverage for its loss nor any loss of use relating to the loss of data. Please refer to the definition of "property damage" contained in your policy (Form - CG 0001 10101, Page 15 of 16) for further clarification. Your policy has been changed to exclude coverage for "personal and advertising injury" for web site designers, internet search, access and service providers (with an exception for the mere placing of links, frames or borders), electronic chat rooms or bulletin boards, and unauthorized use of another's name or product in your e-mail address, domain name or metatag or any other similar tactics to mislead another's potential customers. Please refer to Coverage B-Personal and Advertising Injury Liability (Form CG0001 10/01, page 5 of 16 to 7 of 16). Your policy has been changed to clarify that expenses incurred for repairs made on the insured's own property for any reason, including to avoid injury to a third party, will not be covered. Refer to your policy (Form CG 0001 10/01, page 4 of 16, paragraph J(1) - Damage to Property) for further clarification. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO POLICYHOLDERS-CERTAIN COVERAGE IN THIS POLICY HAS BEEN ELIMINATED OR REDUCED This notice applies to Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Please read your policy, and the endorsements attached to your policy, carefully. 710188 0103 (PA); 710189 0103(NC);710948 0103- ASBESTOS ENDORSEMENT (EXCLUSION) When any combination of these endorsements (exclusions) are attached to your policy: Coverage will not apply for any liability arising out of the inhalation, ingestion, prolonged physical exposure, use, removal, manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. No coverage is provided by this policyholder notice nor can it be construed to replace any provisions of your policy. You should read your policy and review your declarations page for complete information on the coverages you are provided, if there is any conflict between the policy and this notice, the provisions of the policy shall prevail. 0 COMMERCIAL GENERAL LIABILITY CG 21 67 0402 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. FUNGI OR BACTERIA EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. The following exclusion is added to Paragraph 2., B. The following exclusion is added to Paragraph Exclusions of Section 1 - Coverage A - Bodily 2., Exclusions of Section I - Coverage B - Injury And Property Damage Liability: Personal And Advertising Injury Liability: 2. Exclusions 2. Exclusions This insurance does not apply to: This insurance does not apply to: Fungi or Bacteria Fungi or Bacteria a. "Bodily injury" or "property damage" a. "Personal and advertising injury" which which would not have occurred, in whole would not have taken place, in whole or or in part, but for the actual, alleged or in part, but for the actual, alleged or threatened inhalation of, ingestion of, threatened inhalation of, ingestion of, contact with, exposure to, existence of, or contact with, exposure to, existence of, presence of, any "fungi" or bacteria on or or presence of any "fungi" or bacteria within a building or structure, including its on or within a building or structure, contents, regardless of whether any other including its contents, regardless of cause, event, material or product whether any other cause, event, contributed concurrently or in any material or product contributed sequence to such injury or damage. concurrently or in any sequence to such b. Any loss, cost or expenses arising out of injury. the abating, testing for, monitoring, b. Any loss, cost or expense arising out of cleaning up, removing, containing, the abating, testing for, monitoring, treating, detoxifying, neutralizing, cleaning up, removing, containing, remediating or disposing of, or in any way treating, detoxifying, neutralizing, responding to, or assessing the effects of remediating or disposing of, or in any "fungi" or bacteria, by any insured or by way responding to, or assessing the any other person or entity, effects of, "fungi" or bacteria, by any This exclusion does not apply to any "fungi" insured or by any other person or entity. or bacteria that are, are on, or are contained C. The following definition is added to the in, a good or product intended for Definitions Section: consumption. "Fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or byproducts produced or released by fungi. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury," "personal and advertising injury," or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. The coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above. COMMERCIAL GENERAL LIABILITY CG 26 20 10 93 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES - LOSS INFORMATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ("OCCURRENCE" VERSION) The following Condition is added TO Amounts reserved are based on our COMMERCIAL GENERAL LIABILITY CONDITIONS judgment. They are subject to change and (Section IV): should not be regarded as ultimate 10. Your Right to Loss Information settlement values. We will provide the first Named Insured shown in the Declarations the following loss information relating to this and any preceding general liability Coverage Part we have issued to you during the previous three years: a. A list or other record of each "occurrence" of which we were notified in accordance with paragraph 2.a. of the Duties in the Event of Occurrence, Offense, Claim or Suit Condition in this Section. We will include a brief description of the "occurrence" and information on whether any claim arising out of the "occurrence" is open or closed. b. A summary by policy year, of payments made and amounts reserved, stated separately under any applicable General Aggregate Limit and Products-Completed Operations Aggregate Limit. You must not disclose this information to any claimant or any claimant's representative without our consent. We will provide this information only if we receive a written request from the first Named Insured during the policy period. We will provide this information within 45 days of receipt of the request. We compile claim and "occurrence" information for our own business purposes and exercise reasonable care in doing so. In providing this information to the first Named Insured, we make no representations or warranties to insureds, insurers or others to whom this information is furnished by or on behalf of any insured. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) NORTH CAROLINA In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury", "personal and advertising injury" or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. This coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above. COMMERCIAL GENERAL LIABILITY CG 21 70 1102 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY With respect to any one or more "certified acts of terrorism", we will not pay any amounts for which we are not responsible under the terms of the federal Terrorism Risk Insurance Act of 2002 (including subsequent acts of Congress pursuant to the Act) due to the application of any clause which results in a cap on our liability for payments for terrorism losses. "Certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism pursuant to the federal Terrorism Risk Insurance Act of 2002. The federal Terrorism Risk Insurance Act of 2002 sets forth the following criteria for a "certified act of terrorism": 1. The act resulted in aggregate losses in excess of $5 million; and 2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. l COMMERCIAL GENERAL LIABILITY CG 00 62 1202 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAR LIABILITY EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. Exclusion i. under Paragraph 2., Exclusions of B. The following exclusion is added to Paragraph Section I - Coverage A - Bodily Injury And 2., Exclusions of Section I - Coverage B - Property Damage Liability is replaced by the Personal And Advertising Injury Liability: following: 2. Exclusions 2. Exclusions This insurance does not apply to: This insurance does not apply to: WAR I. War "Personal and advertising injury", however "Bodily injury" or "property damage", caused, arising, directly or indirectly, out however caused, arising, directly or of: indirectly, out of: a. War, including undeclared or civil war; (1) War, including undeclared or civil or war; or b. Warlike action by a military force, (2) Warlike action by a military force, including action in hindering or including action in hindering or defending against an actual or expected defending against an actual or attack, by any government, sovereign expected attack, by any or other authority using military government, sovereign or other personnel or other agents; or authority using military personnel or c. Insurrection, rebellion, revolution, other agents; or usurped power, or action taken by (3) Insurrection, rebellion, revolution, governmental authority in hindering or usurped power, or action taken by defending against any of these. governmental authority in hindering C. Exclusion h. under Paragraph 2., Exclusions or defending against any of these. of Section I - Coverage C - Medical Payments does not apply. Medical payments due to war are now subject to Exclusion g. of Paragraph 2., Exclusions of Section I - Coverage C - Medical Payments since "bodily injury" arising out of war is now excluded under Coverage A. COMMERCIAL GENERAL LIABILITY CG 21 76 1102 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION OF PUNITIVE DAMAGES RELATED TO A CERTIFIED ACT OF TERRORISM This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY A. The following exclusion is added: This insurance does not apply to: TERRORISM PUNITIVE DAMAGES Damages arising, directly or indirectly, out of a "certified act of terrorism" that are awarded as punitive damages. B. The following definition is added: "Certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism pursuant to the federal Terrorism Risk Insurance Act of 2002. The federal Terrorism Risk Insurance Act of 2002 sets forth the following criteria for a "certified act of terrorism": 1. The act resulted in aggregate losses in excess of $5 million; and 2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. ? ?f y COMMERCIAL GENERAL LIABILITY CG 20 26 11 85 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person or Organization: (if no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. mW, PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO POLICYHOLDERS POTENTIAL RESTRICTIONS OF TERRORISM COVERAGE (General Liability and Commercial Umbrella) This Notice has been prepared in conjunction with the POTENTIAL implementation of changes related to coverage of terrorism under your policy. The Terrorism Risk Insurance Act of 2002 established a program (Terrorism Risk Insurance Program) within the Department of the Treasury, under which the federal government shares, with the insurance industry, the risk of loss from future terrorist attacks. That Program will terminate at the end of December 31, 2005 unless extended by the federal government. Your policy will become effective (or will be renewed) while the federal Program is still in effect, but prior to a decision by the federal government on extension of the federal Program. If the federal Program terminates, or is extended with certain changes, during the term of your policy, then the treatment of terrorism under your policy will change. This Notice is being provided to you for the purpose of summarizing potential impact on your coverage. The summary is a brief synopsis of significant exclusionary provisions and limitations. This Notice does not form a part of your insurance contract. The Notice is designed to alert you to coverage restrictions and to other provisions in certain terrorism endorsement(s) in this policy. If there is any conflict between this Notice and the policy (including its endorsements), the provisions of the policy (including its endorsements) apply. Carefully read your policy, including the endorsements attached to your policy. YOUR POLICY AT START OF NEW POLICY TERM If endorsement CG 21 70 or 71 1156 is attached to your policy and endorsement 71 1080 or 71 1073 is not attached to your policy This policy does not contain a terrorism exclusion. However, the policy contains an endorsement under which coverage for "certified acts of terrorism" (which is more fully defined in the endorsement but involves acts of terrorism by or on behalf of a foreign interest) is subject to a limit on our liability pursuant to the federal Terrorism Risk Insurance Act of 2002. Further, the absence of a terrorism exclusion does not create coverage for any loss that would otherwise be excluded under the policy, such as losses excluded by the nuclear hazard or war exclusions. If endorsements CG 21 70 and 71 1080 are both attached to your policy or endorsements 71 1 156 and 71 1073 are both attached to your policy This policy contains endorsements that make a distinction between "certified acts of terrorism" and "other acts of terrorism". Coverage is provided for "certified acts of terrorism" (which is more fully defined in the endorsements, but involves acts of terrorism by or on behalf of a foreign interest). This coverage is subject to a limit on our liability pursuant to the federal Terrorism Risk Insurance Act of 2002. Coverage for "other acts of terrorism" (terrorist acts other than certified acts) is excluded but such exclusion applies only if: (1) Aggregate losses from the event exceed $25 million; or (2) Fifty or more persons sustain death or physical injury; or (3) If the event qualified as a nuclear event; or (4) If the event qualified under certain circumstances as a biological or chemical event. With respect to "certified acts of terrorism" and "other acts of terrorism", policy exclusions (for example, the war liability exclusion) and other policy provisions continue to apply. POTENTIAL CHANGE DURING THE TERM OF YOUR POLICY: Endorsement CG 21 87 or 71 1156 is attached to your policy. Its provisions will become applicable to your policy only if certain events (one or more of them) occur. Those events include the following: • If the federal Terrorism Risk Insurance Program (TRIP) terminates with respect to the type of insurance provided under this policy. (TRIP is scheduled to terminate at the end of December 31, 2005 unless extended by the federal government.); or • If TRIP is extended with changes that redefine terrorism, and we are not required to make such revised coverage available to you; or • If TRIP is extended with changes that make insurance coverage for terrorism subject to provisions or requirements that differ from those that apply to other events or occurrences under this policy, and we are not required to make such revised coverage available to you; or • If TRIP is extended with changes that increase insurers' statutory percentage deductible under TRIP for terrorism losses, or decrease the federal government's statutory percentage share in potential terrrorism losses, and we are not required to make terrorism coverage available to you. Our deductible in 2004 is 10% of the total of our previous year's direct earned premiums. In 2005, that figure is 15%. The government's share is 90% of the terrorism losses paid by us above the deductible. A • ? r Endorsement CG 21 87 or 71 1156 treats terrorism as follows: • Coverage for loss or damage arising out of a terrorism incident is excluded only if: • The total of all insured damage to all types of property (including business interrruption losses sustained by owners or occupants of damaged property), from the incident, exceeds $25 million. The $25 million property damage threshold is based on losses sustained by all persons and entities who are affected by an incident of terrorism, and who are insured for the damage, or who would be insured but for a terrorism exclusion; or • Fifty or more persons sustain death or serious physical injury; or (To determine whether the threshold for property damage ($25) and persons injured (fifty) is exceeded, multiple incidents of terrorism which occur within a seventy-two hour period and appear to be linked together or have a related purpose or common leadership behind them shall be considered to be one incident of terrorism.) • The terrorism event involves nuclear materials or results in nuclear reaction or radiation or radioactive contamination; or • The terrorism event involves the release of radioactive material, and it appears that one purpose of the terrorism was to release such material; or • The terrorism event is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or • The terrorism event involves the release of pathogenic or poisonous biological or chemical materials, and it appears that one purpose of the terrorism was to release such materials. See the definition of terrorism for purposes of terrorism exclusions. ? ! 4 COMMERCIAL GENERAL LIABILITY CG 21 87 0504 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CONDITIONAL EXCLUSION OF TERRORISM (RELATING TO DISPOSITION OF FEDERAL TERRORISM RISK INSURANCE ACT OF 2002) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY A. Applicability Of The Provisions Of This Endorsement 1. The provisions of this endorsement will become applicable commencing on the date when any one or more of the following first occurs: a. The federal Terrorism Risk Insurance Program ("Program"), established by the Terrorism Risk Insurance Act of 2002, has terminated with respect to the type of insurance provided under this Coverage Part or Policy; or b. A renewal, extension or continuation of the Program has become effective without a requirement to make terrorism coverage available to you and with revisions that: (1) Increase our statutory percentage deductible under the Program for terrorism losses. (That deductible determines the amount of all certified terrorism losses we must pay in a calendar year, before the federal government shares in subsequent payment of certified terrorism losses.); or The Program is scheduled to terminate at the end of December 31, 2005 unless renewed, extended or otherwise continued by the federal government. 2. If the provisions of this endorsement become applicable, such provisions: a. Supersede any terrorism endorsement already endorsed to this policy that addresses "certified acts of terrorism" and/or "other acts of terrorism", but only with respect to an incident(s) of terrorism (however defined) which results in injury or damage that occurs on or after the date when the provisions of this endorsement become applicable (for claims made policies, such an endorsement is superseded only with respect to an incident of terrorism (however defined) that results in a claim for injury or damage first being made on or after the date when the provisions of this endorsement become applicable); and b. Remain applicable unless we notify you of changes in these provisions, in response to federal law. (2) Decrease the federal government's 3. If the provisions of this endorsement do statutory percentage share in NOT become applicable, any terrorism potential terrorism losses above such endorsement already endorsed to this deductible; or policy, that addresses "certified acts of terrorism" and/or "other acts of terrorism", (3) Redefine terrorism or make insurance will continue in effect unless we notify you coverage for terrorism subject to of changes to that endorsement in response provisions or requirements that differ to federal law. from those that apply to other types of events or occurences under this policy. B. The following definitions are added and apply under this endorsement wherever the term terrorism, or the phrase any injury or damage, are enclosed in quotation marks: 1. "Terrorism" means activities against persons, organizations or property of any nature: a. That involve the following or preparation for the following: (1) Use or threat of force or violence; or (2) Commission or threat of a dangerous act; or (3) Commission or threat of an act that interferes with or disrupts an electronic, communication, information, or mechanical system; and b. When one or both of the following applies (1) The effect is to intimidate or coerce a government or the civilian population or any segment thereof, or to disrupt any segment of the economy; or (2) It appears that the intent is to intimidate or coerce a government, or to further political, ideological, religious, social or economic objectives or to express (or express opposition to) a philosophy or ideology. 2. "Any injury or damage" means any injury or damage covered under any Coverage Part or Policy to which this endorsement is applicable, and includes but is not limited to "bodily injury", "property damage", "personal and advertising injury", "injury" or "environmental damage" as may be defined in any applicable Coverage Part or Policy. C. The following exclusion is added: EXCLUSION OF TERRORISM We will not pay for "any injury or damage" caused directly or indirectly by "terrorism", including action in hindering or defending against an actual or expected incident of "terrorism". "Any injury or damage" is excluded regardless of any other cause or event that contributes concurrently or in any sequence to such injury or damage. But this exclusion applies only when one or more of the following are attributed to an incident of "terrorism": 1. The "terrorism" is carried out by means of the dispersal or application of radioactive material, or through the use of a nuclear weapon or device that involves or produces a nuclear reaction, nuclear radiation or radioactive contamination; or 2. Radioactive material is released, and it appears that one purpose of the "terrorism" was to release such material; or 3.The "terrorism" is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or 4. Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the "terrorism" was to release such materials; or 5. The total of insured damage to all types of property exceeds $25,000,000. In determining whether the $25,000,000 threshold is exceeded, we will include all insured damage sustained by property of all persons and entities affected by the "terrorism" and business interruption losses sustained by owners or occupants of the damaged property. For the purpose of this provision, insured damage means damage that is covered by any insurance plus damage that would be covered by any insurance but for the application of any terrorism exclusions; or 6. Fifty or more persons sustain death or serious physical injury. For the purpose of this provision, serious physical injury means: a. Physical injury that involves a substantial risk of death; or b. Protracted and obvious physical disfigurement; or c. Protracted loss of or impairment of the function of a bodily member or organ. Multiple incidents of "terrorism" which occur within a 72-hour period appear to be carried out in concert or to have a related purpose or common leadership will be deemed to be one incident, for the purpose of determining whether the thresholds in Paragraphs C.5. or C.6. are exceeded. With respect to this Exclusion, Paragraphs C.5. and C.6. describe the threshold used to measure the magnitude of an incident of "terrorism" and the circumstances in which the threshold will apply, for the purpose of determining whether this Exclusion will apply to that incident. When the Exclusion applies to an incident of "terrorism", there is no coverage under this Coverage Part or Policy. In the event of any incident of "terrorism" that is not subject to this Exclusion, coverage does not apply to "any injury or damage" that is otherwise excluded under this Coverage Part or Policy. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY PRODUCTS-COMPLETED OPERATIONS REDEFINED This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. SECTION III - LIMITS OF INSURANCE, Paragraph 3., is deleted and replaced by the following: 3. The Products-Completed Operations Aggregate Limit is the most we will pay under Coverage A for damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard". This limit does not apply to products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products-completed operations are subject to the General Aggregate Limit. B. SECTION V - DEFINITIONS, Paragraph 16. "Products-completed operations hazard":, Subparagraph b. is deleted and replaced by the following: b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2) The existence of tools, uninstalled equipment or abandoned or unused materials. --A-_ ...........d..-A --A.1 ,.f Inm,.nnnn Rn.virnc officio Inc with its nermission . 14 PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: JAN. 01, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. GENERAL LIABILITY FORMS: CG2028 07/04 FORM NO. FORMSINV 1/86 ISSUED 03/10/05 e ) ( ¦ PENN NATIONAL COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS e INSURANCE {l 0-i.Na6ondWNWC-ItyImmenwCompany ENDORSEMENT NUMBER 01 EFFECTIVE DATE 01/01/05 Penn Nalond S-y Imum¢a Company P.O. Boa 2301 • Humbuiq, PA 17105-23BI NON-ASSESSABLE POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 1 01/01/06 PA NATIONAL MUTUAL CAS INS CO 0000008 06 NAMED IN SURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below. PREMISES NO. 1 : 415 W MARKET ST MIDDLEBURG SNYDER CO PA 17842 THE FOLLOWING ADDITIONAL INSURED IS ADDED: ADDITIONAL INTERESTS THE FOLLOWING GENERAL LIABILITY FORMS ARE: ADDED: CG2028 07/04 ADDITIONAL NEW ANNUAL PREMIUM: $130,386-00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $50.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: 100.02 SIGNATURE OF AUTHORIZED REPRESENTATIVE FORM 71-0050 (Ed. 03/91) ISSUED 03/10/05 't a POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 701/ 01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 LEXINGTON CAPITAL CORP IASOA C/O AMERICAN LEASE INS 654 AMHERST RD STE 301 SUNDERLAND MA 01375 LESSOR OF LEASED EQUIPMENT SEE CG2028 THE FOLLOWING IS ADDED: PREMISES NO.: 1 PNC LEASING LLC TWO PNC PLAZA 13TH FLR PITTSBURGH PA 15322 LESSOR OF LEASED EQUIPMENT SEE CG2028 FORM 71-0050S (ED. 03/91) ISSUED 03/10/05 4 'f 1 COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Or anization(s) PNC LEASING, LLC TWO PNC PLAZA, 13TH FLR PITTSBURGH PA 15322 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization (s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. CG 20 28 0704 Copyright ISO Properties, Inc., 2004 ? (1 A COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Or anization(s) LEXINGTON CAPITAL CORP IT'S ASSIGNS AND/OR ASSIGNEES C/O AMERICAN LEASE INSURANCE 654 AMHERST RD, STE 301 SUNDERLAND MA 01375 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization (s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. CG 20 28 0704 Copyright ISO Properties, Inc., 2004 ? v i PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: APR. 20, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. ** NO FORMS GENERATED ** FORM NO. FORMSINV 1/86 ISSUED 05/12/05 I 4 1 PENN NATIONAL POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT s INSURANCE Ponmtf•ada Naborul Mulud c-ly Imum- Company ENDORSEMENT NUMBER 02 EFFECTIVE DATE 04/20/05 Peon t dlond .y Imumrzs Company PO. 110.2301 •Marris6ulp, PA 17105-2901 NON-ASSESSABLE POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 1 01/01/06 PA NATIONAL MUTUAL CAS INS CO 0000008 06 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE A SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below: THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 RICHMOND AMERICAN HOMES OF VENDORS MARYLAND INC 6200 OLD DOBBIN LANE 0119 SEE CG2015 COLUMBIA MD 21046 ADDITIONAL NEW ANNUAL PREMIUM: $130,353.00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $0.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: 70.1% SIGNATURE OF AUTHORIZED REPRESENTATIVE FORM 71-0050 (Ed. 03/91) ISSUED 05/12/05 4 " PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: MAY 20, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. GENERAL LIABILITY FORMS: C02028 07/04 FORM NO. FORMSINV 1/86 ISSUED 06/01/05 • }i -Z PENN NATIONAL eo INSURANCE P-Ml,fnfie ""owl Muluel r-.fty Imummm Cmmpemy Pan timionei 5*",Iy I... m Cmmpmry P0. Bo.2H01 •li mmbmg, PA 171002001 COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS ENDORSEMENT NUMBER 03 EFFECTIVE DATE 05/20105 mYV1Y -------- POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 101/01/06 PA NATIONAL MUTUAL CAS INS CO 000000# 6 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below: THE FOLLOWING GENERAL LIABILITY FORMS ARE: ADDED: CG2028 07/04 ADDITIONAL NEW ANNUAL PREMIUM: $130,386.00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $0.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: FORM 71-0050 (Ed. 03/91) 61.9% SIGNATURE OF AUTHORIZED REPRESENTATIVE ISSUED 06/01/05 .10L it 4 POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 BUILDING NO.: 1 PNC BANK NA 4242 CARLISLE PIKE CAMP HILL PA 17011 LESSOR OF LEASED EQUIPMENT SEE CG2028 FORM 71-0050S (ED. 03/91) ISSUED 06/01/05 wk 4 J POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 to-1 ENDORSEMENT SCHEDULE CG2028 07/04 * ADDITIONAL INSURED-LESSOR OF LEASED EQUIPMENT FORM 71-1084 (ED. 04/03) ISSUED 06/01/05 0 w COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization(s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. CG 20 28 0704 Copyright ISO Properties, Inc., 2004 n ? ?';. ' -r 00 :^4 r l c op SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2008-00908 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND PENNSYLVANIA NATIONAL MUTUAL VS APEX HOMES INC ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: APEX HOMES INC but was unable to locate Them in his bailiwick. He therefore deputized the sheriff of SNYDER County, Pennsylvania, to serve the within COMPLAINT & NOTICE On February 27th , 2008 , this office was in receipt of the attached return from SNYDER Sheriff's Costs: So answers Docketing 18.00 =}` Out of County 9.00 Surcharge 10.00 R. Thomas Kline Dep Snyder County 31.00 Sheriff of Cumberland County Postage 5.80 73.80 ? 2/?`?/b8 , 02/27/2008 THOMAS THOMAS HAFER Sworn and subscribe to before me this day of A. D. SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2008-00908 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND PENNSYLVANIA NATIONAL MUTUAL VS APEX HOMES INC ET AL R. Thomas Kline Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: WRAY SCOTT D D/B/A WRAY'S CONTRACTING but was unable to locate Him in his bailiwick. He therefore deputized the sheriff of SNYDER serve the within COMPLAINT & NOTICE County, Pennsylvania, to On February 27th , 2008 , this office was in receipt of the attached return from SNYDER Sheriff's Costs: So answers: Docketing 6.00 Out of County 00 _ Surcharge 10.00 R. Thomas Kline ?? .00 Sheriff of Cumberland County .00 16.00 ?t a4/0? 02/27/2008 THOMAS THOMAS HAFER Sworn and subscribe to before me this day of A. D. SAVED DISK # 08-908 MISC. DKT. BOOK # 33 PAGE # 543 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY NO: 08-908 NOTICE AND COMPLAINT VS FOR DECLARATORY JUDGMENT APEX HOMES, INC. SCOTT D. WRAY, i/d/b/a WRAY'S CONTRACTING TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. AFFIDAVIT OF SERVICE AND NOW, February 20, 2008, I, Lucas C. Bingman, Deputy Sheriff for Joseph S. Reigle, Jr., Sheriff of Snyder County, Pennsylvania, being duly sworn according to law deposes and says that the above described Notice and Complaint for Declaratory Judgment was served upon Apex Homes, Inc., named defendant, on February 19, 2008, at 3:35 P.M., at 7172 Rt. 522, Middleburg, Snyder County, Pennsylvania, by personally handing to Chris Nipple, Administrator of the Estate a true and correct copy of the above described Notice and Complaint for Declaratory Judgment and that I made known to Chris Nipple the contents of the same. I hereby further certify and return the above described Notice and Complaint for Declaratory Judgment as NO SERVICE to the named defendant, Scott D. Wray, i/d/b/a Wray's Contracting. The address provided for the defendant of 724 Whiskey Rd., McClure is located in Mifflin County, Pennsylvania. SO ANSWERS JOSEPH S. REIGLE, JR., SHERIFF SNYDER COUNTY, PA. BY: ` DEPUTY LUC INGMAN COMMONWEALTH OF PENNSYLVANIA COUNTY OF SNYDER "SS: SWO T ND SUBSC BED BEFORE ME TICS AY OF 11 al 2008 r'.. DEPUTATION BY: SHERIFF OF CUMBERLAND COUNTY, PA. SNYDER COUNTY SHERIFF'S FEES: Docketing, Service, Etc. $ 23.00 Mileage 3.00 Notary 5.00 TOTAL: $ 31.00 Deposit: $75.00 Receipt # 7073 PAID TO COUNTY CHECK # REIMBURSED TO PETTY CASH CHECK # Refund: $44.00 Check # 5196 _b In The Court of Common Pleas of Cumberland County, Pennsylvania Pennsylvania National Mutual Casualty Insurance Company vs. Apex Hanes Inc et al SERVE: Scott D. Wray d/b/a Wray's Contracting No. 08-908 civil Now, February 14, 2008 , I, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Snyder ' County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. Sheriff of Cumberland County, PA Please mail return of service to Cumberland County Sheriff. Thank you. Affidavit of Service Now, within upon at by handing to a and made known to copy of the original the contents thereof. So answers, Sheriff of Sworn and subscribed before me this day of , 20 COSTS SERVICE _ MILEAGE _ AFFIDAVIT County, PA 20 , at o'clock M. served the SAVED DISK # 08-908 MISC. DKT. BOOK # 33 PAGE # 543 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY NO: 08-908 NOTICE AND COMPLAINT VS FOR DECLARATORY JUDGMENT APEX HOMES, INC. SCOTT D. WRAY, i/d/b/a WRAY'S CONTRACTING TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. AFFIDAVIT OF SERVICE AND NOW, February 20, 2008, I, Lucas C. Bingman, Deputy Sheriff for Joseph S. Reigle, Jr., Sheriff of Snyder County, Pennsylvania, being duly sworn according to law deposes and says that the above described Notice and Complaint for Declaratory Judgment was served upon Apex Homes, Inc., named defendant, on February 19, 2008, at 3:35 P.M., at 7172 Rt. 522, Middleburg, Snyder County, Pennsylvania, by personally handing to Chris Nipple, Administrator of the Estate a true and correct copy of the above described Notice and Complaint for Declaratory Judgment and that I made known to Chris Nipple the contents of the same. I hereby further certify and return the above described Notice and Complaint for Declaratory Judgment as NO SERVICE to the named defendant, The address provided for the defendant of 724 Whiskey Rd., McClure is located in Mifflin County, Pennsylvania. SO ANSWERS JOSEPH S. REIGLE, JR., SHERIFF SNYDER COUNTY, PA. BY: ` DEPUTY LUC . INGMAN COMMONWEALTH OF PENNSYLVA1vIA COUNTY OF SNYDER `SS: WO SWOJT,Q,AND SUBS _gRJBED BEFORE ME T 11 FF?_-???DAY OF - r 2008 DEPUTATION BY: SHERIFF OF CUMBERLAND COUNTY, PA. SNYDER COUNTY SHERIFF'S FEES: Docketing, Service, Etc. $ 23.00 Mileage 3.00 Notary 5.00 TOTAL: $ 31.00 Deposit: $75.00 Receipt # 7073 f PAID TO COUNTY CHECK # REIMBURSED TO PETTY CASH CHECK # Refimd: $44.00 Check # 5196 THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I.D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY 2 North Second Street Harrisburg, PA 17101, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff NO. 08-908 V. APEX HOMES, INC. 7172 Route 522 Middleburg, PA 17842, CIVIL ACTION SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd Charlotte, NC 28216 Defendants ACTION FOR DECLARATORY JUDGMENT PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: Please reinstate the Complaint filed on February 7?, 2008. LLP By (-I f -7,01Paul VWalkgf, squire Dated: -?? 0 Aq C C- { ? R CTY€T N c:J 0 c? ) Johnson, Duffle, Stewart & Weidner By: Michael J. Cassidy, Esquire I.D. No. 82164 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 mjc@jdsw.com PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Plaintiff V. APEX HOMES, INC., SCOTT D. WRAY, individually and d/b/a WRAY'S CONTRACTING and TIMBERLAKE CROSSING, LLC, Individually and as Assignee of TILSON CREATIONS, INC., Defendants NO. 08-908 CIV CIVIL ACTION - LAW JURY TRIAL DEMANDED ANSWER OF TIMBERLAKE CROSSING. LLC 1. Admitted, upon information and belief. 2. Admitted, upon information and belief. Attorneys for Defendant Timberlake Crossing, LLC IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNA. 3. Admitted, upon information and belief. 4. Admitted. 5. Admitted. 6. Admitted. 7. Admitted, upon information and belief. 8. Admitted. 9. Admitted. 10. Denied. The Complaint filed by Timberlake Crossing, LLC in the United States District Court for the Western District of Virginia, Roanoke Division, Action No. 7:07-CV-00338, is a writing which speaks for itself, and therefore Plaintiff's attempt to paraphrase the substance of the allegations set forth therein is denied. 11. Denied. After reasonable investigation, Answering Defendant is without knowledge or information sufficient to form a belief as to the truth of said averment, which is therefore denied. 12. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiffs complaint, being a writing, speaks for itself, and therefore said averment is denied. To the extent a specific denial is required, the complaint filed by Timberlake in the underlying Lawsuit specifically alleges that Apex Homes and its subcontractor, Wray's Contracting, performed its work in a negligent manner. 13. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiff's complaint, being a writing, speaks for itself, and therefore said averment is denied. To the extent a specific denial is required, it is specifically denied that the claims and damages alleged in the Lawsuit do not fall within the meaning of "occurrence," as that term is defined in the Policy. The claims and damages alleged in the Lawsuit are of a nature and degree of fortuity which fall squarely within the meaning of "occurrence," as that term is defined in the Policy. 14. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiffs complaint, being a writing, speaks for itself, and therefore said averment is denied. To the extent a specific denial is required, the damages alleged in the complaint filed by Timberlake in the underlying Lawsuit are damages which arose above and beyond those liabilities assumed by Apex Homes by way of contract or agreement, and which are of a nature and degree of fortuity which distinguish the alleged damages from those types of damages which would normally arise from faulty workmanship. The alleged damages are the direct result of the negligent acts of Apex Homes or its subcontractor, Wray's Contracting. 15. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiff's complaint, being a writing, speaks for itself, and therefore said averment is denied. To the extent a specific denial is required, the types and nature of damages alleged by Timberlake in its complaint in the underlying Lawsuit are squarely within the meaning of "property damage" as defined in the policy, in that the alleged damages include physical injuries to tangible property, including the loss of use of the property. 16. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiffs complaint, being a writing, speaks for itself, and therefore said averment is denied. 17. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. By way of further denial, the Policy appended to Plaintiff's complaint, being a writing, speaks for itself, and therefore said averment is denied. 18. Denied. In that said averment fails to aver any fact, no responsive pleading is required, and said averment is therefore deemed to be denied. WHEREFORE, Defendant Timberlake Crossing, LLC respectfully requests the Court to enter judgment in its favor and issue a declaratory judgment that: 1) Apex Homes, Inc. is entitled to a defense of the lawsuit; 2) Defendants are entitled to coverage under the policy for the claims and alleged damages in the lawsuit; and 3) Pennsylvania National Mutual Casualty Insurance Company is prohibited from withdrawing from the defense of Apex Homes, Inc. in the lawsuit. Respectfully submitted, JOHNSON, DUFFIE, STEWART & WEIDNER .3. Z8 - 08 L____.____ Date Michael J. Cassidy, Esquire I. D. No. 82164 301 Market Street Lemoyne, PA 17043 (717) 761-4540 Attorney for Defendant Timberlake Crossing, LLC :327869 15323-1 VERIFICATION I, Michael Broome , hereby acknowledge that Timberlake Crossing, LLC is a Defendant in this action and that I am authorized to make this verification on its behalf; that I have read the foregoing Answer to Plaintiff's Complaint; and that the facts stated therein are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are made subject to penalties of 18 Pa. C. S. §4904, relating to unsworn falsification to authorities. TIMBERLAKE CROSSING, LLC By: DATE: 03/27/2008 CERTIFICATE OF SERVICE AND NOW, this -:day of March, 2008, the undersigned does hereby certify that she did this date serve a copy of the foregoing ANSWER TO PLAINTIFF'S COMPLAINT upon the other parties of record by causing same to be deposited in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Paul R. Walker, Esquire Thomas, Thomas & Hafer, LLP 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (Attorney for Plaintiff) Timothy Nieman, Esquire Rhoads & Sinon One South Market Square Harrisburg, PA 17108 (Attorney for Apex Homes, Inc.) Scott D. Wray d/b/a Wray's Contracting 724 Whiskey Road McClure, PA 17841 (Pro Se) JOHNSON, DUFFIE, STEWART & WEIDNER By: di?rl6en S. Jensen Ell CO =?L'r t ?? y q tij ?? l l Timothy J. Nieman, Esquire Attorney I.D. No. 66024 David J. Staudt, Esquire Attorney I.D. No. 84236 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant Apex Homes, Inc. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY Plaintiff V. APEX HOMES, INC., SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING, and TIMBERLAKE CROSSING, LLC individually and as Assignee of TILSON CREATIONS, INC. Defendant You are Hereby Not(ffled To Plead To The Enclosed - NNt w µ, Twenty (20) Days From Service Hereof Within OrA Default Judgment May Be Entered AgainstYou.„ - Ai Attorney for Ae?r k. h a. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-908 Civil Term JURY TRIAL DEMANDED ANSWER AND NEW MATTER NOW COMES Defendant, Apex Homes, Inc. ("Apex"), by and through its undersigned counsel, and files this Answer and New Matter, stating as follows: Admitted on information and belief. 2. Admitted, except that the proper address for Apex is 7172 Route 522, Middleburg, Pennsylvania. 3. Admitted on information and belief. 4. Admitted on information and belief. 5. Admitted on information and belief. 683834.1 6. It is admitted that Apex manufactures modular housing. The remaining allegations of this Paragraph are legal conclusions to which no response is required. If an answer is deemed appropriate, it specifically denied that Timberlake contracted with Apex to erect the modular units at the site of the Project. 7. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 8. Admitted. 9. The Complaint is a written document that speaks for itself. It is admitted that Penn National currently is providing a defense to Apex in the Lawsuit. 10. Timberlake's Complaint is a legal document that speaks for itself. Admitted that the Complaint filed in Timberlake's lawsuit is attached as Exhibit A. 11. The Insurance Policy is a written document that speaks for itself. Denied that the entire Policy is attached at Complaint, Exhibit B. Numerous forms listed on the Policy's Forms Schedule are missing from Exhibit B, and Exhibit B purports to contain an endorsement amending the Products-Completed Operations Hazard term of the Policy that is not dated and not among the forms listed on the Form Schedule. 12. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 13. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 14. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 15. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 16. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 17. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. 18. The allegations of this Paragraph are legal conclusions to which no response is required. To the extent a response is deemed appropriate, these allegations are denied. WHEREFORE, Defendant Apex Homes, Inc., respectfully requests the Court to enter judgment in its favor and Order: 1) Apex Homes, Inc., is entitled to a defense of the underlying lawsuit; 2) Defendants are entitled to coverage under the Policy for the claims and alleged damages in the underlying lawsuit; and 3) Pennsylvania National Mutual Casualty Insurance Company is prohibited from withdrawing from the defense of Apex Homes, Inc., in the underlying lawsuit. NEW MATTER 19. Plaintiffs Complaint fails to state a claim upon which relief may be granted as to indemnity. 20. Plaintiff s Complaint fails to state a claim upon which relief may be granted as to Plaintiff s duty to defend. 21. The controversy is not ripe for disposition with respect to declaratory judgment as to Penn National's duty to indemnify. 22. The Plaintiff has failed to join one or more necessary and/or indispensable parties, including but not limited to Century Surety Company. 23. One or more of the exclusions and other Policy terms upon which Plaintiff relies are ambiguous, and must be construed in favor of the reasonable interpretation and expectation of the Defendants to afford coverage to Apex. 24. One or more of Plaintiff s applications of Policy exclusions is barred by the doctrine of regulatory estoppel. 25. One or more of Plaintiff s applications of Policy exclusions is barred by the doctrine of judicial estoppel. 26. One or more of Plaintiff s applications of Policy exclusions is barred by the doctrine of efficient proximate cause. 27. One or more of Plaintiff s applications of Policy exclusions is barred due to the creation in the insured of a reasonable expectation of coverage by the Plaintiff or Plaintiff s agents. 28. One or more Policy Forms that Plaintiff has not attached to its Complaint may enlarge Plaintiff's duty to defend and duty to indemnify beyond that set form in Plaintiffs' Exhibit B, precluding judgment for the Plaintiff. 29. One or more supplemental coverages or additional policies purchased by Apex from the Plaintiff but not attached to Plaintiffs' Complaint may obligate Plaintiff to defend and indemnify Apex in the underlying lawsuit. WHEREFORE, Defendant Apex Homes, Inc., respectfully requests the Court to enter judgment in its favor and Order: 1) Apex Homes, Inc., is entitled to a defense of the underlying lawsuit; 2) Defendants are entitled to coverage under the Policy for the claims and alleged damages in the underlying lawsuit; and 3) Pennsylvania National Mutual Casualty Insurance Company is prohibited from withdrawing from the defense of Apex Homes, Inc., in the underlying lawsuit. Respectfully submitted, RHOADS & SINON LLP By: Timothy J. Nie anDavid J. Staudt One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant Apex Homes, Inc. VERIFICATION Kent L. Jenkins, deposes and says, subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities, that he is Vice President of Finance of Apex Homes, Inc. and is authorized to make this verification on its behalf and the facts set forth in the foregoing document are true and correct to the best of his knowledge, information and belief. ?i?OQ CERTIFICATE OF SERVICE I hereby certify that on this 4th day of April, 2008, a true and correct copy of the foregoing document was served by means of first class mail, upon the following: Paul R. Walker, Esquire Thomas, Thomas & Hafer, LLP 305 North Front Street PO Box 999 Harrisburg, PA 17108 Scott D. Wray 724 Whiskey Road McClure, PA 17841 Michael J. Cassidy Johnson, Duffle, Stewart & Weidner 301 Market Street PO Box 109 Lemoyne, PA 17043-0109 ' C3 t sue; ? -v an t" ? Z T THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I.D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY 2 North Second Street Harrisburg, PA 17101, Plaintiff V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd Charlotte, NC 28216 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA No. 08-908 CIVIL ACTION ACTION FOR DECLARATORY JUDGMENT Defendants I PRAECIPE TO FILE RETURNS OF SERVICE TO THE PROTHONOTARY: Please file of record the attached Returns of Service of the Complaint served on Defendants, Apex Homes, Inc. and Scott D. Wray, Individually, d/b/a Wray's Contracting. Respectfully submitted, THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I. D. #88714 P. O. Box 999 305 North Front Street Harrisburg, PA 17108 (717) 237-7100 Date: 4/8/08 CERTIFICATE OF SERVICE I, Paul R. Walker, Esquire, hereby certify that I have served a true and correct copy of the foregoing document on the following by fax and placing same in the United (States mail, postage prepaid, on the ? day of 2008: Timothy J. Nieman, Esquire David J. Staudt, Esquire RHOADS & SINON, LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 Michael J. Cassidy, Esquire Johnson, Duffie, Stewart & Weidner 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0'09 Scott D. Wray, individually and d/b/a Wray's Contracting 724 Whiskey Road McClure, PA 17841 THOMAS, THOMAS & HAFER,'LLP By: Paul R. Walker, Esquire SAVED DISK # 08-908 MISC. DKT. BOOK # 33 PAGE # 543 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY NO: 08-908 NOTICE AND COMPLAINT VS FOR DECLARATORY JUDGMENT APEX HOMES, INC. SCOTT D. WRAY, i/d/b/a WRAY'S CONTRACTING TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. AFFIDAVIT OF SERVICE AND NOW, February 20, 2008, I, Lucas C. Bingman, Deputy Sheriff for Joseph S. Reigle, Jr., Sheriff of Snyder County, Pennsylvania, being duly sworn according to law deposes and says that the above described Notice and Complaint for Declaratory Judgment was served upon Apex Homes, Inc., named defendant, on February 19, 2008, at 3:3$ P.M., at 7172 Rt. 522, Middleburg, Snyder County, Pennsylvania, by personally handing to Chris Nipple, Administrator of t?e Estate a true and correct copy of the above described Notice and Complaint for Declaratory Judgment and that I made known to Chris Nipple the contents of the same. I hereby further certify and return the above described Notice and Complaint for Declaratory Judgment as NO SERVICE to the named defendant, Scott D. Wray, i/d/b/a Wray's Contracting. The address provided for the defendant of 724 Whiskey Rd., McClure is located in Mifflin County, Pennsylvania. SO ANSWERS JOSEPH S. REIGLE, JR., SHERIFF SNYDER COUNTY, PA. BY: DEPUTY LUC . INGMAN COMMONWEALTH OF PENNSYLVANIA COUNTY OF SNYDER `SS: SWO TQ,A.ND SUBS BED BEFOR8 ME TI S TftAY OF 4 2008 DEPUTATION BY: SHERIFF OF CUMBERLAND COUNTY, PA. SNYDER COUNTY SHERIFF'S FEES: Docketing, Service, Etc. $ 23.00 Mileage 3.00 Notary 5.00 Deposit: $75.00 Receipt # 7073 TOTAL: $ 31.00 PAID TO COUNTY CHECK # REIMBURSED TO PETTY CASH CHECK # Refund: $44.00 Check # 5196 Joseph A. Bradley, Sheriff Aaron K. Lewis, Chief Deputy Laurie J.•Kozak , Deputy Christoher S. Shade, Deputy Ch9rles L. Angney, Deputy James R. Bell, Deputy ?A-, SHERIFF'S OFFICE MIFFLIN COUNTY 20 North Wayne Street Lewistown, PA 17044 (717) 242-1105 - Fax: (717) 248-2907 Plaintiff: PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY Court Number: County: Defendant: APEX HOMES, INC. Type of Writ or SCOTT D. WRAY INDIVIDUALLY AND d/b/a WRAY'S CONTRACTING CIVIL ACTION Name: SCOTT D. WRAY Address: 724 WISKEY ROAD, Serve MCCLURE, PA. 17841. At Name: I Address: David W. Molek, Solicitor (717) 248-9656 CUMBERLAND COUNTY Writ Complaint Indicate Unusual Service: ? Comm. of Pa. ? Deputization ? Other Now 20 , I, SHERIFF OF MIFFLIN COUNTY, PA. do hereby deputize the Sheriff of County to execute this Writ and make return thereof according to law. This deputization is made at the request and risk of plaintiff. X Sheriff of Mifflin Co. Special Instructions or other information that will assist in expediting service: Attorney or other Organization requesting service: Telephone No: Date Filed: THOMAS, THOMAS & HAFER, LLP (717) 441-7061 3110!2008 I ackn edge re ipt of the Writ or C laint as indicated above: Date Received: Exp. Date: V , _ Z? -,-? 3/13/2008 41912008 I reb ERTIFY and RETURN 9161 © have personally served. ? have legal evidence of Service as shown in 'Remarks'% ? have executed as shown in "Remarks", the Writ or Complaint described on the ind idual, company, corporation, etc. at the address shown above or on the individual, company, corporation, etc., at the address inserted below, handing a TRUE and ATTESTED copy thereof. ?1 hereby certify and return a NOT FOUND because I am unable to locate the individual, company, corporation, etc., name above. (See Remarks below.) Name and Title of individual served: CJ A person of suitablie age and discretion SERVED LISA WILSON, GIRLFRIEND, FOR SCOTT D. WRAY then residing at the defendent's usual place of abode. Address where served (complete only if different than shown above) Date of Service: 3/13/200 Time: 2:40 PM Attempts Date Miles Dep. Int. Date Miles Dep. Int. Date Miles Dep. Int. 1 3113/2008 24 JRB Advance Costs Service Costs Mileage Postage Surcharge Notary T tal Refund $75.00 $18.00 $18.60 $1,00 $0.00 $5.00 $4.60 $32.40 Remarks: (See other side) Sworn0o and subscfibed before me this X tl Notary P Notarial Seal NOTARIAL 8EAL WILSON, Notary PWft wn 8oro, Mifflin Courty Mdon Expku March 31, 2011 Sn Answers- De ty heriff JA SR L 3/1412008 X SheiKV, Aoseph A. Brad 3/14/2008 X /001- °? ` Fin 7J SHERIFF'S RETURN - OUT OF COUNT`. CASE NO: 2008-C0908 P COMMONWEALTH OF' PENNSYLVANIA: COUNTY OF CUMBERLAND PENNSYLVANIA NATIONAL MUTUAL VS APEX HOMES INC ET AL R. Thomas Kline Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT WRAY SCOTT D D/B/A WRAY'S but was unable to locate Him CONTRACTING to wit: in his bailiwick. He therefore deputized the :sheriff of MIFFLIN serve the within COMPLAINT & NOTICE On March 20th , 2008 , this office was in receipt of the attached return from MIFFLIN Sheriff's Costs: So answer Docketing 18.00 Out of County 9.00 Surcharge 10.00 . Thomas Kli e Dep Mifflin County 42.60 Sheriff of Cumberland County Postage 4.44 c 84.04 ? 3127/09 am. ._ Ylq 03/20/2008 ` I THOMAS THOMAS HAFER Sworn and subscribe to before me this day of County, Pennsylvania, to A. D. In The Court of Common Pleas of'Cumberland County, Pennsylvania Pennsylvania National Mutual Casualty Insurance Company vs. Apex Homes Inc et al SERVE: Scott D. Wray d/b/a Wray's Contracting 08-908 civil No. Now, March 1.2, 2008 , I, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Mifflin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. a' Sheriff of Cumberland County, PA Please mail return of service to Cumberland County Sheriff. Thank you. Affidavit of Service Now, within upon at by handing to a and made known to So answers, the contents thereof. Sheriff of Sworn and subscribed before me this day of , 20 copy of the original COSTS SERVICE _ MILEAGE _ AFFIDAVIT 20 , at o'clock M. served the County, PA Joseph A. Bradley , Sheriff Baron K. Lewis , Chief Deputy Laurie J. Kozak, Deputy Christoher S. Shade , Deputy Charles L. Angney, Deputy James R. Bell , Deputy SHERIFF'S OFFICE MIFFLIN COUNTY 20 North Wayne Street Lewistown, PA 17044 (717) 242-1105 - Fax: (717) 248-2907 David W. Molek, Solicitor (717) 248-9656 Plaintiff: PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY I Court Number: 908-08 County: CUMBERLAND COUNTY Defendant: APEX HOMES, INC. Type of Writ or Complaint: -I Writ SCOTT D. WRAY INDIVIDUALLY AND d/b/a WRAY'S CONTRACTING CIVIL ACTION TIMBERLAKE CROSSING LLC Complaint Serve At Name: SCOTT D. WRAY Name: Address: 724 WISKEY ROAD, MCCLURE, PA. 17841. Address: Indicate Unusual Service: L Comm. of Pa. C Deputization -_1 Other Now 20 , I, SHERIFF OF MIFFLIN COUNTY, PA. do hereby deputize the Sheriff of County to execute this Writ and make return thereof according to law. This deputization is made at the request and risk of plaintiff. X Sheriff of Mifflin Co. Special Instructions or other information that will assist in expediting service Attorney or other Organization requesting service: Telephone No: Date Filed: THOMAS, THOMAS & HAFER, LLP (717) 441-7061 3/10/2008 1 ackn ledge re ipt of the Writ or C faint as indicated above: Date Received: Exp. Date: X ?x?? 3/13/2008 4/9/2008 reby-CERTIFY and RETURN tftt I [v have personally served. have legal evidence of service as shown in "Remarks", have executed as shown in "Remarks", the Writ or Complaint described on the individual, company, corporation, etc. at the address shown above or on the individual, company, corporation, etc., at the address inserted below, handing a TRUE and ATTESTED copy thereof. I hereby certify and return a NOT FOUND because I am unable to locate the individual, company, corporation, etc., name above. (See Remarks below.) Name and Title of individual served: V A person of suitable age and discretion SERVED LISA WILSON, GIRLFRIEND, FOR SCOTT D. WRAY then residing at the defendent's usual place of abode. Address where served (complete only if different than shown above) Date of Service: Time: 3/13/2008 2:40 PM Attempts Date Miles Dep.lnt. Date Miles Dep.lnt. Date Miles tDep.lnt. 1 3/13/2008 24 JRB Advance Costs Service Costs Mileage Postage Surcharge Notary Total Refund $75.00 $18.00 $18.60 $1.00 $0.00 $5.00 $42.60 $32.40 KemarKS: (See otner side) Swor Ao and subscfibed before me this X 1712 IL 1C1 &' ' Notary Public Notarial Seal NOTARIAL SEAL PATRICIAA. WILSON, Notary Public Lewistown Soro, Mifflin County My Commission Expires March 31, 2011 So Answers: L De ty heri ^ JM7 3/14/2008 n$ X She4fl -Joseph A. Bradle 3/14/2008 THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I.D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMFANY 2 North Second Street Harrisburg, PA 17101, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY. PA Plaintiff V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brooksnire Blvd Charlotte, NC 28216 Defendants NO. 08-908 Civil Term CIVIL ACTION - LAW REPLY TO NEW MATTER AND NOW, comes Plaintiff Pennsylvania National Mutual Casualty Insurance Company, by and through its counsel, Thomas, Thomas and Hafer, LLP, and files this Reply to Defendant Apex Homes, Inc.'s New Matter, and states as follows: REPLY TO NEW MATTER 19 - 29. Paragraphs 19 through 29, inclusively, represent conclusions of law to which no response is required. WHEREFORE, Plaintiff, Nationwide Mutual Insurance Company, demands judgment be entered in its favor. Dated: ii 1-0$ 585554 Respectfully submitted, THOS, THOMAS & HAFER, LLP PaUIR. Walker, Esquire I. D. #88714 P. O. Box 999 305 North Front Street Harrisburg, PA 17108 (717) 237-7100 2 VERIFICATION I, Randy Amos, on behalf of Pennsylvania National Mutual Casualty Insurance Company, verify that the foregoing Complaint and the attached documents are based upon the information which has been gathered by me, my counsel and/or others on my behalf in preparation of this lawsuit. The language of the document is that of counsel and is not mine. I have read the document, and to the extent that it is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information, and belief. To the extent that the contents of the document are that of counsel, I have relied upon counsel in making this Verification. I understand that intentional false statements herein are made subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsifications made to authorities. Date: </T l7 ?8 or Penn Ivania National Mutual Casualty Insuran Company CERTIFICATE OF SERVICE I, Gwen M. Cleck, employee of the law firm of Thomas, Thomas & Hafer, LLP, hereby certify that I have served a true and correct copy of the foregoing document on the following by placing same in the United States mail, postage prepaid, on the 21st day of April, 2008: Timothy J. Nieman, Esquire David J. Staudt, Esquire RHOADS & SINON, LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 Michael J. Cassidy, Esquire Johnson, Duffie, Stewart & Weidner 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Scott D. Wray, individually and d/b/a Wray's Contracting 724 Whiskey Road McClure, PA 17841 THOMAS, THOMAS & HAFER, LLP By: Gwen M. C eck n ^J _ Tj rQ PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next Argument Court.) CAPTION OF CASE: (entire caption must be stated in full) PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY vs. APEX HOMES, INC., SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. No. 908 , 2008 Term State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Plaintiff Pennsylvania National Mutual Casualty Insurance Company's Motion for Summary Judgment 2. Identify all counsel who will argue cases: (a) for plaintiffs: Paul R. Walker, Thomas, Thomas & Hafer, LLP, PO Box 999 Harrisburg, PA 17108 (Name and Address) (b) for defendants: Timothy J. Nieman, Rhoads & Sinon, LLP, One South Market Square, 12th Floor, PO Box 1146. Harrisburg, PA 17108-1146 (Attorneys for Apex Homes. Inc.) Michael J. Cassidy, Johnson, Duffle, Stewart & Weidner, 301 Market Street, PO Box 109, Lemoyne, PA 17043-0109 (Attorneys for Timberlake Crossing, LLC) Scott D. Wray, Individually and d/b/a Wray's Contracting, 724 Whiskey Road, McClure, PA 17841 (Pro Se) 3. 1 will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: Paul R. Walker Print your name Plaintiff Pennsylvania Nat. Mut. Cas. Ins. Co. Attorney for Date: August .2008 INSTRUCTIONS: 1. Two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 12 days prior to argument. 3. The responding party shall file their vrief 5 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. c:.+ w a` 'T"? ??" ? `" r -``l ?- i? THOMAS, THOMAS & HAFER, LLP Paul R. Walker, Esquire I.D. No. 88714 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 (717) 441-7061 Attorney for Plaintiff PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY 2 North Second Street Harrisburg, PA 17101, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff NO. 08-908 Civil Term V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, CIVIL ACTION - LAW SCOTT D. WRAY individually and d/b/a WRAY'S CONTRACTING 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd Charlotte, NC 28216 Defendants MOTION FOR SUMMARY JUDGMENT OF PLAINTIFF PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY AND NOW, comes Plaintiff Pennsylvania National Mutual Casualty Insurance Company, by and through its counsel, Thomas, Thomas and Hafer, LLP, and files this Motion for Summary Judgment, and states as follows: 1. This action for declaratory judgment was filed by Plaintiff Pennsylvania National Mutual Casualty Insurance Company ("Penn National"). 2. Defendant Timberlake Crossing, LLC, Individually and as Assignee of Tilson Creations, Inc. ("Timberlake"), upon information and belief, is the owner and developer of a residential townhome project ("Project") located in Franklin County, Virginia. 3. Timberlake filed a lawsuit on or about July 10, 2007, in the United States District Court for the Western District of Virginia, Roanoke Division, action no. 7:07-cv- 00338 ("Lawsuit"). The Lawsuit names Apex Homes, Inc. ("Apex") and Scott Wray, an individual doing business as Wray's Contacting ("Wray's") as Defendants. A copy of the Complaint filed in the Lawsuit is attached as Exhibit "A". 4. Timberlake alleges in the Lawsuit that Apex manufactures modular housing. As part of the construction for the Project, Timberlake alleges that it contracted with Apex to provide modular units for the townhome units which comprise the Project. Timberlake also alleges that it contracted with Apex to erect the modular units at the site of the Project, and that in turn, Apex contracted with Wray's to perform the work to erect the modular units at the site of the Project. 5. Apex delivered the modular units to the Project beginning in July, 2005. 6. The Complaint filed in the Lawsuit alleges, inter alia, faulty workmanship causing alleged damage to the modular units, and further alleges two counts: breach of contract and breach of warranty. 7. Penn National issued an insurance policy to Apex, policy number GI-9 0103079, effective January 1, 2005 to January 1, 2006 ("Policy"). A copy of the Policy is attached as Exhibit "B". Penn National is defending Apex under reservation of rights in the Lawsuit. 8. The Policy does not provide coverage for the claims in the Lawsuit as the gist of such action is contractual in nature. 9. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as there is no "occurrence" within the meaning of the Policy. 10. The Policy does not provide coverage for the claims and alleged damages in the Lawsuit as such claims and damages are caused by faulty workmanship and as the alleged damages were foreseeable. 11. Penn National has no duty to defend the Lawsuit. 12. Penn National has no duty to indemnify any party, including Apex, with respect to any verdict, judgment or other award or order which may be entered in the Lawsuit. 13. No genuine issues of material fact exist which would preclude the entry of judgment in favor of Plaintiff, as the duty to defend and indemnify is limited to consideration of the allegations of the Lawsuit, without the admission of extrinsic evidence. 14. Plaintiff is entitled to judgment in its favor as a matter of law. WHEREFORE, Plaintiff, Pennsylvania National Mutual Casualty Insurance Company, respectfully requests the Court to enter judgment in its favor and issue a declaratory judgment that: 1) Apex is not entitled to a defense of the Lawsuit; 2) No coverage, whether defense or indemnity, exists under the Policy for the claims and alleged damages in the Lawsuit; 3) Penn National has no duty to indemnify Apex Homes, Inc. or any other party with respect to any judgment, verdict, award or other order which may be entered in the Lawsuit; 4) Penn National may immediately withdraw from the defense of Apex in the Lawsuit; and 5) or for such other relief as may be appropriate. Respectfully submitted, THOMAS/,, TFJOMAS & HAFER, LLP Paul 13! Walker, Esquire I.D. #88714 P. O. Box 999 305 North Front Street Harrisburg, PA 17108 Dated: August 7, 2008 (717) 237-7100 Respectfully submitted, CERTIFICATE OF SERVICE I, Paul R. Walker, Esquire, hereby certify that I have served a true and correct copy of the foregoing document by placing same in the United States mail, postage prepaid, on the 7th day of August, 2008: Timothy J. Nieman, Esquire David J. Staudt, Esquire RHOADS & SINON, LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 Michael J. Cassidy, Esquire Johnson, Duffie, Stewart & Weidner 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Scott D. Wray, individually and d/b/a Wray's Contracting 724 Whiskey Road McClure, PA 17841 & HAFER, LLP By: Paul R. Walker, Esquire 611822.1 Exti,6 tPr 07/2', 107 12:50 FAX 540 983 945$ GENTRY LOCIM IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINI./ ROANOK,E DIVISION TIMBERLAKE CROSSING, L.L.C., Individually and as Assignee of TILSON CREATIONS, INC. Plaintiff, V. APEX HOMES, INC., Serve: Registered Agent: CT Corporation System 4701 Cox Rd. Suite 301 Glen Allen, VA 23060 and SCOTT D. WRgY d/b/a WRAY'S CONTRACTING, Serve: Scott D. Wray 724 Whiskey Road McClure, PA 17841 i and WRAY''S CONTRACTING Serve: Scott D. Wray 724 Whiskey Road McClure, PA 17841 Defendants. CASE NUMBER: a 002 •r-^r,-5 UNN UE U.S. DIST. AT ROANOKE, VA FILED JUL 10 X07 JOHN F. CO RC,QR 5-1 BY; L11 //??''// =d 7 -C 0 -de?33 COMPLAINT CQMES NOW the plaintiff, Timberlake Crossing, L.L.C. ("Plainti$" or "Timberlake"), by counsel, and files than Complaint against the defendants, Apex Homes, Inc. and Scott D. Wray d/b/a Wray's Contracting, and Wray's Contracting, and in support thereof states as follows: 18120/I!!3$1665v1 07/27/07 12:50 FAX 540 983 9468 GENTRY LOCIiE Parties and Jurisdictioin Z003 I. Plaintiff is a Virginia limited liability company formed under the laws of Virginia with its principal place of business located at 6132-C Brookshire Boulevard, Charlotte, North Carolina. The three individual members of the limited liability company are citizens of North Carolina. Accordingly, Plaintiff is considered a citizen and resident of the Commonwealth of Virginia and North Carolina. 2. Plaintiff is also the assignee of any rights acchiing to TilsoD Creations, Inc., related to the issues in contention. Tilson Creations is a North Carolina corporation with its principal office in Chapel Hill, North Carolina. 3. Defendant Apex Homes, Inc. ("Apex") is a corporation incorporated under the laws of the Commonwealth of Pennsylvania and having its cozporate office and principal place of business in Pennsylvania at 7172 Route 522, Middleburg, Pennsylvania, 17842. Accordingly, Apex is considered a citizen and resident of Pennsylvania. 4. Upon information and belief, Defendant Scott'D. Wray d/b/a Wray's Contracting is a citizen and resident of McClure, Pennsylvania. Timberlake is not aware that Wray's Contracting is incorporated, despite research, but has included the company as a separate entity in the event it is a corporation. Scott D. Wray and Wray's Contracting, whether incorporated or not, will be referred to collectively as "Wray's Contracting." 5. For purposes of the allegations set forth herein, Apex contracted to provide goods and services irl Virginia. Additionally, Apex is registered to do business in Virginia with the Virginia State Corporation Commission. 6. For purposes of the allegations set forth herein; W> ay's Contracting came into Virginia; performed work, and transacted business under a contract in Virginia- 2 18120/1/1381665vt 07/27/07 12:51 FAX 540 983 9458 GENTRY LOCKE 1_1? 004 7. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. The parties are of diverse citizenship and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. Furthermore, defendants' actions subject them to jurisdiction in Virginia under Virginia Code § 8.01-328.1- 8. Venue is proper in this district pursuant to 28 U.S.C. § 1391 because the defendants are subject to personal jurisdiction in this district and transacted business in this district, and because a substantial part of the events giving rise to this claim occurred within this district. FACTS 9. Timberlake is the owner and developer of a residential townhome project (tire "Project") located on property that Timberlake owns in Franklin County, Virginia. Work bean on the Project in or about April, 2005.. 10. Prior to the creation of Timberlake, Tilson Creations communicated with Apex regarding the sale and installation of modular home units for the Project. 11. Apex, among other things, manufactures modular housing. As part of the construction of townhome units for the Project, Timberlake contracted with Apex to provide the modular units for the 24 townhome units comprising the Project. Separate and apart from the sale of the modular units, Timberlake also contracted with Apex to provide services to erect or "set" the modular units, and construct a roof over them, in order to form the 24 townhomes. The townhomes at the Project are divided into three separate buildings, two of which buildings have nine (9) townhomes and one of which has six (6) townhomes. The modular units comprise the main/first floor (one modular unit) and second floor (a second modular unit) of each townhome. 12. Upon information and belief; Apex subcontracted with Wray's Contracting to perform the work to "set" the modular units. Apex charged Timberlake for these services, anti, upon payment by Timberlake, Apex paid Wray's Contracting'. Apex represented to Timberlake that 3 18120W1 381665vi 07/27/07 12:51 FAX 540 983 9468 GENTRY LOCI{E aoo5 Wray's contracting was experienced and performed good quality work in setting modular units like those for the Project. Timberlake Crossing was and is an intended third party beneficiary of the subcontract between Apex and Wray's Contracting. 13. Apex delivered or had delivered the modular units to the Project in Franklin County beginning in late July 2005. Thereafter, Wray's Contracting's workers began setting the units. 14. Wray's Contracting was involved in setting all twelve of the modular units in the six townhomes in the building located at 232 Mountain Cove Drive, and all eighteen of the modular units in the nine townhomes in the building located at 230 Mountain Cove. Drive. In addition, Wray's Contracting set ten modular units ill five townhomes in the building located at 231 Mountain Cove Drive. 15. During the time when Wray's Contracting was setting the approximately 40 modular units in 20 of the townhomes, Wray's Contracting failed ' to perform its work in a good and workmanlike manner. Instead, it performed its work in a negligent manner such that it allowed excessive amounts of eater to enter the interior and wall cavities of the modular units before it placed the roofs on the units. 16. The water that entered into the units resulted in many of the components of the units becoming wet and saturated. The water caused damage to components of the units, including, but not limited to, wallboards, wood flooring, carpeting, ceilings, 'sheetrock, insulation, and framing. 17. When the water damage was discovered, Timberlake approached Scott Wray on the building site and asked Wray's Contracting, both in its own capacity and/or as a representative and agent of Apex Homes, to fix the damage. However, to date, Wray's Contracting has not done anything to repair the damage it caused. Apex -likewise has not paid for the repair or mold remediation at the townhomes. 4 18120/1/13816651 07/27/07 12:51 FAb 540 983 9468 GENTRY LUCRE Ca 006 18_ As a result of the moisture that entered the units, mold and mildew developed in certain locations, and conditions existed where it was likely to develop in other locations if not addressed immediately. 19. Timberlake promptly took actions to determine the extent of the damage caused by the moisture by, among other things, enlisting the services of ECS-Mid Atlantic, L.L.C., ("ECS") to study the nature and extent of the damage in each of the townhome units. 20. Timberlake also undertook, through itself, and other contractors, to perform work to address and remediate the resulting problems and damages. 21. Timberlake has expended at least $764,404 to investigate and remediate the problems and damages. 22. In addition; the presence of the moisture and the resulting damages resulted in a significant delay in Timberlake being able to sell the townhomes; thus causing it to carry loans on the project and to incur additional interest on its loans and an additional delay in recognizing the benefit from the sales. Timberlake's costs related to these delays are approximately $196,317 to date, and an additional $178,138.20 has been paid to date in interest and fees caused by the repairs and delay. Count f: Breach of Contract 23. Plaintiff re-alleges and incorporates by reference herein all preceding paragraphs. 24. Plaintiff Timberlake contracted with Apex to provide installation of the modular units for the Project. 25. Apex contracted with Wray's Contracting to provide those installation services. Timberlake was and is a direct and intended beneficiary of that contract_ 26. Wray's Contracting was obligated, and in turn Apex was obligated, to perform the installation work in a good and workmanlike manner. 5 18120/1! 1381665v l 07/27/07 12:51 FAX 540 983 9468 GENTRY LOCKE Z007 27. Apex and Wray's Contracting each breached the agreement to install the units, and in particular the obligation to perform the work in a good and workmanlike manner. Instead, they installed the units improperly and negligently, causing the modular units to be infiltrated by water and resulting in the propagation of mold and other damages. 28. The breaches of contract by Apex and by Wray's Contracting have caused Timberlake to incur damages including, but not limited to, the cost of investigating the extent of the damage, the costs associated with repair of the damage and other remediation to make the units habitable, and other costs, as stated in Paragraphs 20 through 23 above. 29. These problems have also prevented Timberlake from closing on the sales of a number of these units, and resulted in the damages stated in Paragraph 23 above. WHEREFORE, Timberlake CrossiuS respectfully moves this Court for entry of a judgment against the defendants, jointly and severally, in an amount to be determined at trial, but not less than $1,135,859 as damages for injury and costs sustained by it, pre judgment interest, post judgment interest, and its costs expended in this matter. Count II: $reach of Warrantv 30. Plaintiff re-alleges and incorporates by reference herein all preceding paragraphs. 31. As a part of the foregoing contracts set forth in and addressed in Count I, above, both Apex and Wray's Contracting impliedly warranted that they would perform work in a good and workmanlike manner. To the extent that Wray's Contracting provided such warranty to Apex, Timberlake is a third-party beneficiary of that warranty. 32. Neither Apex, nor its subcontractor, Wray's Contracting, performed in accordance with that warranty, and, therefore, breached the warranty. Instead, they installed the units improperly and negligently, causing the modular units to be infiltrated by water and resulting in the propagation of mold and other damages, 18120/1/] 381665vi 6 07/27/07 12:52 FAX 540 983 9468 GENTRY LOCKE a po8 33. The breaches of warranty by Apex and by Wray's Contracting have caused Timberlake to incur damages, including but not limited to the cost of the modular units which must be repaired or replaced, the costs associated with repair and mold remediation to make the units habitable, and other costs, as stated in Paragraphs 20 through 23 above. 34. These problems have also prevented Timberlake from closing on the sales of a number of these units, and resulting in the damages in Paragraph 23 above. WHEREFORE, Timberlake Crossing respectfully moves this Couit for entry of a judgment against the defendants, jointly and severally, in an amount to be determined at trial, but not less than $1,138,859 as damages for injury and costs sustained by it, pre judgment interest, post judgment interest, and its costs expended in this matter. JURY DEMAND The plaintiff, by counsel, demands a trial by jury- TIMBERLAKE CROSSING, L.L.C. By: /s/ Kafhleen L. Wright. Of Counsel K. Brett Marston, Esq. (VSB No. 35900) Kathleen L. Wright, Esq. (VSB No. 48942) GENTRY LOCKE RAKES & MOORE, LLP P.O. Box 40013 Roanoke, "Virginia 24022-0013 Telephone: (540) 983-9300 Facsimile: (540) 983-9400 Counsel for Plaintiff 7 18120/111381665x1 ?xh?d?+ B ?<<? Awl PENN NATIONAL e INSURANCE Pennsylvania National Mutual Casualty Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 I ceriity hat this is a true copy of what was rnailed. THIS POLICY JACKET WITH THE INFORMATION PAGE, POLICY, FORMS AND ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETES THIS POLICY. MUTUAL POLICY CONDITIONS THIS POLICY IS NON-ASSESSABLE. THE POLICYHOLDER IS A MEMBER OF THE COMPANY AND SHALL PARTICIPATE TO THE EXTENT AND UPON THE CONDITIONS FIXED AND DETERMINED BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH THE PROVISIONS OF LAW, IN THE DISTRIBUTION OF DIVIDENDS SO FIXED AND DETERMINED. ANNUAL MEETING THE INSURED IS HEREBY NOTIFIED THAT BY VIRTUE OF THIS POLICY, HE IS A MEMBER OF THE PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY AND IS ENTITLED TO VOTE EITHER IN PERSON OR BY PROXY AT ANY AND ALL MEETINGS OF SAID COMPANY. THE ANNUAL MEETINGS OF THE COMPANY ARE HELD AT ITS HOME OFFICE IN THE CITY OF HARRISBURG, PA. ON THE SECOND MONDAY OF APRIL IN EACH YEAR, AT 10:00 O'CLOCI<A.M.,AND THE INCLUSION OF THIS NOTICE IN THIS POLICY SHALL CONSTITUTE NOTICE TO THE MEMBER OF THE ANNUAL MEETING. IN WITNESS WHEREOF, The company has caused this policy to be signed by its president and secretary but this policy shall not be valid unless completed by the attachment hereto of a Declaration Page, Policy or Coverage Part(s) and Endorsements, if any, and countersigned on the aforesaid declarations page by a duly authorized representative of the company. VIRGINIA EXCEPTION Lack of countersignature does not invalidate the policy. ? ?? Secretary 0. 1 President PENN NATIONAL • INSURANCE Pavsylvania Nalianal factual CasLoky Yawata Con"il Pam National Sa iky Imwa Company P.O. Box 2361 • Flartsbug, PA 17105 COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS OCCURRENCE POLICY RENEWAL OF GL9 0103079 IJ l1M-ACSFRSIIRLF THIS POLICY IS SUBJECT TO A GENERAL AGGREGATE LIMIT POLICY NUMBER FROM POLICY PERIOD T COVERAGE IS PROVIDED IN AGENCY BR 61-9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 0000008 06 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 POLICY PERIOD: POLICY COVERS FROM: 12:01 A.M. STANDARD TIME AT THE ADDRESS OF THE INSURED STATED ABOVE. FORM OF BUSINESS: CORPORATION BUSINESS DESCRIPTION: MODULAR HOME MANUFACTURER IN RETURN FOR PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. LIMITS OF INSURANCE General Aggregate Limit (Other than products - completed operations) $ 2,000,000 Products - Completed Operations Aggregate Limit $ 2,000,000 Personal and Advertising Injury Limit - Any one person or organization $ 11000,000 Each Occurrence Limit $ 11000,000 Damage to Premises Rented to you Limit - Any one premises $ 100,000 Medical Expense Limit - Any one person $ 5 , 000 PREMIUM INFORMATION RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS SEE SUPPLEMENTAL DECLARATIONS, FORM 71-0029S INSTALLMENT SERVICE FEE $44.00 * INCLUDES NJ PROP./LIAB. INS. GUARANTY ASSOC. SURCHARGE $33.00 =ORMS APPLICABLE TO THIS COVERAGE PART: SEE ATTACHED FORMS SCHEDULE, FORM 71-1084 RISK TYPE RIA$5 SK CL TMC SIC CODE ?EMSUMAN UND. TEAM 5 2 1 99 N 007 COUNTERSIGNED BY: Authorized Representative THESE DECLARATIONS TOGETHER WITH THE COMMON POLICY CONDITIONS, COVERAGE PART COVERAGE FORM(S), AND FORMS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETE THE ABOVE NUMBERED POLICY. MDAKIr,U Tcc11Gn n1 i1) d/ 0 9; COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 PREMISES NO. 1 : 415 W MARKET ST MIDDLEBURG SNYDER CO PA 17842 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 61226 2,600 SQUARE FEET 1000 VARIOUS INCLUDED PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 2 : 2 MI W OF KREAMER MIDDLEBUR G SNYDER CO PA 17842 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 1 MDL.HOME(S) EACH VARIOUS INCLUDED MODEL HOMES PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 57146 30,000,000 GROSS SALES 1000 VARIOUS VARIOUS INCLUDED INCLUDED MODULAR UNITS MFG. PREMISES NO. 3 : 550 RT 15 SPARTA SUSSEX CO NJ 07871 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 1 MDL.HOME(S) EACH VARIOUS INCLUDED PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 4 : 1 BRIDGE ST SELINSGR OVE SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 3 MDL.HOME(S) EACH VARIOUS INCLUDED MODEL HOMES PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000E 06 PREMISES NO. 5 : 4212 HWY 74 W MONROE UNION CO NC 28110 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 46362 1 MDL.HOME(S) EACH VARIOUS INCLUDED PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 6 : RR 2 MT PLEASANT MILLS SNYDER CO PA 17843 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 7 : LOT 22 WEDGEWOOD DR SELINSGROVE SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED .OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT PREMISES NO. 8 : 65-67 WALNUT ST MIDDLEBURG SNYDER CO PA 17870 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT COMMERCIAL GENERAL LIABILITY SUPPLEMENTAL DECLARATIONS POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 PREMISES NO. 9 : LOT 32 N 4TH ST MIFFLINBURG UNION CO PA 17844 RATES ADVANCE PREMIUM CODE PREMIUM BASIS PER PREMS/OPS PRODUCTS PREMS/OPS PRODUCTS 49451 1 ACRE(S) EACH VARIOUS INCLUDED VACANT LAND - OTHER THAN NOT-FOR-PROFIT PRODUCTS-COMPLETED OPERATIONS SUBJECT TO GENERAL AGGREGATE LIMIT ADDITIONAL INTERESTS POLICY NUMBER FROM POLICY PERIOD To COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06, PA NATIONAL MUTUAL CAS INS CO 000000 06 FORMS SCHEDULE GENERAL LIABILITY FORKS: 710477 05/93 710576 01/05 IL0017 11/98 IL0246 07/02 IL0910 07/02 IL0021 07/02 IL0208 07/02 IL0269 07/02 711105 01/05 710619 03/01 C62150 09/89 710543 05/00 710546 01/94 CG2147 07/98 CG2161 04/98 CG2151 09/89 CG2149 09/99 710897 05/01 000001 10/01 710680 07/02 710188 01/03 710988 07/02 711043 01/03 CG2187 04/02 710948 01/03 CG2620 10/93 710189 01/03 711061 02/03 CG2170 11/02 C60062 12/02 C62176 11/02 CG2026 11185 711148 01/05 CG2187 05/04 711153 01/05 FORM 71-1064 (ED. 04/03) BRANCH ISSUED 01/24/05 POLICY SCHEDULE OF NAMES AND ADDRESSES POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 Fl/ 01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES APEX HOMES INC AND/OR PARAMOUNT HOMES OF PA AND/OR PARAMOUNT HOMES OF NO AND/OR PINE VIEW REALTY CONTINUED NAMED INSURED PREMISES NO.: 1 MIFFLINBURG BANK & TRUST 250 E CHESTNUT ST MIFFLINBURG PA 17844 DESIGNATED PERSON/ORGANIZATION SEE CG2028 PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171055-2361 IMPORTANT NOTICE Enclosed is your renewal declarations. Please note that all endorsements listed on the renewal declarations will remain in effect during this policy term. We have attached only new or revised endorsements. For copies of any endorsement that is not attached, refer to your original policy. Thank you for placing your coverage with Penn National Insurance. To file a claim, contact your agent or call (800) 766-2245. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 ATTACHED IS FORM 71 1061 0203 NOTICE - DISCLOSURE OF TERRORISM INSURANCE COVERAGE PREMIUM PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT IS ATTACHED TO AND MADE PART OF YOUR POLICY IN RESPONSE TO THE DISCLOSURE REQUIREMENTS OF THE TERRORISM RISK INSURANCE ACT OF 2002. THIS ENDORSEMENT DOES NOT GRANT ANY COVERAGE OR CHANGE THE TERMS AND CONDITIONS OF ANY COVERAGE UNDER THE POLICY. NOTICE - DISCLOSURE OF TERRORISM INSURANCE COVERAGE PREMIUM The Terrorism Risk Insurance Act of 2002 establishes a program within the Department of the Treasury under which the federal government shares with the insurance industry the risk of loss from future terrorist attacks. The Act applies when the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States, certifies that an event meets the definition of an act of terrorism. The Act provides that, to be certified, an act of terrorism must cause losses of at least five million dollars and must have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest to coerce the government or population of the United States. In accordance with the federal Terrorism Risk Insurance Act of 2002 we are required to offer you coverage for losses resulting from certified acts of terrorism. The policy's other provisions will still apply to any such act. DISCLOSURE OF PREMIUM The portion of your annual premium that is attributable to coverage for acts of terrorism is $ 0.00. SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE Under Federal Law, you have thirty (30) days to consider this offer of coverage for terrorist acts. You may choose to reject the offer by signing the enclosed statement and returning it to us and your policy will be written to exclude the described coverage to the extent permissible by statute in your state. Commercial Umbrella Policies Only If you choose to accept this offer of coverage for certified acts of terrorism, coverage provided under your Commercial Umbrella Policy will be excess over any underlying policy limits regardless of whether you have accepted or rejected coverage on those policies for certified acts of terrorism. DISCLOSURE OF FEDERAL PARTICIPATION IN PAYMENT OF TERRORISM LOSSES Effective November 26, 2002, under your existing coverage, any losses caused by certified acts of terrorism would be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States Government, Department of the Treasury pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casually Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 REJECTION OF TERRORISM INSURANCE COVERAGE I hereby reject the offer of terrorism coverage. I understand that an exclusion of certain, terrorism losses will be made part of this Coverage Part/Policy. Policyholder Signature Print Name Date Policy Number INTERLINE IL 00171198 COMMON POLICY CONDITIONS All Coverage Parts included in this policy are subject to the following conditions. A. Cancellation 1. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation. 2. We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least: a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or b. 30 days before the effective date of cancellation if we cancel for any other reason. 3. We will mail or deliver our notice to the first Named Insured's last mailing address known to us. 4. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. 5. If this policy is cancelled, we will send the first Named Insured any premium -refund due. If we cancel, the refund will be pro rata. If the first Named insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. 6. If notice is mailed, proof of mailing will be sufficient proof of notice. B. Changes This policy contains all the agreements between you and us concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent. This policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy. C. Examination Of Your Books And Records We may examine and audit your books and records as they relate to this policy at any time during the policy period and up to three years afterward. D. Inspections And Surveys 1. We have the right to: a. Make inspections and surveys at any time; b. Give you reports on the conditions we find; and c. Recommend changes. 2. We are not obligated to make any inspections, surveys, reports or recommendations and any such actions we do undertake relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. And we do not warrant that conditions: a. Are safe or healthful; or b. Comply with laws, regulations, codes or standards. 3. Paragraphs 1. and 2. of this condition apply not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. 4. Paragraph 2. of this condition does not apply to any inspections, surveys, reports or recommendations we may make relative to certification, under state or municipal statues, ordinances or regulations, of boilers, pressure vessels or elevators. E. Premiums The first Named Insured shown in the Declarations: 1. Is responsible for the payment of all premiums; and 2. Will be the payee for any return premiums we pay. F. Transfer Of Your Rights And Duties Under This Policy Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured. If you die, your rights and duties will be transferred to your legal representative but only while acting within the scope of duties as your legal representative. Until your legal representative is appointed, anyone having proper temporary custody of your property will have your rights and duties but only with respect to that property. INTERLINE IL 02 46 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. PENNSYLVANIA CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART A. The Cancellation Common Policy Condition is b. You have failed to pay a premium when replaced by the following: due, whether the premium is payable CANCELLATION directly to us or our agents or indirectly The first Named Insured shown in the 1 under a premium finance plan or . Declarations may cancel this policy by extension of credit. Notice of cancellation writing or giving notice of cancellation. will be mailed at least 15 days before the effective date of cancellation. 2. Cancellation Of Policies In Effect For Less Than 60 Days c. A condition, factor or loss experience We may cancel this policy by mailing or material to insurability has changed delivering to the first Named Insured substantially or a substantial condition, written notice of cancellation at least 30 factor or loss experience material to days before the effective date of insurability has become known during the cancellation. policy period. Notice of cancellation will 3. Cancellation Of Policies In Effect For 60 be mailed or delivered at least 60 days Days Or More before the effective date of cancellation. If this policy has been in effect for 60 days Loss of reinsurance or a substantial d or more or if this policy is a renewal of a . policy we issued, we may cancel this decrease in reinsurance has occurred, policy only for one or more of the which loss or decrease, at the time of cancellation, shall be certified to the following reasons: Insurance Commissioner as directly a. You have made a material affecting in-force policies. Notice of misrepresentation which affects the cancellation will be mailed or delivered at of insurability of the risk. Notice before the effective date of least 60 days will be mailed or delivered cancellation. at least 15 days before the effective date of cancellation. e. Material failure to comply with policy terms, conditions or contractual duties. Notice of cancellation will be mailed or delivered at least 60 days before the effective date of cancellation. f. Other reasons that the Insurance Commissioner may approve. Notice of cancellation will be mailed or delivered at least 60 days before the effective B date of cancellation. This policy may also be cancelled from inception upon discovery that the policy was obtained through fraudulent statements, omissions or concealment of facts material to the acceptance of the risk or to the hazard assumed by us. 4. We will mail or deliver our notice to the first Named Insured's last mailing address known to us. Notice of cancellation will state the specific reasons for cancellation. 5. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. 6. If this policy is cancelled, we will send the first Named Insured any premium refund due. If we cancel, the refund will be pro rata and will be returned within 10 business days after the effective date of cancellation. If the first Named Insured cancels, the refund may be less than pro rata and will be returned within 30 days after the effective date of cancellation. The cancellation will be effective even if we have not made or offered a refund. 7. If notice is mailed, it will be by registered or first class mail. Proof of mailing will be sufficient proof of notice. The following are added and supersede any provisions to the contrary: 1. Nonrenewal If we decide not to renew this policy, we will mail or deliver written notice of nonrenewal, stating the specific reasons for nonrenewal, to the first Named insured at least 60 days before the expiration date of the policy. 2. Increase Of Premium If we increase your renewal premium, we will mail or deliver to the first Named Insured written notice of our intent to increase the premium at least 30 days before the effective date of the premium increase. Any notice of nonrenewal or renewal premium increase will be mailed or delivered to the first Named Insured's last known address. If notice is mailed, it will be by registered or first class mail. Proof of mailing will be sufficient proof of notice. IL 09 10 0702 PENNSYLVANIA NOTICE An Insurance Company, its agents, employees, or service contractors acting on its behalf, may provide services to reduce the likelihood of injury, death or loss. These services may include any of the following or related services incident to the application for, issuance, renewal or continuation of, a policy of insurance: 1. Surveys; 2. Consultation or advice; or 3. Inspections. The "Insurance Consultation Services Exemption Act" of Pennsylvania provides that the Insurance Company, its agents, employees or service contractors acting on its behalf, is not liable for damages from injury, death or loss occurring as a result of any act or omission by any person in the furnishing of or the failure to furnish these services. The Act does not apply: 1. If the injury, death or loss occurred during the actual performance of the services and was caused by the negligence of the Insurance Company, its agents, employees or service contractors; 2. To consultation services required to be performed under a written service contract not related to a policy of insurance; or 3. If any acts or omissions of the Insurance Company, its agents, employees or service contractors are judicially determined to constitute a crime, actual malice, or gross negligence. Instruction to Policy Writers Attach the Pennsylvania Notice to all new and renewal certificates insuring risks located in Pennsylvania. INTERLINE IL 00 21 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT (Broad Form) This endorsement modifies insurance provided under the following: COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART FARM COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY 1. The insurance does not apply: B. Under any Medical Payments coverage, to "bodily Under any Liability Coverage, to bodily A expenses incurred with respect to "bodily " " . " hazardous resulting from the injury : injury" or "property damage properties" of "nuclear material" and arising (1) With respect to which an "insured" out of the operation of a "nuclear facility" by under the policy is also an insured any person or organization. under a nuclear energy liability policy C. Under any Liability Coverage, to "bodily issued by Nuclear Energy Liability injury" or "property damage" resulting Insurance Association, Mutual Atomic from "hazardous properties" of "nuclear Energy Liability Underwriters, Nuclear material", if: Insurance Association of Canada or any of their successors, or would be (1) The "nuclear material" (a) is at any an insured under any such policy but "nuclear facility" owned by, or operated for its termination upon exhaustion of by or on behalf of, an "insured" or (b) has its limit of liability; or been discharged or dispersed therefrom; (2) Resulting from the "hazardous (2) The "nuclear material" is contained in properties" of "nuclear material" and "spent fuel" or "waste" at any time with respect to which (a) any person possessed, handled, used, processed, or organization is required to maintain stored, transported or disposed of, by or financial protection pursuant to the on behalf of an "insured"; or Atomic Energy Act of 1954, or any (3) The "bodily injury" or "property damage" law amendatory thereof, or (b) the arises out of the furnishing by an "insured" is, or had this policy not "insured" of services, materials, parts or been issued would be, entitled to equipment in connection with the indemnity from the United States of planning, construction, maintenance, America, or any agency thereof, operation or use of any "nuclear facility", under any agreement entered into by but if such facility is located within the the United States of America, or any United States of America, its territories or agency thereof, with any person or possessions or Canada, this exclusion (3) organization. applies only to "property damage" to such "nuclear facility" and any property thereat. 2. As used in this endorsement: "Hazardous properties" includes radioactive, toxic or explosive properties. "Nuclear material" means "source material", "Special nuclear material" or "by-product material". "Source material", "special nuclear material" and "by-product material" have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof. "Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor". "Waste" means any waste material (a) containing "by-product material" other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its "source material" content, and (b) resulting from the operation by any person or organization of any "nuclear facility" included under the first two paragraphs of the definition of "nuclear facility". "Nuclear facility" means: (a) Any "nuclear reactor"; (b) Any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing "spent fuel", or (3) handling, processing or packaging "waste"; (c) Any equipment or device used for the processing, fabricating or alloying of "special nuclear material" if at any time the total amount of such material in the custody of the "insured" at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235; (d) Any structure, basin, excavation, premises or place prepared or used for the storage or disposal of "waste"; and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations. "Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of fissionable material. "Property damage" includes all forms of radioactive contamination of property. INTERLINE IL 02 08 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART A. Pursuant to New Jersey law, this policy cannot be cancelled or nonrenewed for any underwriting reason or guideline which is arbitrary, capricious or unfairly discriminatory or without adequate prior notice to the insured. The underwriting reasons or guidelines that an insurer can use to cancel or nonrenew this policy are maintained by the insurer in writing and will be furnished to the insured and/or the insured's lawful representative upon written request. This provision shall not apply to any policy which has been in effect for less than 60 days at the time notice of cancellation is mailed or delivered, unless the policy is a renewal policy. B. Paragraph 2 . of the Cancellation Common Policy Condition is replaced by the following: 2. If this policy has been in effect for less than 60 days, we may cancel this policy for any reason subject to the following: a. We may cancel this policy by mailing or delivering to the first Named Insured and any person entitled to notice under this policy written notice, of cancellation, at least: (1) 10 days before the effective date of cancellation if we cancel for: (a) Nonpayment of premium; or (b) Existence of a moral hazard, as defined in N.J.A.C. 11:1-20.2(f) as follows: (i) "The risk, danger or probability that the insured will destroy, or permit to be destroyed, the insured property for the purpose of collecting the insurance proceeds. Any change in the circumstances of an insured that will increase the probability of such a destruction may be considered a 'moral hazard'; and (ii) "The substantial risk, danger or probability that the character, circumstances or personal habits of the insured may increase the possibility of loss or liability for which an insurer will be held responsible. Any change in the character or circumstances of an individual, corporate, partnership or other insured that will increase the probability of such a loss or liability may be considered a 'moral hazard'". (2) 30 days before the effective date of cancellation if we cancel for any other reason. b. In the notice of cancellation which is sent to the first Named Insured, we will state the reason for cancellation. C. The following is added to the Cancellation Common Policy Condition: 7. Cancellation Of Policies In Effect For 60 Days or More a. If this policy has been in effect for 60 days or more, or is a renewal of a policy we issued, we may cancel this policy only for one or more of the following reasons: (1) Nonpayment of premium; (2) Existence of a moral hazard, as defined in N.J.A.C. 11:1-20.2(f); (3) Material misrepresentation or nondisclosure to us of a material fact at the time of acceptance of the risk; (4) Increased hazard or material change in the risk assumed which we could not have reasonably contemplated at the time of assumption of the risk; (5) Substantial breaches of contractual duties, conditions or warranties that materially affect the nature and/or insurability of the risk; (6) Lack of cooperation from the insured on loss control matters materially affecting the insurability of the risk; (7) Fraudulent acts against us by the insured or its representative that materially affect the nature of the risk insured; (8) Loss of or reduction in available insurance capacity; (9) Material increase in exposure arising out of changes in statutory or case law subsequent to the issuance of the insurance contract or any subsequent renewal; (10) Loss of or substantial changes in applicable reinsurance; (11) Failure by the insured to comply with any Federal, State or local fire, health, safety or building or construction regulation, law or ordinance with respect to an insured risk which substantially increases any hazard insured against within 60 days of written (12) Failure by the insured to provide reasonable and necessary underwriting information to us upon written request therefor and a reasonable opportunity to respond; (13) Agency termination, provided: (a) We document that replacement coverage at comparable rates and terms has been provided to the first Named insured, and we have informed the first Named Insured, in writing, of the right to continue coverage with us; or (b) We have informed the first Named Insured, in writing, of the right to continue coverage with us and the first Named Insured has agreed, in writing, to the cancellation or nonrenewal based on the termination of the first Named Insured's appointed agent. (14) Any other reasons in accordance with our underwriting guidelines for cancellation of commercial lines coverage. b. If we cancel this policy based on Paragraphs 7.a.(1) or (2) above, we will mail or deliver a written notice, to the first Named Insured and any person entitled to notice under this policy, at least 10 days before the effective date of cancellation. If we cancel this policy for any other reason listed above, we will mail or deliver a written notice to the first Named Insured and any person entitled to notice under this policy, not more than 120 days nor less than 30 days before the effective date of such cancellation. c. In the notice of cancellation which is sent to the first Named Insured, we will state the reason for cancellation. For cancellation due to the nonpayment of premium, the notice will state the effect of nonpayment by the due date. Cancellation for nonpayment of premium will not be effective if payment of the amount due is made before the effective date set forth in the notice. d. Notice will be sent to the last mailing addresses known to us, by: (1) Certified mail; or (2) First class mail, if we have obtained from the post office a date stamped proof of mailing showing names and addresses. D e. We need not send notice of cancellation if you have: (1) Replaced coverage elsewhere; or (2) Specifically requested termination. The following is added and supersedes any other provision to the contrary: NONRENEWAL 1. We may elect not to renew this policy for any reason permitted to cancel it. If we elect not to renew this policy, we will mail a notice of nonrenewal, stating the reasons for nonrenewal, to the first Named Insured at least 30 days but not more than 120 days before the expiration date of this policy. If this policy does not have a fixed expiration date, it shall be deemed to expire annually on the anniversary of its inception. 2. This notice will be sent to the first Named insured at the last mailing address known to us by: a. Certified mail; or b. First class mail, if we have obtained from the post office a date stamped proof of mailing showing the first Named Insured's name and address. 3. We need not mail or deliver this notice if you have: a. Replaced coverage elsewhere; or b. Specifically requested termination. INTERLINE IL 02 69 0702 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NORTH CAROLINA CHANGES - CANCELLATION AND NONRENEWAL This endorsement modifies insurance provided under the following: BOILER AND MACHINERY COVERAGE PART CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL LIABILITY UMBRELLA COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART CRIME AND FIDELITY COVERAGE PART EMPLOYMENT-RELATED PRACTICES LIABILITY COVERAGE PART FARM COVERAGE PART FARM UMBRELLA LIABILITY POLICY LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART A. Paragraph 2. of the Cancellation Common Policy Condition is replaced by the following: 2. Cancellation Requirements a. Policies In Effect Less Than 60 Days If this policy has been in effect for less than 60 days, we may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least: (1) 15 days before the effective date of cancellation if we cancel for nonpayment of premium; or (2) 30 days before the effective date of cancellation if we cancel for any other reason. b. Policies In Effect More Than 60 Days If this policy has been in effect for 60 days or more, or is a renewal of a policy we issued, we may cancel this policy prior to the: (1) Expiration of the policy term; or (2) Anniversary date, stated in the policy only for one or more of the following reasons: (a) Nonpayment of premium; (b) An act or omission by the insured or his or her representative that constitutes material misrepresentation or nondisclosure of a material fact in obtaining this policy, continuing this policy or presenting a claim under this policy; (c) Increased hazard or material change in the risk assumed that could not have been reasonably contemplated by the parties at the time of assumption of the risk; (d) Substantial breach of contractual duties, conditions or warranties that materially affects the insurability of the risk; (e) A fraudulent act against us by the insured or his or her representative that materially affects the insurability of the risk; (f) Willful failure by the insured or his or her representative to institute reasonable loss control measures that materially affect the insurability of the risk after written notice by us; C. d. (g) Loss of facultative reinsurance, or loss of or substantial changes in applicable reinsurance as provided in G.S. 58-41-30; (h) Conviction of the insured of a crime arising out of acts that materially affect the insurability of the risk; (i) A determination by the Commissioner of Insurance that the continuation of the policy would place us in violation of the laws of North Carolina; or (j) You fail to meet the requirements contained in our corporate charter, articles of incorporation or by-laws when we are a company organized for the sole purpose of providing members of an organization with insurance coverage in North Carolina. We will mail or deliver written notice of cancellation to the first Named Insured at least: (i) 15 days before the effective date of cancellation if we cancel for nonp ayment of premium; or (ii) 30 days before the effective date of cancellation if we cancel for any othe r reason. Cancellation for nonpayment of premium will not become effective if you pay the premium amount due before the effective date of cancellation. We may also cancel this policy for any reason not stated above provided we obtain your prior written consent. B. The following provisions are added and supersede any other provisions to the contrary: 1. Nonrenewal a. If we elect not to renew this policy, we will mail or deliver to the first Named Insured shown in the Declarations written notice of nonrenewal at least 45 days prior to the: (1) Expiration of the policy if this policy has been written for one year or less; or (2) Anniversary date of the policy if this policy has been written for more than one year or for an indefinite term. b. We need not mail or deliver the notice of nonrenewal if you have: (1) Insured property covered under this policy, under any other insurance policy; (2) Accepted replacement coverage; or (3) Requested or agreed to nonrenewal of this policy. c. If notice is mailed, proof of mailing will be sufficient proof of notice. 2. The written notice of cancellation or nonrenewal will: a. Be mailed or delivered to the first Named Insured and any designated mortgagee or loss payee at their addresses shown in the policy, or if not indicated in the policy, at their last known addresses; and b. State the reason or reasons for cancellation or nonrenewal. ,? PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 EMPLOYEE BENEFITS LIABILITY ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM BUSINESSOWNERS LIABILITY COVERAGE FORM GARAGE COVERAGE FORM SCHEDULE Limits of Insurance Deductible Each Claim Limit $ 1,000,000 Aggregate Limit $ 3,000,000 $ 1,000 No. of Employees Rate per No. of Advance Minimum Premium Class Code Employees Premium 250 INCL $ INCL $ INCL 96102 (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) INSURING AGREEMENT We will pay under this endorsement those sums that the insured becomes legally obligated to pay as damages because of a claim or "suit" brought by any employee, former employee, or their beneficiaries or legal representatives in connection with any negligent act, error or omission that arises from the "administration" of your "employee benefits" programs. We will have the right and duty to defend any "suit" seeking those damages. But: The amount we will pay for damages is limited as described in the Schedule as Limits of Insurance; We may investigate and settle any claim or "suit" at our discretion; and Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under this endorsement. This insurance applies to acts, errors or omissions which first occur while this endorsement is in effect. WHO IS AN INSURED With respect to this endorsement, the WHO IS AN INSURED section is modified to include employees only while authorized to act in the administration of your "employee benefits" programs. EXCLUSIONS Insurance under this endorsement does not apply to any claim or "suit" arising out of: a. any dishonest, fraudulent, criminal or malicious act; b. any "Bodily Injury", "Property Damage", "Advertising Injury" or "Personal Injury"; c. any claim for failure of performance of contract by any insured; d. any obligation of the insured under a workers' compensation, Social Security or disability benefits, or unemployment compensation or similar law; e. any failure of stock to perform as represented by you; f. any advice given by you to your employees to participate or not to participate in stock subscription plans; g. any claim resulting from the termination of any "employee benefit plan"; or h. any actual or alleged error or omission or breach of duty, committed or alleged to have been committed by a trustee or administrator, in the discharge of fiduciary duties, obligations or responsibilities imposed by the Federal Employee Retirement Income Security Act of 1974 or Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272) or Section 9319 of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509) or any amendments to these Acts. i. any claim or "suit" arising directly or indirectly out of; (1) any actual or alleged failure, malfunction or inadequacy of: a. Any of the following, whether belonging to any insured or to others: (a) Computer hardware, including micro-processors; (b) Computer application software; (c) Computer operating systems and related software; (d) Computer networks; (e) Microprocessors (computer chips) not part of any computer system; or (f) Any other computerized or electronic equipment or components; or (2) Any other products, and any services, data or functions that directly or indirectly use or rely upon, in any manner, any of the items listed in Paragraph i.a.(1) of this endorsement due to the inability to correctly recognize, process, distinguish, interpret or accept the year 2000 and beyond. b. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement or supervision provided or done by you or for you to determine, rectify or test for, any potential or actual problems described in Paragraph i.a. of this endorsement. LIMITS OF INSURANCE The Limits of Insurance shown in the Schedule of this endorsement and the rules below fix the most we will pay regardless of the number of Insureds, claims made or "suits" brought, or persons or organizations making claims or bringing "suits". The Each Claim Limit is the most we will pay for damages arising out of any one claim or "suit". The Aggregate Limit is the most we will pay for the sum of all damages under this endorsement. The Limits of Insurance apply separately to each consecutive annual period and to any remaining period of less than 12 Months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an addition period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for the purposes of determining the Limits of Insurance. DEDUCTIBLE In the event of a claim, the deductible shown in the schedule of this endorsement shall be subtracted from the total amount resulting from each claim. We will pay covered claims over the amount of the deductible, up to the limit of liability. To settle a claim or "suit", we may pay all or part of the deductible. If we do, then you agree to repay us as soon as we notify you of the settlement. ADDITIONAL DEFINITION The following additional definition is added to the DEFINITIONS section: a. "Employee benefits" means group life insurance, group accident or health insurance, profit sharing plans, pension plans, employee stock subscription plans, employee travel, vacation, or savings plans, workers' compensation, unemployment insurance, Social Security and disability benefits insurance, and other similar benefit program. b. "Administration" - the unqualified word "administration" whenever used, shall mean: (1) Giving counsel to employees with respect to employee benefit programs; (2) Interpreting employee benefit programs;\ (3) Handling of records in connection with employee benefit programs; (4) Effecting enrollment of employees under employee benefit programs, provided all such acts are authorized by the named insured. COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. AMENDMENT OF LIQUOR LIABILITY EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Exclusion c. of COVERAGE A (Section 1) is replaced by the following: c. "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1 ) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you: (1) Manufacture, sell or distribute alcoholic beverages; (2) Serve or furnish alcoholic beverages for a charge whether or not such activity: (a) Requires a license; (b) Is for the purpose of financial gain or livelihood; or (3) Serve or furnish alcoholic beverages without a charge, if a license is required for such activity. CG 21 50 09 89 Copyright, Insurance Services Office, Inc., 1988 0 111111110- PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casually Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171052361 THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING: COMMERCIAL GENERAL LIABILITY COVERAGE FORM. COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY COVERAGE B. PERSONAL AND ADVERTISING INJURY LIABILITY COVERAGE C. MEDICAL PAYMENTS EXCLUSION - LEAD CONTAMINATION This insurance does not apply to: 1. "Bodily Injury", "medical payments", "property damage", or "personal and advertising injury" which would not have ocurred in whole or part but for the actual, alleged, or threatened ingestion, inhalation, absorption, dispersal, disposal, seepage, migration, release, or escape of lead in any form at any time. 2. Any loss, cost, or expense arising out of any: a. request, demand, or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize, or in any way respond to or assess the effects of lead; or b. claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing, or in any way responding to, or assessing the effects of lead. PENN NATIONAL ® Aff INSURANCE Pennsylvania National Mutual Casually Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO INSURED - PLEASE READ YOUR POLICY CAREFULLY Your policy contains an exclusion for lead contamination in any form at any time. Refer to endorsement 71-0543, Exclusion - Lead Contamination. COMMERCIAL GENERAL LIABILITY CG 21 47 07 98 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EMPLOYMENT - RELATED PRACTICES EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. The following exclusion is added to Paragraph B. The following exclusion is added to Paragraph 2., Exclusions of Section 1 - Coverage A - 2., Exclusions of Section I - Coverage B - Bodily Injury And Property Damage Liability: Personal And Advertising Injury Liability: This insurance does not apply to: This insurance does not apply to: "Bodily injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or "Personal and advertising injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" to that person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. (2) The spouse, child, parent, brother or sister of that person as a consequence of "personal and advertising injury" to that person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. COMMERCIAL GENERAL LIABILITY CG 21 61 04 98 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION - YEAR 2000 COMPUTER-RELATED AND OTHER ELECTRONIC PROBLEMS - PRODUCTS/COMPLETED OPERATIONS This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART The following exclusion is added to Paragraph 2., (e) Microprocessors (computer chips) Exclusions of Section I - Bodily Injury And not part of any computer system; or Property Damage Liability: (f) Any other computerized or electronic 2. Exclusions equipment or components; or This insurance does not apply to "bodily injury" or "property damage" included in the "products-completed operations hazard" definition and arising directly or indirectly out of: a. Any actual or alleged failure, malfunction or inadequacy of: (1) Any of the following, whether belonging to any insured or to others: (a) Computer hardware, including microprocessors; (b) Computer application software; (c) Computer operating systems and related software; (d) Computer networks; (2) Any other products, and any services, data or functions that directly or indirectly use or rely upon, in any manner, any of the items listed in Paragraph 2.a.(1) of this endorsement due to the inability to correctly recognize, process, distinguish, interpret or accept the year 2000 and beyond. b. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement or supervision provided or done by you or for you to determine, rectify or test for, any potential or actual problems described in Paragraph 2.a. of this endorsement. COMMERCIAL GENERAL LIABILITY CG 21 51 09 89 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. AMENDMENT OF LIQUOR LIABILITY EXCLUSION - EXCEPTION FOR SCHEDULED ACTIVITIES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Description of Activity(ies): NONE (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) Exclusion c. of COVERAGE A (Section 1) is replaced by the following: c. "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you: (1) Manufacture, sell or distribute alcoholic beverages; (2) Serve or furnish alcoholic beverages for a charge whether or not such activity: (a) Requires a license; (b) Is for the purpose of financial gain or livelihood; or (3) Serve or furnish alcoholic beverages without a charge, if a license is required for such activity. However, this exclusion does not apply to "bodily injury" or "property damage" arising out of the selling, serving or furnishing of alcoholic beverages at the specific activity(ies) described above. COMMERCIAL GENERAL LIABILITY CG 21 49 09 99 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. TOTAL POLLUTION EXCLUSION ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Exclusion f. under Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability is replaced by the following: This insurance does not apply to: f. Pollution (1) "Bodily injury" or "property damage" which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time. (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants"; or (b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". M,MY . PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES COVERAGE AND EXCLUSION LIABILITY FOR HAZARDS OF LEAD This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. For premises constructed in or after 1978 or premises constructed prior to 1978 which have been certified, prior to the policy period, as being free of existing lead hazards pursuant to standards established by the Department of Community Affairs, the following is added to exclusion f., Pollution, of paragraph 2., Exclusions, under Section I - Coverage A - Bodily Injury and Property Damage Liability and to any amendment to the pollution exclusion which is added by endorsement to this policy: 2. Exclusions f. Pollution This exclusion does not apply to "bodily injury" arising out of lead contamination, or out of the inhalation, ingestion, use, handling or contact with lead paint at or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to any insured. This provision will also apply to any premises which receives such certification during the policy period, but only if you notify us of such certification within 30 days after the certification is received, and only for "bodily injury" which occurs after such certification. B. For premises constructed prior to 1978 and which have not been certified as being free of existing lead hazards pursuant to standards established by the Department of Community Affairs, and until certified thereafter as described in Paragraph A., the following is added to Paragraph 2., Exclusions of Section - Coverage A - Bodily Injury And Property Damage Liability: This insurance does not apply to: "Bodily injury caused in whole or in part, either directly or indirectly, by lead paint or lead contamination, or arising out of or incidental to the inhalation, ingestion, use, handling, or contact with lead paint or lead contamination. COMMERCIAL GENERAL LIABILITY CG 00 01 1001 COMMERCIAL GENERAL LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy. The words "we", "us" and "our" refer to the company providing this insurance. The word "insured" means any person or organization qualifying as such under Section 11 - Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section V - Definitions. SECTION I - COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as - damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result. But: b. This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; (2) The "bodily injury" or "property damage" occurs during the policy period; and (3) Prior to the policy period, no insured listed under Paragraph 1. of Section II - Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. c. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section 11 - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim, includes any continuation, change or resumption of that "bodily injury" or "property damage" after the end of the policy period. (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. d. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; (2) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or (3) Becomes aware by any other means c. Liquor Liability that "bodily injury" or property "Bodily injury" or "property damage" for damage" has occurred or has begun which any insured may be held liable by to occur. reason of: e. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". 2. Exclusions This insurance does not apply to: a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. b. Contractual Liability "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided: (a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. d. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. e. Employer's Liability "Bodily injury" to: (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: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". f. Pollution (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured. However, this subparagraph does not apply to: (i) "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot from equipment used to heat that building; (ii) "Bodily injury" or "property damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or (iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; (b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; (c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for: (i) Any insured; or (ii) Any person or organization for whom you may be legally responsible; or (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the "pollutants" are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor. However, this subparagraph does not apply to: (i) "Bodily injury" or "property damage" arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic or mechanical functions necessary for the operation of "mobile equipment" or its parts, if such fuels, lubricants or other operating fluids escape from a vehicle part designed to hold, store or receive them. This exception does not apply if the "bodily injury" or "property damage" arises out of the intentional discharge, dispersal or release of the fuels, lubricants or other operating fluids, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent that they be discharged, dispersed or released as part of the operations being performed by such insured, contractor or subcontractor; (ii) "Bodily injury" or "property damage" sustained within a building and caused by the release of gases, fumes or vapors from materials brought into that building in connection with operations being performed by you or on your behalf by a contractor or subcontractor; or (iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire". (e) At or from any premises, site or location on which any insured or any contractors or subsontractors working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants". (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or (b) Claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority. g. Aircraft, Auto Or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading". This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; (2) A watercraft you do not own that is: (a) Less than 26 feet long; and (b) Not being used to carry persons or property for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft; or (5) "Bodily injury" or "property damage" arising out of the operation of any of the equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment". In. Mobile Equipment "Bodily injury" or "property damage" arising out of: (1) The transportation of "mobile equipment" by an "auto" owned or operated by or rented or loaned to any insured; or (2) The use of "mobile equipment" in, or while in practice for, or while being prepared for, any prearranged racing, speed, demolition, or stunting activity. War "Bodily injury" or "property damage" due to war, whether or not declared, or any act or condition incident to war, War includes civil war, insurrection, rebellion or revolution. This exclusion applies only to liability assumed under a contract or agreement. j. Damage To Property "Property damage" to: (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A seperate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". k. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. Damage To Your Work "Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. m. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. n. Recall Of Products, Work Or Impaired Property Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of: (1) "Your product"; (2) "Your work"; or (3) "Impaired property"; if such product, work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. o. Personal And Advertising Injury "Bodily injury" arising out of "personal and advertising injury". Exclusions c. through n. do not apply to damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to this coverage as described in Section III - Limits Of Insurance. COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. b. This insurance applies to "personal and advertising injury" caused by an offense arising out of your business but only if the offense was committed in the "coverage territory" during the policy period. 2. Exclusions This insurance does not apply to: a. Knowing Violation Of Rights Of Another "Personal and advertising injury" caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict "personal and advertising injury". b. Material Published With Knowledge Of Falsity "Personal and advertising injury" arising out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity. c. Material Published Prior To Policy Period "Personal and advertising injury" arising out of oral or written publication of material whose first publication took place before the beginning of the policy period. d. Criminal Acts "Personal and advertising injury" arising out of a criminal act committed by or at the direction of the insured. e. Contractual Liability "Personal and advertising injury" for which the insured has assumed liability in a contract or agreement. This exclusion does not apply to liability for damages that the insured would have in the absence of the contract or agreement. f. Breach Of Contract "Personal and advertising injury" arising out of a breach of contract, except an implied contract to use another's advertising idea in your "advertisement". g. Quality Or Performance Of Goods - Failure To Conform To Statements "Personal and advertising injury" arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your "advertisement". h. Wrong Description Of Prices "Personal and advertising injury" arising out of the wrong description of the price of goods, products or services stated in your I. Infringement Of Copyright, Patent, Trademark Or Trade Secret "Personal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. However, this exclusion does not apply to infringement, in your "advertisement", of copyright, trade dress or slogan. j. Insureds In Media And Internet Type Businesses "Personal and advertising injury" committed by an insured whose business is: (1) Advertising, broadcasting, publishing or telecasting; (2) Designing or determining content of websites for others; or (3) An Internet search, access, content or service provider. However, this exclusion does not apply to Paragraphs 14.a., b. and c. of "personal and advertising injury" under the Definitions Section. For the purposes of this exclusion, the placing of frames, borders or links, or advertising, for you or others anywhere on the Internet, is not by itself, considered the business of advertising, broadcasting, publishing or telecasting. k. Electronic Chatrooms Or Bulletin Boards "Personal and advertising injury" arising out of an electronic chatroom or bulletin board the insured hosts, owns, or over which the insured exercises control. 1. Unauthorized Use Of Another's Name Or Product "Personal and advertising injury" arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatag, or any other similar tactics to mislead another's potential customers. m. Pollution "Personal and advertising injury" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time. n. Pollution-Related Any loss, cost or expense arising out of any: (1) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of , "pollutants"; or (2) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". COVERAGE C MEDICAL PAYMENTS 1. Insuring Agreement a. We will pay medical expenses as described below for "bodily injury" caused by an accident: (1) On premises you own or rent; (2) On ways next to premises you own or rent; or (3) Because of your operations; provided that: (1) The accident takes place in the "coverage territory" and during the policy period; (2) The expenses are incurred and reported to us within one year of the date of the accident; and (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require. b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) First aid administered at the time of an accident; (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services. 2. Exclusions We will not pay expenses for "bodily injury": a. Any insured To any insured, except "volunteer workers". b. Hired Person To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. Injury On Normally Occupied Premises To a person injured on that part of premises you own or rent that the person normally occupies. d. Workers Compensation And Similar Laws To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law. e. Athletics Activities To a person injured while taking part in athletics. f. Products-Completed Operations Hazard Included within the "products-completed operations hazard". g. Coverage A Exclusions Excluded under Coverage A. h. War Due to war, whether or not declared, or any act or condition incident to war. War includes civil war, insurrection, rebellion or revolution. SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 1. We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: a. All expenses we incur. b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. c. The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work. e. All costs taxed against the insured in the "suit". f. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. g. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. These payments will not reduce the limits of insurance. 2. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: a. The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; b. This insurance applies to such liability assumed by the insured; c. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; d. The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee; e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and f. The indemnitee: (1) Agrees in writing to: (a) Cooperate with us in the investigation, settlement or defense of the "suit"; (b) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (c) Notify any other insurer whose coverage is available to the indemnitee; and (d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (2) Provides us with written authorization to: (a) Obtain records and other information related to the "suit"; and (b) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b.(2) of Section I - Coverage A - Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the limits of insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met. SECTION II - WHO IS AN INSURED 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees. 2. Each of the following is also an insured: a. Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co-"employee" or "volunteer worker" as a consequence of Paragraph (1)(a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1)(a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. (2) "Property damage" to property: (a) Owned, occupied or used by, (b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", "volunteer workers", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company). b. Any person (other than your "employee" or "volunteer worker"), or any organization while acting as your real c. Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property; and (2) Until your legal representative has been appointed. d. Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this Coverage Part. 3. With respect to "mobile equipment" registered in your name under any motor vehicle registration law, any person is an insured while driving such equipment along a public highway with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the equipment, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-"employee" of the person driving the equipment; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 4. Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain ownership or majority interest, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the 90th day after you acquire or form the organization or the end of the policy period, whichever is earlier; b. Coverage A does not apply to "bodily injury" or "property damage" that occurred before you acquired or formed the organization; and c. Coverage B does not apply to "personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. SECTION III - LIMITS OF INSURANCE 1. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. The General Aggregate Limit is the most we will pay for the sum of: a. Medical expenses under Coverage C; b. Damages under Coverage A, except damages because of "bodily injury" or "property damage" included in the "products-completed operations hazard"; and c. Damages under Coverage B. 3. The Products-Completed Operations Aggregate Limit is the most we will pay under Coverage A for damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard". 4. Subject to 2. above, the Personal and Advertising Injury Limit is the most we will pay under Coverage B for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization. 5. Subject to 2. or 3. above, whichever applies, the Each Occurrence Limit is the most we will pay for the sum of: a. Damages under Coverage A; and b. Medical expenses under Coverage C because of all "bodily injury" and "property damage" arising out of any one "occurrence". 6. Subject to 5. above, the Damage To Premises Rented To You Limit is the most we will pay under Coverage A for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, while rented to you or temporarily occupied by you with permission of the owner. 7. Subject to 5. above, the Medical Expense Limit is the most we will pay under Coverage C for all medical expenses because of "bodily injury" sustained by any one person. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. If a claim is made or "suit" is brought against any insured, you must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You must see to it that we receive written notice of the claim or "suit" as soon as practicable. c. You and any other involved insured must: (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and K) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply. d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. 3. Legal Action Against Us No person or organization has a right under this Coverage Part: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Part unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 4. Other Insurance If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over: (1) Any of the other insurance, whether primary, excess, contingent or on any other basis: (a) That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (b) That is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner; (c) That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; or (d) If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section - Coverage A - Bodily Injury And Property Damage Liability. (2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement. When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and (2) The total of all deductible and self-insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method of Sharing If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 5. Premium Audit a. We will compute all premiums for this Coverage Part in accordance with our rules and rates. b. Premium shown in this Coverage Part as advance premium is a deposit premium only. At the close of each audit period we will compute the earned premium for that period and send notice to the first Named Insured. The due date for audit and retrospective premiums is the date shown as the due date on the bill. If the sum of the advance and audit premiums paid for the policy period is greater than the earned premium, we will return the excess to the first Named Insured. c. The first Named Insured must keep records of the information we need for premium computation, and send us copies at such times as we may request. 6. Representations By accepting this policy, you agree: a. The statements in the Declarations are accurate and complete; b. Those statements are based upon representations you made to us; and c. We have issued this policy in reliance upon your representations. 7. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom claim is made or "suit" is brought. 8. Transfer Of Rights Of Recovery Against Others To Us If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. 9. When We Do Not Renew If we decide not to renew this Coverage Part, we will mail or deliver to the first Named Insured shown in the Declarations written notice of the nonrenewal not less than 30 days before the expiration date. If notice is mailed, proof of mailing will be sufficient proof of notice. SECTION V - DEFINITIONS 1. "Advertisement" means a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters. For the purposes of this definition: a. Notices that are published include material placed on the Internet or on similar electronic means of communication; and b. Regarding web-sites, only that part of a web-site that is about your goods, products or services for the purposes of attracting customers or supporters is considered an advertisement. 2. "Auto" means a land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment". 3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. 4. "Coverage territory" means: a. The United States of America (including its territories and possessions), Puerto Rico and Canada; b. International waters or airspace, but only if the injury or damage occurs in the course of travel or transportation between any places included in a. above; or c. All other parts of the world if the injury or damage arises out of: (1) Goods or products made or sold by you in the territory described in a. above; (2) The activities of a person whose home is in the territory described in a. above, but is away for a short time on your business; or (3) "Personal and advertising injury" offenses that take place through the Internet or similar electronic means of communication provided the insured's responsibility to pay damages is determined in a "suit" on the merits, in the territory described in a. above or in a settlement we agree to. 5. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker". 6. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document. 7. "Hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 8. "Impaired property" means tangible property, other than "your product" or "your work", that cannot be used or is less useful because: a. It incorporates "your product" or "your work" that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of "your product" or "your work"; or b. Your fulfilling the terms of the contract or agreement. 9. "Insured contract" means: a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner is not an "insured contract": b. A sidetrack agreement; c. Any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad; d. An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; e. An elevator maintenance agreement; f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. Paragraph f. does not include that part of any contract or agreement: (1) That indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or crossing; (2) That indemnifies an architect, engineer or surveyor for injury or damage arising out of: (a) Preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (3) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of the insured's rendering or failure to render professional services, including those listed in (2) above and supervisory, inspection, architectural or engineering activities. 10. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker". 11. "Loading or unloading" means the handling of property: a. After it is moved from the place where it is accepted for movement into or onto an aircraft, watercraft or "auto"; b. While it is in or on an aircraft, watercraft or "auto"; or c. While it is being moved from an aircraft, watercraft or "auto" to the place where it is finally delivered; but "loading or unloading" does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or "auto". 12. "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment: a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; b. Vehicles maintained for use solely on or next to premises you own or rent; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted: (1) Power cranes, shovels, loaders, diggers or drills; or (2) Road construction or resurfacing equipment such as graders, scrapers or rollers; e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: (1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) Cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": (1) Equipment designed primarily for: (a) Snow removal; (b) Road maintenance, but not construction or resurfacing; or (c) Street cleaning; (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 14. "Personal and advertising injury" means injury, including consequential "bodily injury", arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f• The use of another's advertising idea in your "advertisement"; or 9• Infringing upon another's copyright, trade dress or slogan in your "advertisement". 15. "Pollutants" mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 16. "Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; (2) The existence of tools, uninstalled equipment or abandoned or unused materials; or (3) Products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products- completed operations are subject to the General Aggregate Limit. 17. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 18. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 19. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. 20. "Volunteer worker" means a person who is not your "employee", and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you. 21. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such. goods or products. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product"; and (2) The providing of or failure to provide warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 22. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations, b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171055-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXTENDED COVERAGE ENDORSEMENT GENERAL LIABILITY This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM 1. Amendment - Aggregate Limits of Insurance IV. Broad Form Named Insured The General Aggregate Limit under the LIMITS OF INSURANCE (Section III) applies separately to each of your: a. Projects away from premises owned by or rented to you; b. "Locations" owned by or rented to you. "Location" means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway, waterway or right-of-way of a railroad. Bodily Injury Redefined The definition of "bodily injury" in DEFINITIONS (Section V) is replaced by the following: "Bodily injury" means bodily injury, sickness or disease sustained by a person including mental anguish or death resulting from any of these. 111. Mobile Equipment Redefined Paragraph 12.f. subparagraph (1) of DEFINITIONS (Section V) does not apply to self-propelled vehicles of less than 1000 pounds gross vehicle weight. a. WHO IS AN INSURED (Section II) is amended to include as an insured any organization or subsidiary thereof, other than a partnership, joint venture, or limited liability corporation, which is a legally incorporated entity of which you own a financial interest of more than 50 percent of the voting stock on the effective date of this endorsement. b. Paragraph IV.a. does not apply to injury or damage with respect to which an insured under this policy is also an insured under another policy or would be an insured under such policy but for its termination or upon the exhaustion of its limits of insurance. c. Paragraph IV.b, does not apply to a policy written to apply specifically in excess of this policy. V. Newly Formed or Acquired Organizations In paragraph 4.a. of WHO IS AN INSURED (Section 11), 90th day is changed to 180th day. VI. Incidental Malpractice Liability - Nurse, EMT, or Paramedic Paragraph 2.a.(1)(d) of WHO IS AN INSURED (Section 11) is deleted and replaced by: Arising out of his or her providing or failing to provide professional health care services. However, if you have "employees" who are a nurse, emergency medical technician or paramedic, they are an insured with respect to their providing or failing to provide professional health care services to your "employees". VII. Duties in the Event of Occurrence, Claim or Suit Redefined a. The requirement in Condition 2.a. of CONDITIONS (Section IV) that you must see to it that we are notified of an "occurrence" only applies when the "occurrence" or offense is known to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An officer of the corporation or insurance manager, if you are a corporation. b. The requirement in Condition 2.b. of CONDITIONS (Section IV) that you must see to it that we receive notice of a claim or "suit" will not be considered breached unless the breach occurs after such claim or "suit" is know to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An officer of the corporation or insurance manager, if you are a corporation. VIII. Unintentional Errors or Omissions We will not deny coverage under this Coverage Part because of the unintentional omission of, or unintentional error in, any information provided by you. However, this provision does not affect our right to collect additional premium or exercise our right of cancellation or non-renewal. IX. Non-Owned Watercraft a. Exclusion g. Paragraph (2) of COVERAGE A (Section 1) is deleted and replaced by the following: (2) A watercraft you do not own that is: (a) Less than 51 feet long; and (b) Not being used to carry persons or property for a charge; b. Paragraph IX.a. above applies to any person who, with your expressed or implied consent, either uses or is responsible for the use of a watercraft. c. Paragraphs IX.a. and IX.b. above do not apply if the insured has any other insurance for "bodily injury" or "property damage" liability that would also apply to loss covered under this provision, whether the other insurance is primary, excess, contingent or on any other basis. In that case, this Provision IX does not provide any insurance. d. Paragraph IX.c. above does not apply to a policy written to apply specifically in excess of this policy. X. Supplementary Payments Increased Limits In the SUPPLEMENTARY PAYMENTS - COVERAGE A and B (Section 1) provision: a. The limit for the cost of bail bonds is changed from $250 to $2000. PENN NATIONAL INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171052361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) PENNSYLVANIA In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury", "personal and advertising injury" or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. This coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above. PENN NAT{ONAL ® INSURANCE Pennsylvania National Mutual casually Insurance Company Penn National Security Insurance Company P.O.6ox 2361 Harrisburg, PA 17105-2361 NOTICE TO INSURED - PLEASE READ YOUR POLICY CAREFULLY This notice applies to insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM Your policy has been changed. The definition of "property damage" in your policy has been revised. Electronic data is not considered tangible property, therefore, there is no coverage for its loss nor any loss of use relating to the loss of data. Please refer to the definition of "property damage" contained in your policy (Form - CG 0001 10/01, Page 15 of 16) for further clarification. Your policy has been changed to exclude coverage for "personal and advertising injury" for web site designers, internet search, access and service providers (with an exception for the mere placing of links, frames or borders), electronic chat rooms or bulletin boards, and unauthorized use of another's name or product in your e-mail address, domain name or metatag or any other similar tactics to mislead another's potential customers. Please refer to Coverage B-Personal and Advertising Injury Liability (Form CG0001 10/01, page 5 of 16 to 7 of 16). Your policy has been changed to clarify that expenses incurred for repairs made on the insured's own property for any reason, including to avoid injury to a third party, will not be covered. Refer to your policy (Form CG 0001 10/01, page 4 of 16, paragraph J(1) - Damage to Property) for further clarification. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 171052361 NOTICE TO POLICYHOLDERS-CERTAIN COVERAGE IN THIS POLICY HAS BEEN ELIMINATED OR REDUCED This notice applies to Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Please read your policy, and the endorsements attached to your policy, carefully. 710188 0103 (PA); 710189 0103(NC);710948 0103- ASBESTOS ENDORSEMENT (EXCLUSION) When any combination of these endorsements (exclusions) are attached to your policy: Coverage will not apply for any liability arising out of the inhalation, ingestion, prolonged physical exposure, use, removal, manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. No coverage is provided by this policyholder notice nor can it be construed to replace any provisions of your policy. You should read your policy and review your declarations page for complete information on the coverages you are provided. If there is any conflict between the policy and this notice, the provisions of the policy shall prevail. COMMERCIAL GENERAL LIABILITY CG 21 67 0402 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. FUNGI OR BACTERIA EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. The following exclusion is added to Paragraph 2., B. The following exclusion is added to Paragraph Exclusions of Section I - Coverage A - Bodily 2., Exclusions of Section 1 - Coverage B - Injury And Property Damage Liability: Personal And Advertising Injury Liability: 2. Exclusions This insurance does not apply to: Fungi or Bacteria 2. Exclusions This insurance does not apply to: Fungi or Bacteria a. "Bodily injury" or "property damage" a. "Personal and advertising injury" which which would not have occurred, in whole would not have taken place, in whole or or in part, but for the actual, alleged or in part, but for the actual, alleged or threatened inhalation of, ingestion of, threatened inhalation of, ingestion of, contact with, exposure to, existence of, or contact with, exposure to, existence of, presence of, any "fungi" or bacteria on or or presence of any "fungi" or bacteria within a building or structure, including its on or within a building or structure, contents, regardless of whether any other including its contents, regardless of cause, event, material or product whether any other cause, event, contributed concurrently or in any material or product contributed sequence to such injury or damage, concurrently or in any sequence to such b. Any loss, cost or expenses arising out of injury. the abating, testing for, monitoring, b. Any loss, cost or expense arising out of cleaning up, removing, containing, the abating, testing for, monitoring, treating, detoxifying, neutralizing, cleaning up, removing, containing, remediating or disposing of, or in any way treating, detoxifying, neutralizing, responding to, or assessing the effects of remediating or disposing of, or in any "fungi" or bacteria, by any insured or by way responding to, or assessing the any other person or entity. effects of, "fungi" or bacteria, by any This exclusion does not apply to any "fungi" insured or by any other person or entity. or bacteria that are, are on, or are contained C. The following definition is added to the in, a good or product intended for Definitions Section: consumption. "Fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or byproducts produced or released by fungi. PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury," "personal and advertising injury," or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos. The coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above. COMMERCIAL GENERAL LIABILITY CG 26 20 10 93 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NEW JERSEY CHANGES - LOSS INFORMATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ("OCCURRENCE" VERSION) The following Condition is added TO COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): 10. Your Right to Loss Information We will provide the first Named Insured shown in the Declarations the following loss information relating to this and any preceding general liability Coverage Part we have issued to you during the previous three years: a. A list or other record of each "occurrence" of which we were notified in accordance with paragraph 2.a. of the Duties in the Event of Occurrence, Offense, Claim or Suit Condition in this Section. We will include a brief description of the "occurrence" and information on whether any claim arising out of the "occurrence" is open or closed. b. A summary by policy year, of payments made and amounts reserved, stated separately under any applicable General Aggregate Limit and Products-Completed Operations Aggregate Limit. Amounts reserved are based on our judgment. They are subject to change and should not be regarded as ultimate settlement values. You must not disclose this information to any claimant or any claimant's representative without our consent. We will provide this information only if we receive a written request from the first Named Insured during the policy period. We will provide this information within 45 days of receipt of the request. We compile claim and "occurrence" information for our own business purposes and exercise reasonable care in doing so. In providing this information to the first Named Insured, we make no representations or warranties to insureds, insurers or others to whom this information is furnished by or on behalf of any insured. W-M ? PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ASBESTOS ENDORSEMENT (EXCLUSION) NORTH CAROLINA In consideration of the premium paid and notwithstanding anything contained in this policy to the contrary, it is agreed as follows: The coverage afforded by this policy does not apply to "bodily injury", "personal and advertising injury" or "property damage" arising out of: 1) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or products containing asbestos; or 2) The use of asbestos in constructing or manufacturing any good, product or structure; or 3) The removal of asbestos from any good, product or structure; or 4) The manufacture, transportation, storage or disposal of asbestos or goods or products containing asbestos, This coverage afforded by the policy does not apply to payment for the investigation or defense of any loss, injury or damage or any cost, fine or penalty or for any expense or claim or suit related to any of the above, COMMERCIAL GENERAL LIABILITY CG 21 70 1102 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY With respect to any one or more "certified acts of terrorism", we will not pay any amounts for which we are not responsible under the terms of the federal Terrorism Risk Insurance Act of 2002 (including subsequent acts of Congress pursuant to the Act) due to the application of any clause which results in a cap on our liability for payments for terrorism losses. "Certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism pursuant to the federal Terrorism Risk Insurance Act of 2002. The federal Terrorism Risk Insurance Act of 2002 sets forth the following criteria for a "certified act of terrorism": 1. The act resulted in aggregate losses in excess of $5 million; and 2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. COMMERCIAL GENERAL LIABILITY CG 00 62 1202 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAR LIABILITY EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. Exclusion i. under Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability is replaced by the following: 2. Exclusions This insurance does not apply to: i. War "Bodily injury" or "property damage", however caused, arising, directly or indirectly, out of: (1) War, including undeclared or civil war; or (2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or (3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these. B. The following exclusion is added to Paragraph 2., Exclusions of Section I - Coverage B - Personal And Advertising Injury Liability: 2. Exclusions This insurance does not apply to: WAR "Personal and advertising injury", however caused, arising, directly or indirectly, out of: a. War, including undeclared or civil war; or b. Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or c. Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these. C. Exclusion h. under Paragraph 2., Exclusions of Section I - Coverage C - Medical Payments does not apply. Medical payments due to war are now subject to Exclusion g, of Paragraph 2., Exclusions of Section I - Coverage C - Medical Payments since "bodily injury" arising out of war is now excluded under Coverage A. COMMERCIAL GENERAL LIABILITY CG 21 76 1102 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION OF PUNITIVE DAMAGES RELATED TO A CERTIFIED ACT OF TERRORISM This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY A. The following exclusion is added: This insurance does not apply to: TERRORISM PUNITIVE DAMAGES Damages arising, directly or indirectly, out of a "certified act of terrorism" that are awarded as punitive damages. B. The following definition is added: "Certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism pursuant to the federal Terrorism Risk Insurance Act of 2002. The federal Terrorism Risk Insurance Act of 2002 sets forth the following criteria for a "certified act of terrorism": 1. The act resulted in aggregate losses in excess of $5 million; and 2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. COMMERCIAL GENERAL LIABILITY CG 20 26 11 85 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person or Organization: (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. AN PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casualty Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 NOTICE TO POLICYHOLDERS POTENTIAL RESTRICTIONS OF TERRORISM COVERAGE (General Liability and Commercial Umbrella) This Notice has been prepared in conjunction with the POTENTIAL implementation of changes related to coverage of terrorism under your policy. The Terrorism Risk Insurance Act of 2002 established a program (Terrorism Risk Insurance Program) within the Department of the Treasury, under which the federal government shares, with the insurance industry, the risk of loss from future terrorist attacks. That Program will terminate at the end of December 31, 2005 unless extended by the federal government. Your policy will become effective (or will be renewed) while the federal Program is still in effect, but prior to a decision by the federal government on extension of the federal Program. If the federal Program terminates, or is extended with certain changes, during the term of your policy, then the treatment of terrorism under your policy will change. This Notice is being provided to you for the purpose of summarizing potential impact on your coverage. The summary is a brief synopsis of significant exclusionary provisions and limitations. This Notice does not form a part of your insurance contract. The Notice is designed to alert you to coverage restrictions and to other provisions in certain terrorism endorsement(s) in this policy. If there is any conflict between this Notice and the policy (including its endorsements), the provisions of the policy (including its endorsements) apply. Carefully read your policy, including the endorsements attached to your policy. YOUR POLICY AT START OF NEW POLICY TERM If endorsement CG 21 70 or 71 1156 is attached to your policy and endorsement 71 1080 or 71 1073 is not attached to your policy This policy does not contain a terrorism exclusion. However, the policy contains an endorsement under which coverage for "certified acts of terrorism" (which is more fully defined in the endorsement but involves acts of terrorism by or on behalf of a foreign interest) is subject to a limit on our liability pursuant to the federal Terrorism Risk Insurance Act of 2002. Further, the absence of a terrorism exclusion does not create coverage for any loss that would otherwise be excluded under the policy, such as losses excluded by the nuclear hazard or war exclusions. If endorsements CG 21 70 and 71 1080 are both attached to your policy or endorsements 71 1 156 and 71 1073 are both attached to your policy This policy contains endorsements that make a distinction between "certified acts of terrorism" and "other acts of terrorism". Coverage is provided for "certified acts of terrorism" (which is more fully defined in the endorsements, but involves acts of terrorism by or on behalf of a foreign interest). This coverage is subject to a limit on our liability pursuant to the federal Terrorism Risk Insurance Act of 2002. Coverage for "other acts of terrorism" (terrorist acts other than certified acts) is excluded but such exclusion applies only if: (1) Aggregate losses from the event exceed $25 million; or (2) Fifty or more persons sustain death or physical injury; or (3) If the event qualified as a nuclear event; or (4) If the event qualified under certain circumstances as a biological or chemical event. With respect to "certified acts of terrorism" and "other acts of terrorism", policy exclusions (for example, the war liability exclusion) and other policy provisions continue to apply. POTENTIAL CHANGE DURING THE TERM OF YOUR POLICY: Endorsement CG 21 87 or 71 1156 is attached to your policy. Its provisions will become applicable to your policy only if certain events (one or more of them) occur. Those events include the following: • If the federal Terrorism Risk Insurance Program (TRIP) terminates with respect to the type of insurance provided under this policy. (TRIP is scheduled to terminate at the end of December 31, 2005 unless extended by the federal government.); or • If TRIP is extended with changes that redefine terrorism, and we are not required to make such revised coverage available to you; or • If TRIP is extended with changes that make insurance coverage for terrorism subject to provisions or requirements that differ from those that apply to other events or occurrences under this policy, and we are not required to make such revised coverage available to you; or • If TRIP is extended with changes that increase insurers' statutory percentage deductible under TRIP for terrorism losses, or decrease the federal government's statutory percentage share in potential terrrorism losses, and we are not required to make terrorism coverage available to you. Our deductible in 2004 is 10% of the total of our previous year's direct earned premiums. In 2005, that figure is 15%. The government's share is 90% of the terrorism losses paid by us above the deductible. Endorsement CG 21 87 or 71 1 156 treats terrorism as follows: • Coverage for loss or damage arising out of a terrorism incident is excluded only if: • The total of all insured damage to all types of property (including business interrruption losses sustained by owners or occupants of damaged property), from the incident, exceeds $25 million. The $25 million property damage threshold is based on losses sustained by all persons and entities who are affected by an incident of terrorism, and who are insured for the damage, or who would be insured but for a terrorism exclusion; or • Fifty or more persons sustain death or serious physical injury; or (To determine whether the threshold for property damage ($25) and persons injured (fifty) is exceeded, multiple incidents of terrorism which occur within a seventy-two hour period and appear to be linked together or have a related purpose or common leadership behind them shall be considered to be one incident of terrorism.) • The terrorism event involves nuclear materials or results in nuclear reaction or radiation or radioactive contamination; or • The terrorism event involves the release of radioactive material, and it appears that one purpose of the terrorism was to release such material; or • The terrorism event is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or • The terrorism event involves the release of pathogenic or poisonous biological or chemical materials, and it appears that one purpose of the terrorism was to release such materials. See the definition of terrorism for purposes of terrorism exclusions. COMMERCIAL GENERAL LIABILITY CG 21 87 0504 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CONDITIONAL EXCLUSION OF TERRORISM (RELATING TO DISPOSITION OF FEDERAL TERRORISM RISK INSURANCE ACT OF 2002) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY A. Applicability Of The Provisions Of This Endorsement 1. The provisions of this endorsement will become applicable commencing on the date when any one or more of the following first occurs: a. The federal Terrorism Risk Insurance Program ("Program"), established by the Terrorism Risk Insurance Act of 2002, has terminated with respect to the type of insurance provided under this Coverage Part or Policy; or b. A renewal, extension or continuation of the Program has become effective without a requirement to make terrorism coverage available to you and with revisions that: (1)Increase our statutory percentage deductible under the Program for terrorism losses. (That deductible determines the amount of all certified terrorism losses we must pay in a calendar year, before the federal government shares in subsequent payment of certified terrorism losses.); or The Program is scheduled to terminate at the end of December 31, 2005 unless renewed, extended or otherwise continued by the federal government. 2. If the provisions of this endorsement become applicable, such provisions: a. Supersede any terrorism endorsement already endorsed to this policy that addresses "certified acts of terrorism" and/or "other acts of terrorism", but only with respect to an incident(s) of terrorism (however defined) which results in injury or damage that occurs on or after the date when the provisions of this endorsement become applicable (for claims made policies, such an endorsement is superseded only with respect to an incident of terrorism (however defined) that results in a claim for injury or damage first being made on or after the date when the provisions of this endorsement become applicable); and b. Remain applicable unless we notify you of changes in these provisions, in response to federal law. (2) Decrease the federal government's 3. If the provisions of this endorsement do statutory percentage share in NOT become applicable, any terrorism potential terrorism losses above such endorsement already endorsed to this deductible; or policy, that addresses "certified acts of terrorism" and/or "other acts of terrorism", (3) Redefine terrorism or make insurance will continue in effect unless we notify you coverage for terrorism subject to of changes to that endorsement in response provisions or requirements that differ to federal law. from those that apply to other types of events or occurences under this policy. B. The following definitions are added and apply under this endorsement wherever the term terrorism, or the phrase any injury or damage, are enclosed in quotation marks: 1. "Terrorism" means activities against persons, organizations or property of any nature: a. That involve the following or preparation for the following: (1) Use or threat of force or violence; or (2) Commission or threat of a dangerous act; or (3) Commission or threat of an act that interferes with or disrupts an electronic, communication, information, or mechanical system; and b. When one or both of the following applies (1) The effect is to intimidate or coerce a government or the civilian population or any segment thereof, or to disrupt any segment of the economy; or (2) It appears that the intent is to intimidate or coerce a government, or to further political, ideological, religious, social or economic objectives or to express (or express opposition to) a philosophy or ideology. 2. "Any injury or damage" means any injury or damage covered under any Coverage Part or Policy to which this endorsement is applicable, and includes but is not limited to "bodily injury", "property damage", "personal and advertising injury", "injury" or "environmental damage" as may be defined in any applicable Coverage Part or Policy. C. The following exclusion is added: EXCLUSION OF TERRORISM We will not pay for "any injury or damage" caused directly or indirectly by "terrorism", including action in hindering or defending against an actual or expected incident of "terrorism". "Any injury or damage" is excluded regardless of any other cause or event that contributes concurrently or in any sequence to such injury or damage. But this exclusion applies only when one or more of the following are attributed to an incident of "terrorism": The "terrorism" is carried out by means of the dispersal or application of radioactive material, or through the use of a nuclear weapon or device that involves or produces a nuclear reaction, nuclear radiation or radioactive contamination; or 2. Radioactive material is released, and it appears that one purpose of the "terrorism" was to release such material; or 3.The "terrorism" is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or 4. Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the "terrorism" was to release such materials; or 5.The total of insured damage to all types of property exceeds $25,000,000. In determining whether the $25,000,000 threshold is exceeded, we will include all insured damage sustained by property of all persons and entities affected by the "terrorism" and business interruption losses sustained by owners or occupants of the damaged property. For the purpose of this provision, insured damage means damage that is covered by any insurance plus damage that would be covered by any insurance but for the application of any terrorism exclusions; or 6. Fifty or more persons sustain death or serious physical injury. For the purpose of this provision, serious physical injury means: a. Physical injury that involves a substantial risk of death; or b. Protracted and obvious physical disfigurement; or c. Protracted loss of or impairment of the function of a bodily member or organ. Multiple incidents of "terrorism" which occur within a 72-hour period appear to be carried out in concert or to have a related purpose or common leadership will be deemed to be one incident, for the purpose of determining whether the thresholds in Paragraphs C.5. or C.6. are exceeded. With respect to this Exclusion, Paragraphs C.5. and C.6. describe the threshold used to measure the magnitude of an incident of "terrorism" and the circumstances in which the threshold will apply, for the purpose of determining whether this Exclusion will apply to that incident. When the Exclusion applies to an incident of "terrorism", there is no coverage under this Coverage Part or Policy. In the event of any incident of "terrorism" that is not subject to this Exclusion, coverage does not apply to "any injury or damage" that is otherwise excluded under this Coverage Part or Policy. W PENN NATIONAL ® INSURANCE Pennsylvania National Mutual Casually Insurance Company Penn National Security Insurance Company P.O. Box 2361 Harrisburg, PA 17105-2361 THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY PRODUCTS-COMPLETED OPERATIONS REDEFINED This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. SECTION III - LIMITS OF INSURANCE, Paragraph 3., is deleted and replaced by the following: 3. The Products-Completed Operations Aggregate Limit is the most we will pay under Coverage A for damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard". This limit does not apply to products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products-completed operations are subject to the General Aggregate Limit. B. SECTION V - DEFINITIONS, Paragraph 16. "Products-completed operations hazard":, Subparagraph b. is deleted and replaced by the following: b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2) The existence of tools, uninstalled equipment or abandoned or unused materials. PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: JAN. 01, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. GENERAL LIABILITY FORMS: CG2028 07/04 FORM NO. FORMSINV 1/86 ISSUED 03/10/05 PENN NATIONAL COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS e INSURANCE R.myl•uiWi.Ml M.wd Caud17 x.w.«. Coapuq ENDORSEMENT NUMBER 01 EFFECTIVE DATE 01/01/05 {'n Nwo.r S.m.1y Mwlenu Caxpesy P.O. Bu. 2701 .F.M b.m. PA 17105-2351 NON-ASSESSABLE POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01101/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000008 06 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below: PREMISES NO. 1 : 415 W MARKET ST MIDDLEBURG SNYDER CO PA 17842 THE FOLLOWING ADDITIONAL INSURED IS ADDED: ADDITIONAL INTERESTS THE FOLLOWING GENERAL LIABILITY FORMS ARE: ADDED: CG2028 07/04 ADDITIONAL NEW ANNUAL PREMIUM: $130,386.00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $50.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: 100.0% SIGNATURE OF AUTHORIZED REPRESENTATIVE POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 LEXINGTON CAPITAL CORP IASOA C/O AMERICAN LEASE INS 654 AMHERST RD STE 301 SUNDERLAND MA 01375 LESSOR OF LEASED EQUIPMENT SEE C62028 THE FOLLOWING IS ADDED: PREMISES NO.: 1 PNC LEASING LLC TWO PNC PLAZA 13TH FLR PITTSBURGH PA 15322 LESSOR OF LEASED EQUIPMENT SEE CG2028 COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Or anization(s) PNC LEASING, LLC TWO PNC PLAZA, 13TH FLR PITTSBURGH PA 15322 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization (s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Or anization(s) LEXINGTON CAPITAL CORP IT'S ASSIGNS AND/OR ASSIGNEES C/O AMERICAN LEASE INSURANCE 654 AMHERST RD, STE 301 SUNDERLAND MA 01375 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization (s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: APR. 20, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. ** NO FORMS GENERATED ** FORM NO. FORMSINV 1/86 ISSUED 05/12/05 PENN NATIONAL POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT r INSURANCE P....p.ui. N.k_I MuWd Cu"Ity wunn.. Compup ENDORSEMENT NUMBER 02 EFFECTIVE DATE 04/20/05 P..n ?WM.M s.c.Mr r.wma c.mp..r P.O. B.. 2301 -He mbug. PA 171053951 NON-ASSESSABLE POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 0000008 06 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below. THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 RICHMOND AMERICAN HOMES OF VENDORS MARYLAND INC 6200 OLD DOBBIN LANE 0119 SEE CG2015 COLUMBIA MD 21046 ADDITIONAL NEW ANNUAL PREMIUM: $130,353-00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $0.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: 70.14 SIGNATURE OF AUTHORIZED REPRESENTATIVE PA NATIONAL MUTUAL CAS INS CO COMMERCIAL GENERAL LIABILITY POLICY FORMS INVENTORY POLICY NUMBER GL9 0103079 03 RENEWAL OF GL9 0103079 02 AMENDMENT OF POLICY EFFECTIVE: MAY 20, 2005 NAMED INSURED: APEX HOMES INC AND/OR POLICY PERIOD: 01/01/05 TO 01/01/06 THE FOLLOWING FORMS HAVE BEEN ADDED TO THE POLICY. GENERAL LIABILITY FORMS: CG2028 07/04 FORM NO. FORMSINV 1/86 ISSUED 06/01/05 PENN NATIONAL COMMERCIAL GENERAL LIABILITY POLICY DECLARATIONS INSURANCE ENDORSEMENT NUMBER 03 EFFECTIVE DATE 05/20/05 Pan tk".d Sow1y luwuow C-wy P.O. Be, 23B 1 •14-mbute. PA 1710.2961 K1I ftI_eceecCAR1 F POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 PA NATIONAL MUTUAL CAS INS CO 1 0 000008 6 NAMED INSURED AND ADDRESS AGENCY APEX HOMES INC AND/OR INSURANCE & SURETY PARAMOUNT HOMES OF PA AND/OR P 0 BOX 698 415 W MARKET ST CAMP HILL PA 17011 MIDDLEBURG PA 17842 It is agreed that this policy is hereby amended as indicated below: THE FOLLOWING GENERAL LIABILITY FORMS ARE: ADDED: CG2028 07/04 ADDITIONAL NEW ANNUAL PREMIUM: $130,386.00 TOTAL PREMIUM THIS ENDORSEMENT PREMIUM $0.00 THIS ENDORSEMENT IS SUBJECT TO THE DECLARATIONS, CONDITIONS AND OTHER TERMS OF THE POLICY WHICH ARE NOT INCONSISTENT HEREWITH AND WHEN COUNTERSIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY, FORMS A PART OF THE POLICY DESCRIBED HEREIN. PRO-RATA PERCENTAGE: 61.9% SIGNATURE OF AUTHORIZED REPRESENTATIVE T POIICn no /nl inr, POLICY SCHEDULE OF NAMES AND ADDRESSES AMENDMENT POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01705 01/01/06 PA NATIONAL MUTUAL CAS INS CO 000000 06 THE FOLLOWING ARE INSUREDS ON THIS POLICY COMMERCIAL GENERAL LIABILITY NAMES AND ADDRESSES THE FOLLOWING IS ADDED: PREMISES NO.: 1 BUILDING NO.: 1 PNC BANK NA 4242 CARLISLE PIKE CAMP HILL PA 17011 LESSOR OF LEASED EQUIPMENT SEE CG2028 POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED IN AGENCY BR GL9 0103079 01/01/05 01/01/06 F PA NATIONAL MUTUAL CAS INS CO 000000 I 06 ENDORSEMENT SCHEDULE CG2028 07/04 * ADDITIONAL INSURED-LESSOR OF LEASED EQUIPMENT FORM 71-1084 (ED. 04/03) ISSUED 06/01/05 COMMERCIAL GENERAL LIABILITY CG 20 28 0704 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - LESSOR OF LEASED EQUIPMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Or anization(s) PNC BANK NA 4242 CARLISLE PIKE CAMP HILL PA 17011 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization (s). B. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after the equipment lease expires. E,k,6,-f L March 5, 2007 Mr. Lynn Kuhns, Vice President Apex Homes, Inc. 415 West Market Street Middleburg, PA 17842 VIA CERTIFIED MAIL / RETURN RECEIPT REQUESTED RE: Claimant Date of Loss Our Insured Claim # Dear Mr. Kuhn : Timberlakes Development 09/01/05 Apex Homes, Inc. 08764034 Penn National Insurance acknowledges receipt of the above-referenced claim. On Friday, February 23, 2007, Penn National received notice of this matter from Insurance & Surety, Inc.] by way of facsimile. As of this date, the information and/or documents in Penn National's possession concerning this matter consist of the following: (1) ACORD Loss Report (2) Policy Information (3) Copies of Contracts for Manufacture / Purchase of Modular Units by Timberlakes. (4) Erection Contracts with Wray Construction (5) Copies of assorted documents outlining alleged damages from water intrusion into the various modular living units Based upon the foregoing, Penn National understands that this matter involves a claim by David Tilson / Timberlakes Development against Apex Homes, Inc. arising out of alleged water intrusion in 18 living units manufactured by Apex and purchased by Timberlakes for sale as private residences upon completion of site installation. Penn National further understands that Apex Homes, Inc. is submitting this claim for coverage under a Commercial General Liability policy issued by Penn National Mutual Casualy Insurance Company pursuant to policy number GL9 0103079 for the policy period of January 1, 2005 - January 1, 2006 Based upon the information and documents currently available, Penn National cannot yet determine the affordability of coverage for this claim under the subject insurance policy. In particular, we are only now beginning our full investigation into these claims. Penn National will continue its activities to investigate whether such commercial general liability coverage is afforded for this claim and will advise you of its conclusion as soon as practicable. Please note the following language which appears in your policy: SECTION I -COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury' or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury"or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit"that may result. But: (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. b. This insurance applies to "bodily injury" and "property damage" only it (1) The "bodily injury"or "property damage" is caused by an "occurrence" that takes place in the "coverage territory'; (2) The "bodily injury" or "property damage" occurs during the policy period; and (3) Prior to the policy period, no insured listed under Paragraph 1. of Section II - Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. c. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim, includes any continuation, change or resumption of that "bodily injury' or "property damage" after the end of the policy period. d. "Bodily injury' or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer, (2) Receives a written or verbal demand or claim for damages because of the "bodily injury' or "property damage"; or (3) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur. e. Damages because of "bodily injury"include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 1. We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: a. All expenses we incur. b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. c. The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work. e. All costs taxed against the insured in the "suit". f. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. g. All interest on the full amount of anyjudgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. These payments will not reduce the limits of insurance. 2. If we defend an insured against a "suit"and an indemnitee of the insured is also named as a party to the "suit', we will defend that indemnitee if all of the following conditions are met: a. The "suit"against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; b. This insurance applies to such liability assumed by the insured; c. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; d. The allegations in the "suit"and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee; e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit"and agree that we can assign the same counsel to defend the insured and the indemnitee; and f. The indemnitee: (1) Agrees in writing to: (a) Cooperate with us in the investigation, settlement or defense of the "suit; (b) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (c) Notify any other insurer whose coverage is available to the indemnitee; and (d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (2) Provides us with written authorization to: (a) Obtain records and other information related to the "suit; and (b) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b. (2) of Section I - Coverage A - Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury"and "property damage" and will not reduce the limits of insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met. The policy also contains several exclusions to coverage. Those which may be pertinent to this claim are listed as follows: 2. Exclusions This insurance does not apply to: a. Expected Or Intended Injury "Bodily injury"or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. b. Contractual Liability "Bodily injury"or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury' or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury"or "property damage", provided: (a) Liability to such party for, or for the cost of, that partys defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. j. Damage To Property "Property damage" to: (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. Paragraphs (1) , (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3) , (4) , (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". k. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it 1. Damage To Your Work "Property damage" to 'your work" arising out of it or any part of it and included in the 'products-completed operations hazard'. This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. m. Damage To Impaired Property Or Property Not Physically Iniured "Property damage" to "impaired property" or property that has not been physically inured arising out of. (1) A defect deficiency, inadequacy or dangerous condition in "your product" or "your work or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical iniury to "your product" or "your work" after it has been put to its intended use. n. Recall Of Products. Work Or Impaired Property Damages claimed for any loss, cost or expense incurred by you or others for the loss of use withdrawal recall inspection repair, rreplacement adjustment removal or disposal of (1) "Your product (2) "Your work", or (3) "impaired property". if such product work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defer deficiency inadequacy or dangerous condition in it. A number of the terms found in the policy language cited above are noted in quotation marks (" "). These terms are defined in the policy as follows: SECTION V - DEFINITIONS 8. "Impaired property" means tangible property, other than "your product' or "your work", that cannot be used or is less useful because: a. It incorporates "your product" or "your work"that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of "your product" or "your work'; or b. Your fulfilling the terms of the contract or agreement. 9. "Insured contract' means: a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner is not an "insured contract"; b. A sidetrack agreement; c. Any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad; d. An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; e. An elevator maintenance agreement; f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. Paragraph f. does not include that part of any contract or agreement: (1) That indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or crossing; (2) That indemnifies an architect, engineer or surveyor for injury or damage arising out of: (a) Preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (3) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of the insured's rendering or failure to render professional services, including those listed in (2) above and supervisory, inspection, architectural or engineering activities. 13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 16. "Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product"or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; (2) The existence of tools, uninstalled equipment or abandoned or unused materials; or (3) Products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products-completed operations are subject to the General Aggregate Limit 17. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 18. "Suit' means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury"to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 21. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by, (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles) , materials, parts or equipment furnished in connection with such goods or products. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product; and (2) The providing of or failure to provide warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 22. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work", and (2) The providing of or failure to provide warnings or instructions. As per the above referenced exclusions and definitions, the Commercial General Liability Coverage Form does not afford coverage for work Apex Homes, Inc. performed, if the damages alleged are the actual work. There is the potential that the entire construction project could be considered "your work" once your labor and/or materials are incorporated into the final construction. As a result, coverage for some, if not all, damages alle,Eed may not be afforded defense and/or indemnification coverage. Your policy also contains the following endorsement (CG 21 67 04 02) - Fungi or Bacteria Exclusion which may well have application to the loss in question. Please note: COMMERCIAL GENERAL LIABILITY CG 21 67 04 02 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. FUNGI OR BACTERIA EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A The following exclusion is added to Paragraph 2. , Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability: 2. Exclusions This insurance does not apply to: Fungi or Bacteria a. "Bodily injury" or "property damage" which would not have occurred, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any "fungi" or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event; material or product contributed concurrently or in any sequence to such injury or damage. b. Any loss, cost or expenses arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of, "fungi' or bacteria, by any insured or by any other person or entity. This exclusion does not apply to any 'fungi" or bacteria that are, are on, or are contained in, a good or product intended for consumption. B. The following exclusion is added to Paragraph 2. , Exclusions of Section I - Coverage B - Personal And Advertising Injury Liability: 2. Exclusions This insurance does not apply to: Fungi or Bacteria a. "Personal and advertising injury" which would not have taken place, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of any "fungi" or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury. b. Any loss, cost or expense arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of, "fungi" or bacteria, by any insured or by any other person or entity. C. The following definition is added to the Definitions Section: "Fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or byproducts produced or released by fungi. CG 21 67 04 02 © ISO Properties, Inc., 2001 The insurance policy under which Apex Homes, Inc. is seeking coverage requires Apex Homes, Inc.'s cooperation in this investigation. Please note the following conditions of your policy: SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. If a claim is made or "suit" is brought against any insured, you must (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You must see to it that we receive written notice of the claim or "suit"as soon as practicable. c. You and any other involved insured must (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"(2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply. d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent 3. Legal Action Against Us No person or organization has a right under this Coverage Part a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Part unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. In the event Apex Homes, Inc. has any information that would assist in this investigation, please immediately contact the undersigned. Please do not discuss this claim of the extent of Apex Homes, Inc.'s insurance program with anyone other than a Penn National representative or, if applicable, any attorney retained to represent Apex Homes, Inc.'s interest in this matter. Please be advised that Penn National reserves any and all of its rights under any of the provisions, definitions, conditions or exclusions contained in ay insurance policy issued by Penn National to Apex Homes, Inc.. Furthermore, upon the discovery of any other facts or issues relating to coverage of this matter, Penn National reserves its rights to modify or amend its coverage position and assert any defense based upon any of the policy provisions, definitions, conditions or exclusions, whether or not specifically mentioned herein. Please be advised that this is not a denial of coverage, but rather to inform Apex Homes, Inc. of a potential coverage issue. Any actions taken by Penn National in the investigation of the matter, or in negotiating for a compromise settlement, or in making any settlement, or in defending this claim, or in any other way acting or failing to act, shall not constitute an admission of liability or an admission of coverage. Furthermore, any actions taken by Penn National in connection with this matter are not to be deemed a waiver of any of its rights to disclaim liability or coverage under the insurance policy issued by Penn National to Apex Homes, Inc., bearing policy number GL9 0103079. Please do not hesitate to contact the undersigned in the event either of you or your insurance agent/broker has any questions or comments regarding this matter. Thank you for your attention to this matter. Sincerely, Penn National Insurance Ronald A Joyce, CPCU, CIW, CCLA Claim Specialist North Carolina Claims Service Office P. O. Box 1961 Harrisburg, PA 17105-1961 Telephone : 1.800.877.7366 x 4162 FAX: 1.866.496.4764 cc: Insurance & Surety r-xki ?i A August 6, 2007 Mr. Lynn Kuhns, Vice President Apex Homes, Inc. 415 West Market Street Middleburg, PA 17842 VIA CERTIFIED MAIL / RETURN RECEIPT REQUESTED RE: Claimant Date of Loss Our Insured Claim # Dear Mr. Kuhn : Timberlakes Development 09/01/05 Apex Homes, Inc. 08764034 This follows and supplements my letters to you of March 5, 2007 and April 17, 2007, as well as our telephone conversation on Thursday, August 2, 2007 concerning the above mentioned claim and the associated law suit. As of this date, the information and/or documents in Penn National's possession concerning this matter consist of the following: (1) ACORD Loss Report (2) Policy Information (3) Original purchase orders between Timberlake Crossing and Apex Homes for the modular home units constructed by Apex and sold to Timberlake. These purchase orders are typically multi-page documents which contain the detailed specifications for each unit and the purchase costs; (4) Installation agreements between Apex and Wray Construction on behalf of Timberlake Crossing which outline the erection terms for each unit. There appears to be an installation agreement for each unit sold to Timberlake by Apex. (5) Various hand written lists of issues needing resolution that appear to be of a "punch list" nature, and other "warranty" issues, appearing to be related to the delivered units, but not the water intrusion or erection issues. (6) Brief correspondence from 1995 addressed to Mike Broome of Site Tec, from Real Estate Rescue and Emergency Mitigation Technologies, respectively, indicating opinions on moisture levels and water entry points. (7) Multiple reports from ECS Mid-Atlantic addressed to Mr. Broome, with dates ranging from November 2005 through October 2006. These reports address the results of testing in each of the units following mold remediation, to ensure that the problem of mold infestation has been cured. A typical report for each unit contains three key elements - a narrative concerning the findings and conclusions; a set of supporting photos and diagrams showing locations and the presence of mold in various places within the unit being reported; and the written results of various tests performed to determine the current levels of particulates remaining within each unit. (8) Correspondence from law firm representing Timberlake Crossing and Penn National's response. (9) Summons and Complaint filed by Timberlake Crossing against Apex Homes and Wray's Contracting / Scott Wray, and served on Apex Homes, Inc.'s registered agent in for service of legal process in VA, C-T Corporation, on July 20, 2007. Based upon the foregoing, Penn National understands that this matter involves a claim by David Tilson / Timberlakes Development against Apex Homes, Inc. arising out of alleged water intrusion in 18 living units manufactured by Apex and purchased by Timberlakes for sale as private residences upon completion of site installation. Penn National further understands that Apex Homes, Inc. is submitting this claim for coverage under a Commercial General Liability policy issued by Penn National Mutual Casualy Insurance Company pursuant to policy number GL9 0103079 for the policy period of January 1, 2005 - January 1, 2006 Based upon the information and documents currently available, Penn National cannot yet determine the affordability of coverage for this claim under the subject insurance policy. Please note the following language which appears in your policy: SECTION I -COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury' or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit' seeking damages for "bodily injury"or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit"that may result. But: (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments - Coverages A and B. b. This insurance applies to "bodily injury" and "property damage" only if (1) The "bodily injury"or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"(2) The "bodily injury' or "property damage" occurs during the policy period; and (3) Prior to the policy period, no insured listed under Paragraph 1. of Section II - Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. c. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim, includes any continuation, change or resumption of that "bodily injury' or "property damage" after the end of the policy period. d. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section 11- Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; (2) Receives a written or verbal demand or claim for damages because of the "bodily injury' or "property damage"; or (3) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur. e. Damages because of "bodily injury"include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". SUPPLEMENTARY PAYMENTS - COVERAGES A AND S 1. We will pay, with respect to any claim we investigate or settle, or any "suit"against an insured we defend: a. All expenses we incur. b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. c. The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work. e. All costs taxed against the insured in the "suit". f. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. g. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. These payments will not reduce the limits of insurance. 2. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit', we will defend that indemnitee if all of the following conditions are met: a. The "suit' against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract; b. This insurance applies to such liability assumed by the insured; c. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; d. The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee; e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit"and agree that we can assign the same counsel to defend the insured and the indemnitee; and f. The indemnitee: (1) Agrees in writing to: (a) Cooperate with us in the investigation, settlement or defense of the "suit`, (b) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (c) Notify any other insurer whose coverage is available to the indemnitee; and (d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (2) Provides us with written authorization to: (a) Obtain records and other information related to the "suit"; and (b) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b. (2) of Section 1- Coverage A - Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury"and "property damage" and will not reduce the limits of insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met. The policy also contains several exclusions to coverage. Those which may be pertinent to this claim are listed as follows: 2. Exclusions This insurance does not apply to: a. Expected Or Intended Injury "Bodily injury' or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury' resulting from the use of reasonable force to protect persons or property. b. Contractual Liability "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract', reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided: (a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. j. Damage To Property "Property damage" to: (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored repaired or replaced because "your work" was incorrectly performed on it Paragraphs (1) , (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3) , (4) , (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". k. Damage To Your Product "Property damage" to 'your product' arising out of it or any part of it 1. Damage To Your Work "Property damage" to `Your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. m. Damage To Impaired Property Or Property Not Physically Inured Property damage" to "impaired property" or property that has not been physically inured arising out of.- (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work: or (2) A delay or failure by you or anyone acting on you: agreement in accordance with its terms. This exclusion does not apply to the loss of use of of accidental physical injury to 'your product' or "your s, intended use. n. Recall Of Products, Work Or Impaired Property Damages claimed for any loss, cost or expense incur use, withdrawal, recall, inspection, repair, replaceme (1) "Your product': (2) "Your work°: or (3) 'Impaired property'. if such product, work, or property is withdrawn orrec any person or organization because of a known or sc or dangerous condition in it. A number of the terms found in the policy language cit. marks (" "). These terms are defined in the policy as f( SECTION V - DEFINITIONS 8. "Impaired property" means tangible property, other than "y cannot be used or is less useful because: a. It incorporates "your product"or "your work" that is kn,, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agrF if such property can be restored to use by: a. The repair, replacement, adjustment or removal of "yc b. Your fulfilling the terms of the contract or agreement. 9. "Insured contract' means: a. A contract for a lease of premises. However, that port' premises that indemnifies any person or organization for rented to you or temporarily occupied by you with permis- contract'; b. A sidetrack agreement; c. Any easement or license agreement, except in connec operations on or within 50 feet of a railroad; d. An obligation, as required by ordinance, to indemnify with work for a municipality; e. An elevator maintenance agreement; f. That part of any other contract or agreement pertaining indemnification of a municipality in connection with work which you assume the tort liability of another party to pay damage" to a third person or organization. Tort liability m by law in the absence of any contract or agreement. Paragraph f. does not include that part of any contract (1) That indemnifies a railroad for "bodily injury"or "pr construction or demolition operations, within 50 feet c any railroad bridge or trestle, tracks, road-beds, tunnc (2) That indemnifies an architect, engineer or surveyor for injury or damage arising out of. (a) Preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (3) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of the insured's rendering or failure to render professional services, including those listed in (2) above and supervisory, inspection, architectural or engineering activities. 13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 16. "Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When thdt part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. b. Does not include "bodily injury" or "property damage" arising out of., (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; (2) The existence of tools, uninstalled equipment or abandoned or unused materials; or (3) Products or operations for which the classification, listed in the Declarations or in a policy schedule, states that products-completed operations are subject to the General Aggregate Limit. 17. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 18. "Suit"means a civil proceeding in which damages because of "bodily injury', "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 21. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles) , materials, parts or equipment furnished in connection with such goods or products. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product; and (2) The providing of or failure to provide warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 22. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work", and (2) The providing of or failure to provide warnings or instructions. As per the above referenced exclusions and definitions, the Commercial General Liability Coverage Form does not afford coverage for work Apex Homes, Inc, performed, if the damages alleged are the actual work. There is the potential that the entire construction project could be considered "your work" once your labor and/or materials are incorporated into the final construction. Asa result, coverage for some, if not all, damaees alleged may not be afforded defense and/or indemnification coverage. Your policy also contains the following endorsement (CG 21 67 04 02) - Fungi or Bacteria Exclusion which may well have application to the loss in question. Please note: COMMERCIAL GENERAL LIABILITY CG 21 67 04 02 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. FUNGI OR BACTERIA EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. The following exclusion is added to Paragraph 2. , Exclusions of Section 1- Coverage A - Bodily Injury And Property Damage Liability: 2. Exclusions This insurance does not apply to: Fungi or Bacteria a. "Bodily injury" or "property damage" which would not have occurred, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any "fungi" or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event material or product contributed concurrently or in any sequence to such injury or damage. b. Any loss, cost or expenses arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of, "fungi" or bacteria, by any insured or by any other person or en[Ity. This exclusion does not apply to any "fungi" or bacteria that are, are on, or are contained in, a good or product intended for consumption. B. The following exclusion is added to Paragraph 2. , Exclusions of Section I - Coverage B - Personal And Advertising Injury Liability: 2. Exclusions This insurance does not apply to: Fungi or Bacteria a. "Personal and advertising injury" which would not have taken place, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of any "fungi" or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury. b. Any loss, cost or expense arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of, "fungi" or bacteria, by any insured or by any other person or entity. C. The following definition is added to the Definitions Section: "Fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or byproducts produced or released by fungi. CG 21 67 04 02 © ISO Properties, Inc., 2001 The insurance policy under which Apex Homes, Inc. is seeking coverage requires Apex Homes, Inc.'s cooperation in this investigation. Please note the following conditions of your policy: SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. If a claim is made or "suit" is brought against any insured, you must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You must see to it that we receive written notice of the claim or "suit"as soon as practicable. c. You and any other involved insured must (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply. d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent 3. Legal Action Against Us No person or organization has a right under this Coverage Part: a. To join us as a party or otherwise bring us into a "suit"asking for damages from an insured; or b. To sue us on this Coverage Part unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimants legal representative. Because we believe that it is in the mutual best interest of Apex Homes, Inc. and Penn National Insurance Company to provide a defense in this case while we continue to investigate and develop information which would ultimately determine whether coverage for any of this loss should apply under your policy of general liability insurance, Penn National agrees to respond to this law suit by assigning defense counsel to the case to file a timely response to the Summons and Complaint filed against Apex Homes. The continued defense of Apex Homes will be subject to a full reservation of rights as outlined herein. Accordingly, we have contacted the Roanoke, VA law firm of Kalbaugh, Pfund and Messersmith, 2840 Electric Road, Suite 104, Roanoke, VA 24018, telephone (540)-776- 3583. At the appropriate time, M. Scott Fell or one of his associates in the Kalbaugh, Pfund and Messersmith firm will be in touch with you and/or the appropriate individuals within Apex Homes, Inc. to discuss your participation and assistance in the defense of this law suit. In the event Apex Homes, Inc. has any information that would assist in this investigation, please immediately contact the undersigned. Please do not discuss this claim of the extent of Apex Homes, Inc.'s insurance program with anyone other than a Penn National representative or, if applicable, any attorney retained to represent Apex Homes, Inc.'s interest in this matter. Please be advised that Penn National continues to reserve any and all of its rights under any of the provisions, definitions, conditions or exclusions contained in ay insurance policy issued by Penn National to Apex Homes, Inc.. Furthermore, upon the discovery of any other facts or issues relating to coverage of this matter, Penn National reserves its rights to modify or amend its coverage position and assert any defense based upon any of the policy provisions, definitions, conditions or exclusions, whether or not specifically mentioned herein. Please be advised that this is not a denial of coverage, but rather to inform Apex Homes, Inc. of a potential coverage issue. Any actions taken by Penn National in the investigation of the matter, or in negotiating for a compromise settlement, or in making any settlement, or in defending this claim, or in any other way acting or failing to act, shall not constitute an admission of liability or an admission of coverage. Furthermore, any actions taken by Penn National in connection with this matter, including the defense of this suit, are not to be deemed a waiver of any of its rights to disclaim liability or coverage under the insurance policy issued by Penn National to Apex Homes, Inc., bearing policy number GL9 0103079. Please do not hesitate to contact the undersigned in the event either of you or your insurance agent/broker has any questions or comments regarding this matter. Thank you for your attention to this matter. Sincerely, Penn National Insurance Ronald M. Joyce, CPCU, CIW, CCLA Claim Specialist North Carolina Claims Service Office P. O. Box 1961 Harrisburg, PA 17105-1961 Telephone : 1.800.877.7366 x 4162 /FAX: 1.866.496.4764 cc: Insurance & Surety M. Scott Fell, Esquire / Kalbaugh, Pfund & Messersmith r-j cz? Johnson, Duffle, Stewart & Weidner By: Michael J. Cassidy I.D. No. 82164 Elizabeth D. Snover I. D. No. 200997 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 mjc@jdsw.com Attorneys for Defendant Timberlake Crossing, LLC PENNSYLVANIA NATIONAL ; IN THE COURT OF COMMON PLEAS OF MUTUAL CASUALTY INSURANCE CUMBERLAND COUNTY, PENNSYLVANIA COMPANY 2 North Second Street NO. 08-908 Harrisburg, PA 17101, CIVIL ACTION - LAW Plaintiff V. APEX HOMES, INC., 7172 Route 522 Middleburg, PA 17842, SCOTT D. WRAY, individually and d/b/a WRAY'S CONTRACTING : 724 Whiskey Road McClure, PA 17841, TIMBERLAKE CROSSING, LLC Individually and as Assignee of TILSON CREATIONS, INC. 6132-C Brookshire Blvd. Charlotte, NC 28216, ; Defendants DEFENDANT TIMBERLAKE CROSSING LLC ANSWER TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND NOW, comes Timberlake Crossing, LLC, by and through its counsel, Johnson, Duffie, Stewart & Weidner, P.C., and files this Answer to Plaintiff's Motion for Summary Judgment, and in support thereof, avers as follows: 1 y 1. Admitted. 2. Admitted. 3. Admitted. 4. Denied. The Complaint filed by Timberlake Crossing, LLC in the matter pending in the United States District Court for the Western District of Virginia, Roanoke Division, docketed at Number 7:07-CV-00338 attached as Exhibit "A" to Plaintiff's Motion for Summary Judgment, being a writing, speaks for itself, and therefore Plaintiff's attempt to paraphrase the allegations set forth in said Complaint is denied. 5. Admitted. 6. Denied. The Complaint filed by Timberlake Crossing, LLC in the matter pending in the United States District Court for the Western District of Virginia, Roanoke Division, docketed at Number 7:07-CV-00338 attached as Exhibit "A" to Plaintiffs Motion for Summary Judgment, being a writing, speaks for itself, and therefore Plaintiffs attempt to paraphrase the allegations set forth in said Complaint is denied. 7. Admitted upon information and belief. 8. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 9. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 2 10. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 11. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 12. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 13. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. 14. Denied. Said averment is denied as a conclusion of law to which no responsive pleading is required. WHEREFORE, Defendant Timberlake Crossing, LLC, respectfully requests this Honorable Court enter an Order denying Plaintiffs Motion for Summary Judgment. JOHNSON, DUFFIE, STEWART & WEIDNER :341777 Michael J. Cassidy Attorney I.D. No. 82164 Elizabeth D. Snover Attorney I.D. No. 200997 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Telephone (717) 761-4540 Attorneys for Defendant Timberlake Crossing, LLC 3 CERTIFICATE OF SERVICE AND NOW, this day of kads f , 2008, the undersigned does hereby certify that he did this date serve a copy of the foregoing document upon the other parties of record by causing same to be deposited in the United States Mail, first class postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Paul R. Walker, Esquire Thomas, Thomas & Hafer, LLP 305 North Front Street P. O. Box 999 Harrisburg, PA 17108-0999 Attorney for Plaintiff Timothy J. Nieman, Esquire Rhoads & Sinon, LLP 12th Floor, One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 Attorney for Defendant Apex Homes, Inc. Scott D. Wray dlbla Wray's Contracting 724 Whisky Road McClure, PA 17841 Defendant, Pro Se JOHNSON, DUFFIE, STEWART & WEIDNER By: 4 ri CID O A)'_ (David D. Buell Prothonotary KirkS. Sohonage, ESQ Solicitor Wfnee X Simpson 15` Deputy Prothonotary Irene E. 94orrow 2 "d Deputy Prothonotary Office of the (Prothonotary Cum6erfand County, Tennsylvania ©g - 760 CIVIL TERM ORDER OF TERMINATION OF COURT CASES AND NOW THIS 25TH DAY OF OCTOBER, 2011, AFTER MAILING NOTICE OF INTENTION TO PROCEED AND RECEIVING NO RESPONSE -THE ABOVE CASE IS HEREBY TERMINATED WITH PREJUDICE IN ACCORDANCE WITH PA R.C.P 230.2 BY THE COURT, DAVID D. BUELL PROTHONOTARY One Courthouse Square • Suite 100 0 Carlisle, PA 17013 0 (717) 240-6195 9 Fax (717) 240-6573