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HomeMy WebLinkAboutCAG2002-0045 - Original - Theodore Paul Hunter - Hearing Examiner Services - 01/01/2002 RECEIVE JUL 01 2002 PROFESSIONAL SERVICES AGREEMENT CITY OF IE-NT p NING SERVICES This Agreement is made and entered into on the date fully executed below, between the CITY OF KENT, a Washington municipal corporation, (hereinafter "City"), and THEODORE PAUL HUNTER, a professional consultant(hereinafter"Hunter"),whose principal office is located at 101 Yesler Way, Suite#607, Seattle, Washington 98104. I. Agreement for Services 1.1 The Hearing Examiner shall provide those services and fulfill those duties as identified in the City's ordinances relating to the Hearing Examiner, and carry out such other responsibilities as may be agreed to between the City and the Hearing Examiner. Those services, duties and responsibilities include preparing for land use hearings by reviewing files and applicable laws; conducting site views of properties that are the topic of a land use hearing,conducting hearings on appeals and applications; and preparing a written decision including findings and conclusions on all applications for permits and appeals heard. The Hearing Examiner agrees to be available for hearings at all reasonable times (normally the 1" and 3"Wednesdays) including evening hearings when desired by the City. 1.2 Mr. Theodore Hunter shall serve as Hearing Examiner. Ms LeAnna Drevecky or Mr. James Driscoll may serve as Hearing Examiner Pro Tem on individual cases with the consent of the City. The Hearing Examiner and the City shall agree upon exact hearing dates. 1.3 The City agrees to provide the Hearing Examiner with staff support and office materials as required for performance of this contract including publication of notices of hearings, recordings of hearings, record preservation and distribution of decisions. 1.4 The term of this Agreement shall be four years,beginning January 1,2002 and ending January 1,2006. The contract shall continue on a month-to-month basis until terminated or renewed. 1.5 The City may, during the term of this Agreement, engage other independent contractors to perform the same or similar work that Hunter performs hereunder. PROFESSIONAL SERVICES AGREEMENT- 1 (January 7, 2002) (Btwn Hunter and City of Kent—Hearing Examiner) II. Pa ment 2.1 The Hearing Examiner shall be compensated at an hourly rate for the duties described in paragraph one of this Agreement. Compensation of Hunter's services as Hearing Examiner shall be at the rate of$150.00 per hour. Services by Mr. Driscoll shall be at the rate of$150.00 per hour. Services by Ms. Drevecky shall be at the rate of$80.00 per hour. 2.2 Invoices submitted to the City shall specify the rate, description of each item of service, and the amount of time spent on each item of service. 2.3 The City, or its authorized representative, shall have the authority to inspect, audit, and copy upon reasonable notice and from time to time any records of Hunter regarding his billings and expenditures made for the work performed herein. III. Duration of Work The City and Hunter agree that work will begin on the services described in Section I herein under the terms and upon full execution of this Agreement, and will continue to perform such work until the Agreement is terminated as provided below. IV. Termination The parties agree that either party may terminate this Agreement,without cause,upon thirty (30)days written notification to the other party. In the event of termination, the City shall pay for all services performed by Hunter to the effective date of termination. After termination, the City may copy all records and data within Hunter's possession pertaining to the work described in Section 1, which may be used by the City without restriction and without liability to Hunter. The City shall defend, indemnify and hold Hunter harmless from any claims, injuries, damages, losses, or suits, including all legal costs and attorney's fees, arising out of Hunter's allowance of the City to copy the aforementioned records and data. V. Relationship of Parties This Agreement calls for the performance of the services of Hunter as an independent contractor and Hunter will not be considered an employee of the City for any purpose. Hunter will control and direct the performance and details of his work. Hunter, his officers, agents and PROFESSIONAL SERVICES AGREEMENT-2 (January 7, 2002) (Btwn Hunter and City of Kent—Hearing Examiner) employees, shall secure at his own expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation,unemployment compensation,Worker's Compensation, and all other payroll deductions for Hunter and his officers, agents and employees and the costs of all business licenses, if any, in connection with the services to be performed hereunder. Hunter will be solely responsible for his acts and the acts of his agents, employees, and servants during the performance of this Agreement. VI. Discrimination 6.1 In the hiring of employees for the performance of work under this Agreement or any sub-contract hereunder,Hunter or any person acting on his behalf shall not,by reason of race,creed, religion, color, sex, age, national origin, marital status, or the presence of any sensory, mental, or physical handicap, discriminate against any person who is qualified and available to perform the work to which the employment relates, and neither Hunter nor any person acting on his behalf shall violate any of the terms of RCW 49.60, Title VII of the Civil Rights Act of 1964, §504 of the Civil Rights Act of 1973, The American's with Disabilities Act of 1992, or any other applicable federal, state or local law or regulation regarding nondiscrimination in employment. 6.2 Hunter shall execute the attached City of Kent Equal Employment Opportunity Policy Declaration, comply with City Administrative Policy 1.2, and upon termination of the Agreement, file the attached Compliance Statement. VII. Indemnification Hunter shall defend, indemnify, and hold the City, its officers, officials, agents, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorneys' fees, arising out of or in connection with the performance of this Agreement, except for that portion of injuries and damages caused by the City's negligence. VIII. Insurance 8.1 Hunter shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by Hunter,his agents, representatives, and employees PROFESSIONAL SERVICES AGREEMENT-3 (January 7, 2002) (Btwn Hunter and City of Kent—Hearing Examiner) within ten(10)days of execution of this Agreement. Hunter shall provide a Certificate of Insurance evidencing: a. Commercial General Liability insurance written on an occurrence basis with limits no less than$1,000,000 combined single limit per occurrence and $2,000,000 general aggregate for personal injury,bodily injury and property damage. Coverage shall include but not be limited to: completed operations; employer's liability; and coverage for hired and non-owned motor vehicles; and b. Professional Liability insurance with limits no less than$1,000,000 limit per occurrence. - - 8.2 Any payment of deductible or self-insured retention shall be the sole responsibility of Hunter. All required policies shall be provided on an "occurrence" basis except professional liability insurance(if required), which shall be provided on a"claims-made"basis. Hunter's Commercial General Liability insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. 8.3 The City shall be named as an additional insured on the Commercial General Liability insurance policy, as respects work performed by or on behalf of Hunter and a copy of the endorsement naming the City as additional insured shall be attached to the Certificate of Insurance. The City reserves the right to receive a certified copy of all the required insurance policies. Hunter's insurance shall be primary insurance as respects the City and the City shall be given thirty(30)days prior written notice by certified mail, return receipt requested, of any cancellation, suspension or material change in coverage. The City also reserves its unqualified right to require at any time and for any reason, proof of coverage in the form of a duplicate of the insurance policy with all endorsements as evidence of coverage. IX. Entire Agreement The written provisions and terms of this Agreement, together with any Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other representative of the City, and such statements shall not be effective or be construed as entering into or forming a part of or PROFESSIONAL SERVICES AGREEMENT-4 (January 7, 2002) (Btwn Hunter and City of Kent—Hearing Examiner) altering in any manner whatsoever this Agreement. The entire agreement between the parties with respect to the subject matter hereunder is contained in this Agreement and any Exhibits attached hereto. X. Modification No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the City and Hunter. XI. Assignment -Any assignment of this Agreement by Hunter without the-written consent of the City shall be void. If the City shall give its consent to any assignment, this paragraph shall continue in full force and effect and no further assignment shall be made without the City's consent. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. CITY: HUNTER: CITY OF KENT THEODORE P. HUNTER By: By: �Q Prin ame: Print Name: _Theodore P. Hunter Its: p iZo'Tc' Date: Co / 2. G/ ©Z Date: 9111?/IAOAJ APPROVED AS TO FORM: t /< r,�. Z4/+— Kim Adams Pratt, Assistant City Attorney U\USERDATA\DOC\Hunter-ProfesstonalSvcsAgreement doc PROFESSIONAL SERVICES AGREEMENT-5 (January 7, 2002) (Btwn Hunter and City of Kent—Hearing Examiner) DECLARATION CITY OF KENT EQUAL EMPLOYMENT OPPORTUNITY POLICY The City of Kent is committed to conform to Federal and State laws regarding equal opportunity. As such all contractors, subcontractors and suppliers who perform work with relation to this contract shall comply with the regulations of the City's equal employment opportunity policies. The following questions specifically identify the requirements the City deems necessary for any contractor, subcontractor or supplier on this specific contract to adhere to. An affirmative response is required on all of the following questions for this contract to be valid and binding. If any contractor, subcontractor or supplier willfully misrepresents themselves with regard to the directives outlines, it will be considered a breach of contract and it will be at the City's sole determination regarding suspension or termination for all or part of the contract; The questions areas follows: - 1. I have read the attached City of Kent administrative policy number 1.2. 2. During the time of this contract I will not discriminate in employment on the basis of sex, race, color, national origin, age, or the presence of all sensory, mental or physical disability. 3. During the time of this contract the prime contractor will provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. 4. During the time of the contract I,the prime contractor,will actively consider hiring and promotion of women and minorities. 5. Upon termination of this contract, an adherence statement will be signed by me, the Prime Contractor, that the Prime Contractor complied with the requirements as set forth above. By signing below, I agree to fulfill the five requirements referenced above. Dated this day of�� �` e , 2002— By: �n For: Title: Date: EEOC DOCUMENTS 1 (January 7,2002) CITY OF KENT ADMINISTRATIVE POLICY NUMBER: 1.2 EFFECTIVE DATE: January 1, 1998 SUBJECT: MINORITY AND WOMEN SUPERSEDES: April 1, 1996 CONTRACTORS APPROVED BY Jim White,Mayor POLICY: Equal employment opportunity requirements for the City of Kent will conform to federal and_state laws. All-contractors,-subcontractors, consultants-and suppliers of the City must guarantee equal employment opportunity within their organization and, if holding contracts with the City amounting to $10,000 or more within any given year,must take the following affirmative steps: 1. Provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. 2. Actively consider for promotion and advancement available minorities and women. Any contractor, subcontractor, consultant or supplier who willfully disregards the City's nondiscrimination and equal opportunity requirements shall be considered in breach of contract and subject to suspension or termination for all or part of the contract. Contract Compliance Officers will be appointed by the Directors of Planning,Parks, and Public Works Departments to assume the following duties for their respective departments. 1. Ensuring that contractors, subcontractors, consultants, and suppliers subject to these regulations are familiar with the regulations and the City's equal employment opportunity policy. 2. Monitoring to assure adherence to federal, state and local laws,policies and guidelines. EEOC DOCUMENTS 2 (January 7,2002) o � /n2r October 4, 2002 TO: Charlene Anderson Senior Planner City of Ken FROM: Ted Hunter Hearing Examine City of Kent RE: Your Request for Insurance Documents By telephone call you requested copies of my insurance coverage for Commercial General Liability. I've attached a copy of the policy. You will note that the policy provides for $1,000,000 combined single limit per occurrence and$2,000,000 general aggregate for personal injury and property damage. The Professional Liability insurance referenced in the contract I have with the City is not available or applicable to the work I do for the City of Kent. Providing hearing examiner services is not considered the practice of law and we are aware of no private insurance carrier that presently provides insurance to hearing examiners. The primary reason for this, as I understand it, is that there is virtually no risk because of the immunity provided to quasi-judicial officers. However, for the small risk that may be present, the Washington Cities Insurance Authority(WCIA) does cover my professional activities as Hearing Examiner for the City of Kent just as it does for other WCIA covered cities. The City of Issaquah, for example,recently reviewed this same"boiler-plate"requirement for professional liability insurance and determined, after consultation with WCIA,that the contract requirement was covered under the city's insurance compact with WCIA. I hope this is helpful to you. Please don't hesitate to call me if you have questions or need additional information. r Unigard Insurance Company PO Box 90701 , Bellevue, WA 98009-0701 COMMON POLICY DECLARATIONS POLICY NUMBER: 60603228 ACCOUNT NUMBER: 515962 PRODUCER: BEL 13856 BALCOS INSURANCE INC SEATTLE, WA Named Insured and Mailing Address: LAW OFFICES OF JAMES M. DR I SCOLL AND THEODORE P. HUNTER 101 YESLER H607 SEATTLE, WA 98104 Policy Period: From Ju I y 01 , 2002 to Ju I y 01 , 2003 at 12:01 A.M., Standard Time at your Mailing Address shown above. Business Description: LAW OFF I CE In return for the 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. This policy consists of the following coverage parts for which a premium is indicated. This premium may be subject to adjustment. Premium Businessowners Policy Coverage Part $ min ( In recognition of claim free years, premium for the Businessowners Coverage Part reflects a 5 . 0% credit ) Estimated Total Policy Premium $ Coverage Forms and Endorsements applicable to all Coverage Parts: See Schedule of Forms and Endorsements Date Countersigned by 06/03/ 02 150050 0499 Common Policy Conditions on the reverse side 7295 f t Unigard Insurance Company PO Box 90701 , Bellevue, WA 98009-0701 Policy No . Businessowners Policy B0603228 Schedule of Forms and Endorsements Coverage forms and endorsements applicable to all coverage parts: Form Number Edition Title Policy 150050 04 99 COMMON POLICY DECLARATIONS 141065 07 87 SCHEDULE OF ENDORSEMENT FORMS Businessowners 141310 12 00 BUSINESSOWNER POLICY COVERAGE PART 153125 05 01 BOP SUPPLEMENTAL DECLARATIONS BP0002 12 99 BUSINESSOWNERS SPECIAL PROPERTY COVERAGE BP0006 01 97 BUSINESSOWNERS LIABILITY COVERAGE FORM BP0009 01 97 BUSINESSOWNERS COMMON POLICY CONDITIONS BPO106 01 97 WASHINGTON CHANGES BP0473 12 98 WASHINGTON CHANGES - DOMESTIC ABUSE BP1004 04 98 EXCL OF CERTAIN COMPUTER-RELATED LOSSES IL0157 04 89 WASHINGTON CHANGES - ACTUAL CASH VALUE IL0173 12 98 WASHINGTON CHANGES-EXCLUDED CAUSES OF LOSS 151675 04 99 EXCL-COMP DATE/TIME PROB-W/ EXCEP FOR BI BP0402 01 87 ADD INSD - MANAGERS/LESSORS OF PREMISES 153024 12 00 BUSINESSOWNERS COVERAGE AMENDMENTS 153025 12 00 BUSINESSOWNERS SPECIFIC COV EXTENSION FORM 153026 12 00 BUSINESSOWNERS COMBINED COV EXTENSION FORM BP0437 01 96 EXCLUSION - PERSONAL & ADVERTISING INJURY 153135 06 01 WA STATE EMPLOYERS' LIAB INS (STOP GAP) 153095 12 00 EQUIPMENT BREAKDOWN ENDORSEMENT 141065 0787 06-03-02 7297 f t Unigard Insurance Company PO Box 90701 , Bellevue, WA 98009-0701 Policy No . Businessowners Policy B0603228 Page 1 Schedule of Additional Insureds Policy Period : July 01 , 2002 TO July 01 , 2003 OR PROPERTIES LLC AND FIRST & YESSLER LLC PO BOX 4460 SEATTLE, WA 98104 Days notice: 10 Form( s) BP0402 Applies to: Loc #001 Bldg 901 141025 0787 06-03-02 7293 t Unigard Insurance Company PO Box 90701 , Bellevue, WA 98009-0701 Policy Number : B0603228 BUSINESSOWNERS POLICY COVERAGE PART The Businessowners Policy consists of this Declarations and the Coverage Forms and Endorsements indicated as applicable. DECLARATIONS Form of Business: ❑ Individual ❑ Joint Venture ❑Limited Liability Company ❑ Corporation ® Partnership ❑Organization (Other than Partnership, Joint Venture or Limited Liability Company) Property Coverages Provided: Insurance at the described premises applies only for coverage for which a limit of insurance is shown. See Supplemental Declarations attached. Liability and Medical Payments Coverage Provided* Limits of Insurance Liability and Medical Expenses - any one occurrence $ 1 , 000,000 Medical Expenses - per person $ 5,000 Liability General Aggregate $ 2,000,000 Products-Completed Operations Aggregate $ 1 ,000,000 Fire Legal Liability - any one fire or explosion $ 50,000 *Subject to Zero Property Damage Deductible Description of Premises: See Supplemental Declarations attached Mortgage Holders: See Schedule of Mortgagees attached, if applicable Loss Payees: See Schedule of Loss Payees attached, if applicable Deductible: See Supplemental Declarations attached Coverage Forms and Endorsements applicable to the Policy: See Schedule of Forms and Endorsements In return for the 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. 141310 1200 7299 vmrc11 u n uui al lLt! tympany PO Box 90701, Bellevue, WA 98009-0701 Policy No. Businessowners Policy Page 1 of 2 B0603228 Supplemental Declarations I. Businessowners Coverage Extension and Optional Coverages Coverage applies to all insured locations identified in Section II. The limits shown are the total limits for all insured locations, not the individual limits for each insured location. A. Combined Coverage Extension per form 153026 You may apply up to $100,000 for loss or damage that exceeds $500 caused by a covered cause of loss to one or any combination of the following. Read the form for additional conditions. Accounts Receivable Rental Office Business Personal Property Arson Reward Personal Effects Cost to Prepare Inventory Personal Property of Others Fire Department Service Charge Recharging Computer Hardware, Media, Records Utility Services - Direct Damage (includes transit, and off premises for laptop computers) Valuable Papers B. Specific Coverage Extension per form 153025 A $500 deductible applies to each Extension except as shown. Read the form for additional conditions. Coverage Extension Limit Spoilage Due to Power Outage $ 25,000 Backup of Sewers, Drains, of Sumps (no deductible applies) $ 5,000 Forgery and Alteration $ 5,000 Money Orders and Counterfeit Paper Currency $ 2,500 Transit (excludes Computer Hardware, Media and Data) $ 15,000 Personal Property Temporarily Off Premises $ 15,000 Fairs or Exhibitions $ 15,000 Salespersons Samples $ 2,500 Outdoor Property (maximum of$1,000 per tree, plant or shrub) $ 5,000 Fine Arts (does not apply if scheduled elsewhere) $ 5,000 Newly Acquired Buildings (90-days) $ 500,000 Newly Acquired Business Personal Property (90-days) $ 250,000 Business Income From Dependent Properties (no deductible applies) 12 mo (*ALS =Actual Loss Sustained) ALS* C. Optional Coverages per form BP0002 The Optional Coverage deductible is $500 Money and Securities - Inside $ 10,000 - Outside $ 5,000 Employee Dishonesty $ 10,000 153125 0501 06-03-02 7301 unigaru insurance %,urnPany PO Box 90701, Bellevue, WA 98009-0701 Policy No. Businessowners Policy Page 2 of 2 B0603228 Supplemental Declarations II. Schedule of Coverages by Location See the applicable Coverage Form(s)for the specific coverage provisions and exclusions. ----- - - ---- ----- - - - - -- - -- - - - - --- - - - -- - - --- - - ----- - -- - - - ---- - - - - ----- - - --- - ----- - - ---- - --- - - - --- - - - --- - ---- - - ---- - -- - - - ---- - - -- Location#001 Building#01 101 Yesler, Suite 607 Seattle,WA 98104 Occupied as: Office Coverage Description Deductible Limit Business Personal Property $ $ 500 15,000 Replacement Cost Valuation applies 2% Automatic Increase Equipment Breakdown applies Outdoor Signs $ $ 500 5,000 III. Coverages By Policy A. Other by Policy Coverages Coverage Description Deductible Limit Employers' Liability Insurance (Stop Gap) per form 153135 Bodily Injury Each Accident $ none 1,000,000 Bodily Injury by Disease Each Employee $ 1,000,000 Bodily Injury by Disease Policy Limit $ 1,000,000 153125 0501 06-03-02 73, 1 � BUSINESSOWNERS BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire polity 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. The words "we", "us" and "our" refer to the Company providing this insurance. Other words and phrases that appear in quotation marks have special meaning. Refer to Section H - Property Definitions. A. Coverage We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss. 1. Covered Property Covered Property, as used in this policy, means the type of property as described in this section, A.1., and limited in A.2., Property Not Covered if a Limit of Insurance is shown in the Declarations for that type of property. a. Buildings, meaning the buildings and structures at the premises described in the Declarations, including: (1) Completed additions; (2) Fixtures, including outdoor fixtures; (3) Permanently installed: (a) Machinery; and (b) Equipment; (4) Your personal property in apartments or rooms furnished by you as landlord; (5) Personal property owned by you that is used to maintain or service the buildings or structures or the premises, including: (a) Fire extinguishing equipment; (b) Outdoor furniture; (c) Floor coverings;and (d) Appliances used for refrigerating,ventilating, cooking, dishwashing or laundering; (6) If not covered by other insurance: (a) Additions under construction,alterations and repairs to the buildings or structures; (b) Materials,equipment, supplies and temporary structures,on or within 100 feet of the described premises, used for making additions, alterations or repairs to the buildings or structures. b. Business Personal Property located in or on the buildings at the described premises or in the open (or in a vehicle)within 100 feet of the described premises, including: (1) Property you own that is used in your business; (2) Property of others that is in your care, custody or control, except as otherwise provided in Loss Payment Property Loss Condition E.6.d.(3)(b); BP0002 1299 Copyright, Insurance Services Office, Inc., 1999 Page 1 of 28 7303 L � B0603228 UNIGARD INSURANCE COMPANY (3) Tenant's improvements and betterments. Improvements and betterments are fixtures, alterations, installations or additions: (a) Made a part of the building or structure you occupy but do not own; and (b) You acquired or made at your expense but cannot legally remove;and (4) Leased personal property for which you have a contractual responsibility to insure, unless otherwise provided for under Paragraph A.1.b.(2). 2. Property Not Covered Covered Property does not include: a. Aircraft,automobiles, motortrucks and other vehicles subject to motor vehicle registration; b. "Money" or "securities" except as provided in the: (1) Money and Securities Optional Coverage;or (2) Employee Dishonesty Optional Coverage; c. Contraband or property in the course of illegal transportation or trade; d. Land (including land on which the property is located),water,growing crops or lawns; e. Outdoor fences, radio or television antennas (including satellite dishes) and their lead-in wiring masts or towers, signs (other than signs attached to buildings), trees, shrubs or plants, all except as provided in the: (1) Outdoor Property Coverage Extension; or (2) Outdoor Signs Optional Coverage; f. Watercraft(including motors,equipment and accessories)while afloat. 3. Covered Causes Of Loss Risks Of Direct Physical Loss unless the loss is: a. Excluded in Section B., Exclusions; or b. Limited in Paragraph AA.,Limitations; that follow. 4. Limitations a. We will not pay for loss of or damage to: (1) Steam boilers, steam pipes, steam engines or steam turbines caused by or resulting from any condition or event inside such equipment. But we will pay for loss of or damage to such equipment caused by or resulting from an explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages through which the gases of combustion pass. (2) Hot water boilers or other water heating equipment caused by or resulting from any condition or event inside such boilers or equipment, other than an explosion. (3) Property that is missing, but there is no physical evidence to show what happened to it, such as shortage disclosed on taking inventory. This limitation does not apply to the Optional Coverage for Money and Securities. (4) Property that has been transferred to a person or to a place outside the described premises on the basis of unauthorized instructions. b. With respect to glass (other than glass building blocks) that is part of the interior of a building or structure,or part of an outdoor sign, we will not pay more than $500 for the total of all loss or damage in any one occurrence.Subject to the $500 limit on all loss or damage, we will not pay more than $100 for each plate, pane, multiple plate insulating unit, radiant or solar heating panel, jalousie, louver or shutter. Page 2 of 28 BP0002 1299 73 B0603228 UNIGARD INSURANCE COMPANY This Limitation does not apply to loss or damage by the "specified causes of loss", except vandalism. c. We will not pay for loss or damage to fragile articles such as glassware, statuary, marbles,chinaware and porcelains, if broken, unless caused by the "specified causes of loss" or building glass breakage. This restriction does not apply to: (1) Glass that is part of the interior of a building or structure; (2) Containers of property held for sale; or (3) Photographic or scientific instrument lenses. d. For loss or damage by theft,the following types of property are covered only up to the limits shown: (1) $2,500 for furs,fur garments and garments trimmed with fur. (2) $2,500 for jewelry, watches, watch movements, jewels, pearls, precious and semi-precious stones, bullion, gold, silver, platinum and other precious alloys or metals. This limit does not apply to jewelry and watches worth $100 or less per item. (3) $2,500 for patterns, dies, molds and forms. 5. Additional Coverages a. Debris Removal (1) We will pay your expense to remove debris of Covered Property caused by or resulting from a Covered Cause of Loss that occurs during the polity period. The expenses will be paid only if they are reported to us in writing within 180 days of the earlier of: (a) The date of direct physical loss or damage;or (b) The end of the policy period. (2) The most we will pay under this Additional Coverage is 25% of: (a) The amount we pay for the direct physical loss of or damage to Covered Property;plus (b) The deductible in this policy applicable to that loss or damage. But this limitation does not apply to any additional debris removal limit provided in Paragraph (4) below. (3) This Additional Coverage does not apply to costs to: (a) Extract "pollutants" from land or water;or (b) Remove, restore or replace polluted land or water. (4) If: (a) The sum of direct physical loss or damage and debris removal expense exceeds the Limit of Insurance;or (b) The debris removal expense exceeds the amount payable under the 25% Debris Removal Coverage limitation in Paragraph(2) above; we will pay up to an additional $10,000 for each location in any one occurrence under the Debris Removal Additional Coverage. b. Preservation Of Property If it is necessary to move Covered Property from the described premises to preserve it from loss or damage by a Covered Cause of Loss, we will pay for any direct physical loss of or damage to that property: (1) While it is being moved or while temporarily stored at another location; and (2) Only if the loss or damage occurs within 30 days after the property is first moved. BP0002 1299 Page 3 of 28 7305 L BO603228 UNIGARD INSURANCE COMPANY c. Fire Department Service Charge When the fire department is called to save or protect Covered Property from a Covered Cause of Loss, we will pay up to$1,000 for your liability for fire department service charges: (1) Assumed by contract or agreement prior to loss; or (2) Required by local ordinance. d. Collapse (1) We will pay for direct physical loss or damage to Covered Property,caused by collapse of a building or any part of a building insured under this polity, if the collapse is caused by one or more of the following: (a) The "specified cause of loss" or breakage of building glass, all only as insured against in this policy; (b) Hidden decay; (c) Hidden insect or vermin damage; (d) Weight of people or personal property; (e) Weight of rain that collects on a roof; (f) Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation. However, if the collapse occurs after construction,remodeling or renovation is complete and is caused in part by a cause of loss listed in d.(1)(a) through d.(1)(e), we will pay for the loss or damage even if use of defective material or methods in construction, remodeling or renovation, contributes to the collapse. (2) If the direct physical loss or damage does not involve collapse of a building or any part of a building, we will pay for loss or damage to Covered Property caused by the collapse of personal property only if: (a) The personal property which collapses is inside a building insured under this polity; and (b) The collapse was caused by a cause of loss listed in d.0)(a)through d.(1)(f) above. (3) With respect to the following property: (a) Awnings; (b) Gutters and downspouts; (c) Yard fixtures; (d) Outdoor swimming pools; (e) Piers,wharves and docks; (f) Beach or diving platforms or appurtenances; (g) Retaining walls; and (h) Walks, roadways and other paved surfaces; if the collapse is caused by a cause of loss listed in d.(1)(b) through d.(1)(f), we will pay for loss or damage to that property only if such loss or damage is a direct result of the collapse of a building insured under this policy and the property is Covered Property under this policy. (4) Collapse does not include settling, cracking,shrinkage, bulging or expansion. Page 4 of 28 BP0002 1299 730f . B0603228 UNIGARD INSURANCE COMPANY e. Water Damage, Other Liquids, Powder Or Molten Material Damage If loss or damage caused by or resulting from covered water or other liquid, powder or molten material damage loss occurs,we will also pay the cost to tear out and replace any part of the building or structure to repair damage to the system or appliance from which the water or other substance escapes. We will not pay the cost to repair any defect that caused the loss or damage; but we will pay the cost to repair or replace damaged parts of fire extinguishing equipment if the damage: (1) Results in discharge of any substance from an automatic fire protection system; or (2) Is directly caused by freezing. f. Business Income (1) Business Income We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your "operations" during the "period of restoration". The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss. With respect to loss of or damage to personal property in the open or personal property in a vehicle, the described premises include the area within 100 feet of the site at which the described premises are located. With respect to the requirements set forth in the preceding paragraph, if you occupy only part of the site at which the described premises are located,your premises means: (a) The portion of the building which you rent,lease or occupy; and (b) Any area within the building or on the site at which the described premises are located, if that area services,or is used to gain access to, the described premises. We will only pay for loss of Business Income that you sustain during the "period of restoration" and that occurs within 12 consecutive months after the date of direct physical loss or damage. We will only pay for ordinary payroll expenses for 60 days following the date of direct physical loss or damage. Business Income means the: (i) Net Income (Net Profit or Loss before income taxes) that would have been earned or incurred if no physical loss or damage had occurred,but not including any Net Income that would likely have been earned as a result of an increase in the volume of business due to favorable business conditions caused by the impact of the Covered Cause of Loss on customers or on other businesses; and (ii) Continuing normal operating expenses incurred,including payroll. Ordinary payroll expenses mean payroll expenses for all your exployees except: (a) Officers; (b) Executives; (c) Department Managers; (d) Employees under contract;and (e) Additional Exemptions shown in the Declarations as: (i) Job Classifications; or 00 Employees. Ordinary payroll expenses include: (a) Payroll; (b) Employee benefits, if directly related to payroll; BP0002 1299 Page 5 of 28 7307 BO603228 UNIGARD INSURANCE COMPANYr (c) FICA payments you pay; (d) Union dues you pay; and (e) Workers'compensation premiums. (2) Extended Business Income If the necessary suspension of your "operations" produces a Business Income loss payable under this policy,we will pay for the actual loss of Business Income you incur during the period that: (a) Begins on the date property except finished stock is actually repaired, rebuilt or replaced and "operations" are resumed;and (b) Ends on the earlier of: (i) The date you could restore your "operations", with reasonable speed, to the level which would generate the Business Income amount that would have existed if no direct physical loss or damage had occurred;or (ii) 30 consecutive days after the date determined in (2)(a) above. However, Extended Business Income does not apply to loss of Business Income incurred as a result of unfavorable business conditions caused by the impact of the Covered Cause of Loss in the area where the described premises are located. Loss of Business Income must be caused by direct physical loss or damage at the described premises caused by or resulting from any Covered Cause of Loss. This Additional Coverage is not subject to the Limits of Insurance. g. Extra Expense (1) We will pay necessary Extra Expense you incur during the "period of restoration" that you would not have incurred if there had been no direct physical loss or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss. With respect to loss of or damage to personal property in the open or personal property in a vehicle, the described premises include the area within 100 feet of the site at which the described premises are located. With respect to the requirements set forth in the preceding paragraph, if you occupy only part of the site at which the described premises are located,your premises means: (a) The portion of the building which you rent,lease or occupy;and (b) Any area within the building or on the site at which the described premises are located, if that area services, or is used to gain access to,the described premises. (2) Extra Expense means expense incurred: (a) To avoid or minimize the suspension of business and to continue "operations": (i) At the described premises; or (ii) At replacement premises or at temporary locations, including relocation expenses, and costs to equip and operate the replacement or temporary locations. (b) To minimize the suspension of business if you cannot continue "operations". (c) To: (i) Repair or replace any property;or (ii) Research,replace or restore the lost information on damaged "valuable papers and records": to the extent it reduces the amount of loss that otherwise would have been payable under this Additional Coverage or Additional Coverage f. Business Income. Page 6 of 28 BP0002 1299 �a B0603228 UNIGARD INSURANCE COMPANY We will only pay for Extra Expense that occurs within 12 consecutive months after the date of direct physical loss or damage. This Additional Coverage is not subject to the Limits of Insurance. h. Pollutant Clean Up And Removal We will pay your expense to extract "pollutants" from land or water at the described premises if the discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused by or results from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the earlier of: (1) The date of direct physical loss or damage; or (2) The end of the policy period. The most we will pay for each location under this Additional Coverage is $10,000 for the sum of all such expenses arising out of Covered Causes of Loss occurring during each separate 12 month period of this policy. i. Civil Authority We will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss. The coverage for Business Income will begin 72 hours after the time of that action and will apply for a period of up to three consecutive weeks after coverage begins. The coverage for necessary Extra Expense will begin immediately after the time of that action and ends: (1) 3 consecutive weeks after the time of that action; or (2) When your Business Income coverage ends; whichever is later. The definitions of Business Income and Extra Expense contained in the Business Income and Extra Expense Additional Coverages also apply to this Civil Authority Additional Coverage.The Civil Authority Additional Coverage is not subject to the Limits of Insurance. j. Money Orders And Counterfeit Paper Currency We will pay for loss due to the good faith acceptance of: (1) Any U.S. or Canadian post office, express company, or national or state (or Canadian) chartered bank money order that is not paid upon presentation to the issuer;or (2) Counterfeit United States or Canadian paper currency; in exchange for merchandise, "money" or services or as part of a normal business transaction. The most we will pay for any loss under this Additional Coverage is $1,000. k. Forgery And Alteration (1) We will pay for loss resulting directly from forgery or alteration of, any check, draft, promissory note, bill of exchange or similar written promise of payment in "money",that you or your agent has issued, or that was issued by someone who impersonates you or your agent. (2) If you are sued for refusing to pay the check, draft, promissory note, bill of exchange or similar written promise of payment in "money", on the basis that it has been forged or altered, and you have our written consent to defend against the suit, we will pay for any reasonable legal expenses that you incur in that defense. (3) The most we will pay for any loss, including legal expenses, under this Additional Coverage is $2,500. BP0002 1299 Page 7 of 28 7309 B0603228 UNIGARD INSURANCE COMPANY , I. Increased Cost Of Construction (1) This Additional Coverage applies only to buildings insured on a replacement cost basis. (2) In the event of damage by a Covered Cause of Loss to a building that is Covered Property, we will pay the increased costs incurred to comply with enforcement of an ordinance or law in the course of repair, rebuilding or replacement of damaged parts of that property,subject to the limitations stated in I.Q)through I.(9) of this Additional Coverage. (3) The ordinance or law referred to in I.(2) of this Additional Coverage is an ordinance or law that regulates the construction or repair of buildings or establishes zoning or land use requirements at the described premises, and is in force at the time of loss. (4) Under this Additional Coverage,we will not pay any costs due to an ordinance or law that: (a) You were required to comply with before the loss, even when the building was undamaged; and (b) You failed to comply with. (5) Under this Additional Coverage, we will not pay any costs associated with the enforcement of an ordinance or law which requires any insured or others to test for, monitor, clean up, remove, contain,treat,detoxify or neutralize,or in any way respond to, or assess the effects of "pollutants". (6) The most we will pay under this Additional Coverage, for each described building insured under this Coverage Form, is$5,000. The amount payable under this Additional Coverage is additional insurance. (7) With respect to this Additional Coverage: (a) We will not pay for the Increased Cost of Construction: (i) Until the property is actually repaired or replaced,at the same or another premises;and (ii) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage, not to exceed two years. We may extend this period in writing during the two years. (b) If the building is repaired or replaced at the same premises, or if you elect to rebuild at another premises, the most we will pay for the Increased Cost of Construction is the increased cost of construction at the same premises. (c) If the ordinance or law requires relocation to another premises, the most we will pay for the Increased Cost of Construction is the increased cost of construction at the new premises. (8) This Additional Coverage is not subject to the terms of the Ordinance or Law Exclusion, to the extent that such Exclusion would conflict with the provisions of this Additional Coverage. (9) The costs addressed in the Loss Payment Property Loss Condition in this Coverage Form do not include the increased cost attributable to enforcement of an ordinance or law. The amount payable under this Additional Coverage, as stated in I.(6) of this Additional Coverage, is not subject to such limitation. m. Exterior Building Glass (1) We will pay for direct physical loss of or damage to glass, including lettering or ornamentation,that is part of the exterior of a covered building or structure at the described premises.The glass must be owned by you, or owned by others but in your care, custody or control. We will also pay for necessary: (a) Expenses incurred to put up temporary plates or board up openings; (b) Repair or replacement of encasing frames; and (c) Expenses incurred to remove or replace obstructions. Page 8 of 28 BP0002 1299 73 B0603228 UNIGARD INSURANCE COMPANY (2) Paragraph A.3., Covered Causes Of Loss and Section B., Exclusions do not apply to this Additional Coverage,except for: (a) Paragraph B.1.b., Earth Movement; (b) Paragraph B.1.c.,Governmental Action; (c) Paragraph B.1.d., Nuclear Hazard; (d) Paragraph B.1.f.,War And Military Action; and (e) Paragraph B.1.g.,Water. (3) We will not pay for loss or damage caused by or resulting from: (a) Wear and tear; (b) Hidden or latent defect; (c) Corrosion; or (d) Rust. (4) The most we pay under this Additional Coverage is the Building Limit of Insurance shown in the Declarations. However,if you are a tenant and no Limit of Insurance is shown in the Declarations for Building property,the most we will pay under this Additional Coverage is the Tenant's Exterior Building Glass Limit of Insurance shown in the Declarations. 6. Coverage Extensions In addition to the Limits of Insurance, you may extend the insurance provided by this polity as provided below. Except as otherwise provided, the following Extensions apply to property located in or on the building described in the Declarations or in the open (or in a vehicle)within 100 feet of the described premises, unless a higher Limit of Insurance is shown in the Declarations. a. Personal Property At Newly Acquired Premises (1) You may extend the insurance that applies to Business Personal Property to apply to that property at any premises you acquire. The most we will pay for loss or damage under this Extension is $100,000 at each premises. (2) Insurance under this Extension for each newly acquired premises will end when any of the following first occurs: (a) This polity expires; (b) 30 days expire after you acquire or begin construction at the new premises; or (c) You report values to us. We will charge you additional premium for values reported from the date you acquire the premises. b. Personal Property Off Premises You may extend the insurance that applies to Business Personal Property to apply to covered Business Personal Property, other than "money" and "securities", "valuable papers and records" or accounts receivable, while it is in the course of transit or temporarily at a premises you do not own, lease or operate. The most we will pay for loss or damage under this Extension is $5,000. BP0002 1299 Page 9 of 28 7311 L , B0603228 UNIGARD INSURANCE COMPANY c. Outdoor Property You may extend the insurance provided by this policy to apply to your outdoor fences, radio and television antennas (including satellite dishes), signs (other than signs attached to buildings), trees, shrubs and plants, including debris removal expense, caused by or resulting from any of the following causes of loss: (1) Fire; (2) Lightning; (3) Explosion; (4) Riot or Civil Commotion; or (5) Aircraft. The most we will pay for loss or damage under this Extension is $2,500, but not more than $500 for any one tree,shrub or plant. d. Personal Effects You may extend the insurance that applies to Business Personal Property to apply to personal effects owned by you, your officers,your partners or your employees. This extension does not apply to: (1) Tools or equipment used in your business; or (2) Loss or damage by theft. The most we will pay for loss or damage under this Extension is $2,500 at each described premises. e. "Valuable Papers And Records" (1) You may extend the insurance that applies to Business Personal Property to apply to direct physical loss or damage to "valuable papers and records" that you own, or that are in your care, custody or control caused by or resulting from a Covered Cause of Loss. This Coverage Extension includes the cost to research lost information on "valuable papers and records" for which duplicates do not exist. (2) This Coverage Extension does not apply to: (a) Property held as samples or for delivery after sale; (b) Property in storage away from the premises shown in the Declarations. (3) The most we will pay under this Coverage Extension for loss or damage to "valuable papers and records" in any one occurrence at the described premises is $5,000, unless a higher Limit of Insurance for "valuable papers and records" is shown in the Declarations. For "valuable papers and records" not at the described premises,the most we will pay is $2,500. (4) Section B. Exclusions of this Coverage Form does not apply to this Coverage Extension except for: (a) Paragraph BA.c.,Governmental Action; (b) Paragraph B.1.d., Nuclear Hazard; (c) Paragraph B.1.f.,War And Military Action; (d) Paragraph B.2.f., Dishonesty; (e) Paragraph B.2.g.,False Pretense; (f) Paragraph B.3.;and (g) The Accounts Receivable and "Valuable Papers And Records" Exclusions. Page 10 of 28 BP0002 1299 73 B0603228 UNIGARD INSURANCE COMPANY f. Accounts Receivable (1) You may extend the insurance that applies to Business Personal Property to apply to accounts receivable. We will pay: (a) All amounts due from your customers that you are unable to collect; (b) Interest charges on any loan required to offset amounts you are unable to collect pending our payment of these amounts; (c) Collection expenses in excess of your normal collection expenses that are made necessary by loss or damage; and (d) Other reasonable expenses that you incur to re-establish your records of accounts receivable; that result from direct physical loss or damage by any Covered Cause of Loss to your records of accounts receivable. (2) The most we will pay under this Coverage Extension for loss or damage in any one occurrence at the described premises is $5,000, unless a higher Limit of Insurance for accounts receivable is shown in the Declarations. For accounts receivable not at the described premises,the most we will pay is $2,500. (3) Section B. Exclusions of this Coverage Form does not apply to this Coverage Extension except for: (a) Paragraph B.1.c.,Governmental Action; (b) Paragraph BA A, Nuclear Hazard; (c) Paragraph B.1.f.,War And Military Action; (d) Paragraph B.2.f., Dishonesty; (e) Paragraph B.2.g., False Pretense; (f) Paragraph B.3.; and (g) The Accounts Receivable and "Valuable Papers And Records" Exclusions. B. Exclusions 1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. a. Ordinance Or Law The enforcement of any ordinance or law: (1) Regulating the construction, use or repair of any property;or (2) Requiring the tearing down of any property,including the cost of removing its debris. This exclusion, Ordinance Or Law, applies whether the loss results from: (1) An ordinance or law that is enforced even if the property has not been damaged; or (2) The increased costs incurred to comply with an ordinance or law in the course of construction, repair, renovation, remodeling or demolition of property or removal of its debris, following a physical loss to that property. b. Earth Movement (1) Any earth movement (other than sinkhole collapse), such as an earthquake, landslide, mine subsidence or earth sinking, rising or shifting. But if earth movement results in fire or explosion, we will pay for the loss or damage caused by that fire or explosion. BP0002 1299 Page 11 of 28 7313 BO603228 UNIGARD INSURANCE COMPANY (2) Volcanic eruption, explosion or effusion. But if volcanic eruption, explosion or effusion results in fire, building glass breakage or volcanic action, we will pay for the loss or damage caused by that fire,building glass breakage or volcanic action. Volcanic action means direct loss or damage resulting from the eruption of a volcano when the loss or damage is caused by: (a) Airborne volcanic blast or airborne shock waves; (b) Ash,dust, or particulate matter;or (c) Lava flow. All volcanic eruptions that occur within any 168-hour period will constitute a single occurrence. Volcanic action does not include the cost to remove ash, dust or particulate matter that does not cause direct physical loss of or damage to Covered Property. c. Governmental Action Seizure or destruction of property by order of governmental authority. But we will pay for loss or damage caused by or resulting from acts of destruction ordered by governmental authority and taken at the time of a fire to prevent its spread, if the fire would be covered under this policy. d. Nuclear Hazard Nuclear reaction or radiation,or radioactive contamination, however caused. But if nuclear reaction or radiation, or radioactive contamination, results in fire, we will pay for the loss or damage caused by that fire. e. Power Failure The failure of power or other utility service supplied to the described premises, however caused, if the failure occurs away from the described premises. But if failure of power or other utility service results in a Covered Cause of Loss, we will pay for the loss or damage caused by that Covered Cause of Loss. f. War And Military Action (1) War, including undeclared or civil war; (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. g. Water (1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; (2) Mudslide or mudflow; (3) Water that backs up or overflows from a sewer,drain or sump; or (4) Water under the ground surface pressing on, or flowing or seeping through: (a) Foundations, walls, floors or paved surfaces; (b) Basements, whether paved or not; or (c) Doors,windows or other openings. Page 12 of 28 BP0002 1299 731 . 60603228 UNIGARD INSURANCE COMPANY But if Water, as described in B.1.g.(1)through B.1.g.(4), results in fire, explosion or sprinkler leakage, we will pay for the loss or damage caused by that fire,explosion or sprinkler leakage. 2. We will not pay for loss or damage caused by or resulting from any of the following: a. Electrical Apparatus Artificially generated electrical current, including electric arcing, that disturbs electrical devices, appliances or wires. But if artificially generated electrical current results in fire, we will pay for the loss or damage caused by fire. b. Consequential Losses Delay,loss of use or loss of market. c. Smoke,Vapor,Gas Smoke,vapor or gas from agricultural smudging or industrial operations. d. Steam Apparatus Explosion of steam boilers, steam pipes, steam engines or steam turbines owned or leased by you, or operated under your control. But if explosion of steam boilers, steam pipes, steam engines or steam turbines results in fire or combustion explosion, we will pay for the loss or damage caused by that fire or combustion explosion. We will also pay for loss or damage caused by or resulting from the explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages through which the gases of combustion pass. e. Frozen Plumbing Water,other liquids, powder or molten material that leaks or flows from plumbing, heating, air conditioning or other equipment (except fire protective systems) caused by or resulting from freezing, unless: (1) You do your best to maintain heat in the building or structure;or (2) You drain the equipment and shut off the supply if the heat is not maintained. f. Dishonesty Dishonest or criminal acts by you, anyone else with an interest in the property, or any of your or their partners, employees, directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose: (1) Acting alone or in collusion with others; (2) Whether or not occurring during the hours of employment. This exclusion does not apply to acts of destruction by your employees; but theft by employees is not covered. With respect to accounts receivable and "valuable papers and records",this exclusion does not apply to carriers for hire. g. False Pretense Voluntary parting with any property by you or anyone else to whom you have entrusted the property if induced to do so by any fraudulent scheme, trick, device or false pretense. h. Exposed Property Rain, snow, ice or sleet to personal property in the open. BP0002 1299 Page 13 of 28 7315 B0603228 UNIGARD INSURANCE COMPANY L Collapse Collapse, except as provided in the Additional Coverage for Collapse. But if collapse results in a Covered Cause of Loss, we will pay for the loss or damage caused by that Covered Cause of Loss. j. Pollution We will not pay for loss or damage caused by or resulting from the discharge, dispersal, seepage, migration, release or escape of "pollutants" unless the discharge, dispersal, seepage, migration, release or escape is itself caused by any of the "specified causes of loss". But if the discharge, dispersal, seepage, migration, release or escape of "pollutants" results in a "specified cause of loss", we will pay for the loss or damage caused by that "specified cause of loss". k. Other Types Of Loss (1) Wear and tear; (2) Rust, corrosion,fungus, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself; (3) Smog; (4) Settling, cracking,shrinking or expansion; (5) Nesting or infestation, or discharge or release of waste products or secretions, by insects, birds, rodents or other animals; (6) Mechanical breakdown, including rupture or bursting caused by centrifugal force;or (7) The following causes of loss to personal property; (a) Dampness or dryness of atmosphere; (b) Changes in or extremes of temperature;or (c) Marring or scratching. But if an excluded cause of loss that is listed in B.2.k.(1) through 8.2.k.(7) results in a "specified cause of loss" or building glass breakage, we will pay for the loss or damage caused by that "specified cause of loss" or building glass breakage. 3. We will not pay for loss or damage caused by or resulting from any of the following B.3.a. through B.3.c. But if an excluded cause of loss that is listed in B.3.a. through B.3.c. results in a Covered Cause of Loss, we will pay for the loss or damage caused by that Covered Cause of Loss. a. Weather Conditions Weather conditions. But this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in Paragraph 1. above to produce the loss or damage. b. Acts Or Decisions Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body. c. Negligent Work Faulty, inadequate or defective: (1) Planning, zoning,development, surveying, siting; (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; (3) Materials used in repair,construction, renovation or remodeling;or (4) Maintenance; of part or all of any property on or off the described premises. Page 14 of 28 BP0002 1299 73 • B0603228 UNIGARD INSURANCE COMPANY 4. Business Income And Extra Expense Exclusions We will not pay for: a. Any Extra Expense, or increase of Business Income loss, caused by or resulting from: (1) Delay in rebuilding, repairing or replacing the property or resuming "operations", due to interference at the location of the rebuilding, repair or replacement by strikers or other persons; or (2) Suspension, lapse or cancellation of any license, lease or contract. But if the suspension, lapse or cancellation is directly caused by the suspension of "operations",we will cover such loss that affects your Business Income during the "period of restoration". b. Any other consequential loss. 5. Accounts Receivable And"Valuable Papers And Records"Exclusions The following additional exclusions apply to the Accounts Receivable and "Valuable Papers And Records" Coverage Extensions: a. We will not pay for loss or damage caused by or resulting from electrical or magnetic injury, disturbance or erasure of electronic recordings that is caused by or results from: (a) Programming errors or faulty machine instructions; (b) Faulty installation or maintenance of data processing equipment or component parts; But we will pay for direct loss or damage caused by lightning. b. Applicable to "Valuable Papers and Records" only: We will not pay for loss or damage caused by or resulting from any of the following: (1) Errors or omissions in processing or copying. But if errors or omissions in processing or copying results in fire or explosion, we will pay for the direct loss or damage caused by the fire or explosion. (2) Wear and tear,gradual deterioration or latent defect. c. Applicable to Accounts Receivable only: We will not pay for: (1) Loss or damage caused by or resulting from alteration, falsification, concealment or destruction of records of accounts receivable done to conceal the wrongful giving, taking or withholding of "money", "securities" or other property. This exclusion applies only to the extent of the wrongful giving, taking or withholding. (2) Loss or damage caused by or resulting from bookkeeping, accounting or billing errors or omissions. (3) Any loss or damage that requires any audit of records or any inventory computation to prove its factual existence. C. Limits Of Insurance 1. The most we will pay for loss or damage in any one occurrence is the applicable Limit of Insurance shown in the Declarations. 2. The most we will pay for loss of or damage to outdoor signs attached to buildings is $1,000 per sign in any one occurrence. 3. The limits applicable to the Coverage Extensions and the Fire Department Service Charge and Pollutant Clean Up and Removal Additional Coverages are in addition to the Limits of Insurance. 4. Building Limit- Automatic Increase a. The Limit of Insurance for Buildings will automatically increase by the annual percentage shown in the Declarations. BP0002 1299 Page 15 of 28 7317 B0603228 UNIGARD INSURANCE COMPANY b. The amount of increase will be: (1) The Building limit that applied on the most recent of the policy inception date, the policy anniversary date, or any other policy change amending the Building limit, times (2) The percentage of annual increase shown in the Declarations, expressed as a decimal (example: 8% is .08), times (3) The number of days since the beginning of the current policy year of the effective date of the most recent policy change amending the Building limit, divided by 365. Example: If: The applicable Building limit is $100,000. The annual percentage increase is 8%. The number of days since the beginning of the policy year(or last policy change) is 146. The amount of increase is $100,000 x .08 x 146=365 =$3,200. 5. Business Personal Property Limit-Seasonal Increase a. The Limit of Insurance for Business Personal Property will automatically increase by 25% to provide for seasonal variations. b. This increase will apply only if the Limit of Insurance shown for Business Personal Property in the Declarations is at least 100% of your average monthly values during the lesser of: (1) The 12 months immediately preceding the date the loss or damage occurs;or (2) The period of time you have been in business as of the date the loss or damage occurs. D. Deductibles 1. We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds the Deductible shown in the Declarations. We will then pay the amount of loss or damage in excess of the Deductible up to the applicable Limit of Insurance. 2. Regardless of the amount of the Deductible, the most we will deduct from any loss or damage under all of the following Optional Coverages and the Additional Coverage - Exterior Building Glass in any one occurrence is the Optional Coverage/Exterior Building Glass Deductible shown in the Declarations; a. Money and Securities; b. Employee Dishonesty; c. Interior Glass; and d. Outdoor Signs. But this Optional Coverage/Exterior Building Glass Deductible will not increase the Deductible shown in the Declarations. This Deductible will be used to satisfy the requirements of the Deductible in the Declarations. 3. No deductible applies to the following Additional Coverages: a. Fire Department Service Charge; b. Business Income; c. Extra Expense; and d. Civil Authority. E. Property Loss Conditions 1. Abandonment There can be no abandonment of any property to us. Page 16 of 28 8P0002 1299 73 B0603228 UNIGARD INSURANCE COMPANY 2. Appraisal If we and you disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will: a. Pay its chosen appraiser; and b. Bear the other expenses of the appraisal and umpire equally. If there is an appraisal,we will still retain our right to deny the claim. 3. Duties In The Event Of Loss Or Damage a. You must see that the following are done in the event of loss or damage to Covered Property: (1) Notify the police if a law may have been broken. (2) Give us prompt notice of the loss or damage. Include a description of the property involved. (3) As soon as possible, give us a description of how, when and where the loss or damage occurred. (4) Take all reasonable steps to protect the Covered Property from further damage, and keep a record of your expenses necessary to protect the Covered Property, for consideration in the settlement of the claim. This will not increase the Limit of Insurance. However, we will not pay for any subsequent loss or damage resulting from a cause of loss that is not a Covered Cause of Loss. Also, if feasible, set the damaged property aside and in the best possible order for examination. (5) At our request, give us complete inventories of the damaged and undamaged property. Include quantities, costs,values and amount of loss claimed. (6) As often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records. Also permit us to take samples of damaged and undamaged property for inspection, testing and analysis, and permit us to make copies from your books and records. (7) Send us a signed, sworn proof of loss containing the information we request to investigate the claim. You must do this within 60 days after our request. We will supply you with the necessary forms. (8) Cooperate with us in the investigation or settlement of the claim. (9) Resume all or part of your "operations" as quickly as possible. b. We may examine any insured under oath, while not in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured's books and records. In the event of an examination, an insured's answers must be signed. 4. Legal Action Against Us No one may bring a legal action against us under this insurance unless: a. There has been full compliance with all of the terms of this insurance; and b. The action is brought within 2 years after the date on which the direct physical loss or damage occurred. 5. Limitation -Electronic Media And Records We will not pay for any loss of Business Income caused by direct physical loss of or damage to Electronic Media and Records after the longer of: a. 60 consecutive days from the date of direct physical loss or damage;or b. The period, beginning with the date of direct physical loss or damage, necessary to repair, rebuild or replace with reasonable speed and similar quality, other property at the described premises due to loss or damage caused by the same occurrence. BP0002 1299 Page 17 of 28 7319 L , B0603228 UNIGARD INSURANCE COMPANY Electronic Media and Records are: (1) Electronic data processing, recording or storage media such as films,tapes, discs,drums or cells; (2) Data stored on such media; or (3) Programming records used for electronic data processing or electronically controlled equipment. Example No. 1: A Covered Cause of Loss damages a computer on June 1. It takes until September 1 to replace the computer, and until October 1 to restore the data that was lost when the damage occurred. We will only pay for the Business Income loss sustained during the period June 1 - September 1. Loss during the period September 2 - October 1 is not covered. Example No. 2: A Covered Cause of Loss results in the loss of data processing programming records on August 1. The records are replaced on October 15. We will only pay for the Business Income loss sustained during the period August 1 - September 29 (60 consecutive days). Loss during the period September 30 - October 15 is not covered. 6. Loss Payment In the event of loss or damage covered by this policy: a. At our option, we will either: (1) Pay the value of lost or damaged property; (2) Pay the cost of repairing or replacing the lost or damaged property; (3) Take all or any part of the property at an agreed or appraised value; or (4) Repair, rebuild or replace the property with other property of like kind and quality, subject to d.(1)(e) below. b. We will give notice of our intentions within 30 days after we receive the sworn proof of loss. c. We will not pay you more than your financial interest in the Covered Property. d. Except as provided in (2)through (8) below, we will determine the value of Covered Property as follows: (1) At replacement cost without deduction for depreciation, subject to the following: (a) If, at the time of loss, the Limit of Insurance on the lost or damaged property is 80% or more of the full replacement cost of the property immediately before the loss, we will pay the cost to repair or replace,after application of the deductible and without deduction fo depreciation, but not more than the least of the following amounts: (i) The Limit of Insurance under this policy that applies to the lost or damaged property; (ii) The cost to replace, on the same premises, the lost or damaged property with other property: L Of comparable material and quality; and ii. Used for the same purpose; or (iii) The amount that you actually spend that is necessary to repair or replace the lost or damaged property. (b) If,at the time of loss, the Limit of Insurance applicable to the lost or damaged property is less than 80% of the full replacement cost of the property immediately before the loss, we will pay the greater of the following amounts, but not more than the Limit of Insurance that applies to the property: Page 18 of 28 BP0002 1299 73: . BO603228 UNIGARD INSURANCE COMPANY (i) The actual cash value of the lost or damaged property;or (ii) A proportion of the cost to repair or replace the lost or damaged property,after application of the deductible and without deduction for depreciation. This proportion will equal the ratio of the applicable Limit of Insurance to 80% of the cost of repair or replacement. (c) You may make a claim for loss or damage covered by this insurance on an actual cash value basis instead of on a replacement cost basis. In the event you elect to have loss or damage settled on an actual cash value basis, you may still make a claim on a replacement cost basis if you notify us of your intent to do so within 180 days after the loss or damage. (d) We will not pay on a replacement cost basis for any loss or damage: (i) Until the lost or damaged property is actually repaired or replaced;and (ii) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage. (e) The cost to repair, rebuild or replace does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property. (2) If the "Actual Cash Value - Buildings" option applies, as shown in the Declarations, Paragraph (1) above does not apply to Buildings. Instead, we will determine the value of Buildings at actual cash value. (3) The following property at actual cash value: (a) Used or second-hand merchandise held in storage or for sale; (b) Property of others, but this property is not covered for more than the amount for which you are liable, plus the cost of labor, materials or services furnished or arranged by you on personal property of others; (c) Household contents, except personal property in apartments or rooms furnished by you as landlord. (d) Manuscripts; (e) Works of art, antiques or rare articles, including etchings, pictures, statuary, marbles, bronzes, porcelains and bric-a-brac. (4) Glass at the cost of replacement with safety glazing material if required by law. (5) Tenants' Improvements and Betterments at: (a) Replacement cost if you make repairs promptly. (b) A proportion of your original cost if you do not make repairs promptly. We will determine the proportionate value as follows: (i) Multiply the original cost by the number of days from the loss or damage to the expiration of the lease; and (ii) Divide the amount determined in (i) above by the number of days from the installation of improvements to the expiration of the lease. If your lease contains a renewal option, the expiration of the renewal option period will replace the expiration of the lease in this procedure. (c) Nothing if others pay for repairs or replacement. (6) "Valuable papers and records", including those which exist on electronic or magnetic media (other than prepackaged software programs),at the cost of: (a) Blank materials for reproducing the records;and (b) Labor to transcribe or copy the records. BP0002 1299 Page 19 of 28 7321 B0603228 UNIGARD INSURANCE COMPANY This condition does not apply to "valuable papers and records" that are actually replaced or restored. (7) Applicable only to the Optional Coverages: (a) "Money" at its face value; and (b) "Securities" at their value at the close of business on the day the loss is discovered. (8) Applicable only to Accounts Receivable: (a) If you cannot accurately establish the amount of accounts receivable outstanding as of the time of loss or damage: (i) We will determine the total of the average monthly amounts of accounts receivable for the 12 months immediately preceding the month in which the loss or damage occurs;and (ii) We will adjust that total for any normal fluctuations in the amount of accounts receivable for the month in which the loss or damage occurred or for any demonstrated variance from the average for that month. (b) The following will be deducted from the total amount of accounts receivable, however that amount is established: (i) The amount of the accounts for which there is no loss or damage; (ii) The amount of the accounts that you are able to re-establish or collect; (iii) An amount to allow for probable bad debts that you are normally unable to collect; and (iv) All unearned interest and service charges. e. Our payment for loss of or damage to personal property of others will only be for the account of the owners of the property. We may adjust losses with the owners of lost or damaged property if other than you. If we pay the owners, such payments will satisfy your claims against us for the owners' property. We will not pay the owners more than their financial interest in the Covered Property. f. We may elect to defend you against suits arising from claims of owners of property.We will do this at our expense. g. We will pay for covered loss or damage within 30 days after we receive the sworn proof of loss, provided you have complied with all of the terms of this polity, and (1) We have reached agreement with you on the amount of loss; or (2) An appraisal award has been made. 7. Recovered Property If either you or we recover any property after loss settlement, that party must give the other prompt notice. At your option, you may retain the property. But then you must return to us the amount we paid to you for the property.We will pay recovery expenses and the expenses to repair the recovered property,subject to the Limit of Insurance. 8. Resumption Of Operations We will reduce the amount of your: a. Business Income loss, other than Extra Expense, to the extent you can resume your "operations", in whole or in part, by using damaged or undamaged property (including merchandise or stock) at the described premises or elsewhere. b. Extra Expense loss to the extent you can return "operations" to normal and discontinue such Extra Expense. Page 20 of 28 SP0002 1299 732 B0603228 UNIGARD INSURANCE COMPANY 9. Vacancy a. Description Of Terms (1) As used in this Vacancy Condition, the term building and the term vacant have the meanings set forth in (1)(a)and(1)(b) below: (a) When this policy is issued to a tenant, and with respect to that tenant's interest in Covered Property, building means the unit or suite rented or leased to the tenant. Such building is vacant when it does not contain enough business personal property to conduct customary operations. (b) When this polity is issued to the owner of a building, building means the entire building. Such building is vacant when 70% or more of its total square footage: (i) Is not rented; or (ii) Is not used to conduct customary operations. (2) Buildings under construction or renovation are not considered vacant. b. Vacancy Provisions If the building where loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage occurs: (1) We will not pay for any loss or damage caused by any of the following even if they are Covered Causes of Loss: (a) Vandalism; (b) Sprinkler leakage, unless you have protected the system against freezing; (c) Building glass breakage; (d) Water damage; (e) Theft; or (f) Attempted theft. (2) With respect to Covered Causes of Loss other than those listed in b.(1)(a) through b.(1)(f) above, we will reduce the amount we would otherwise pay for the loss or damage by 15%. F. Property General Conditions 1. Control Of Property Any act or neglect of any person other than you beyond your direction or control will not affect this insurance. The breach of any condition of this Coverage Form at any one or more locations will not affect coverage at any location where, at the time of loss or damage,the breach of condition does not exist. 2. Mortgageholders a. The term "mortgageholder" includes trustee. b. We will pay for covered loss of or damage to buildings or structures to each mortgageholder shown in the Declarations in their order of precedence,as interests may appear. c. The mortgageholder has the right to receive loss payment even if the mortgageholder has started foreclosure or similar action on the building or structure. d. If we deny your claim because of your acts or because you have failed to comply with the terms of this policy,the mortgageholder will still have the right to receive loss payment if the mortgageholder: (1) Pays any premium due under this policy at our request if you have failed to do so; 6P0002 1299 Page 21 of 28 7323 B0603228 UNIGARD INSURANCE COMPANY (2) Submits a signed, sworn proof of loss within 60 days after receiving notice from us of your failure to do so; and (3) Has notified us of any change in ownership, occupancy or substantial change in risk known to the mortgageholder. All of the terms of this polity will then apply directly to the mortgageholder. e. If we pay the mortgageholder for any loss or damage and deny payment to you because of your acts or because you have failed to comply with the terms of this policy: (1) The mortgageholder's rights under the mortgage will be transferred to us to the extent of the amount we pay; and (2) The mortgageholder's right to recover the full amount of the mortgageholder's claim will not be impaired. At our option, we may pay to the mortgageholder the whole principal on the mortgage plus any accrued interest. In this event,your mortgage and note will be transferred to us and you will pay your remaining mortgage debt to us. f. If we cancel this policy,we will give written notice to the mortgageholder at least: (1) 10 days before the effective date of cancellation if we cancel for your nonpayment of premium;or (2) 30 days before the effective date of cancellation if we cancel for any other reason. g. If we elect not to renew this polity, we will give written notice to the mortgageholder at least 10 days before the expiration date of this polity. 3. No Benefit To Bailee No person or organization, other than you, having custody of Covered Property will benefit from this insurance. 4. Policy Period, Coverage Territory Under this form: a. We cover loss or damage commencing: (1) During the policy period shown in the Declarations;and (2) Within the coverage territory or,with respect to property in transit,while it is between points in the coverage territory. b. The coverage territory is: (1) The United States of America(including its territories and possessions); (2) Puerto Rico; and (3) Canada. G. Optional Coverages If shown as applicable in the Declarations, the following Optional Coverages also apply. These coverages are subject to the terms and conditions applicable to property coverage in this policy, except as provided below. 1. Outdoor Signs a. We will pay for direct physical loss of or damage to all outdoor signs at the described premises: (1) Owned by you; or (2) Owned by others but in your care,custody or control. Page 22 of 28 BP0002 1299 73: B0603228 UNIGARD INSURANCE COMPANY b. Paragraph A.3., Covered Causes Of Loss, and Section B., Exclusions, do not apply to this Optional Coverage,except for: (1) Paragraph B.1.c.,Governmental Action; (2) Paragraph B.1.d., Nuclear Hazard;and (3) Paragraph B.1.f.,War And Military Action. c. We will not pay for loss or damage caused by or resulting from: (1) Wear and tear; (2) Hidden or latent defect; (3) Rust; (4) Corrosion; or (5) Mechanical breakdown. d. The most we will pay for loss or damage in any one occurrence is the Limit of Insurance for Outdoor Signs shown in the Declarations. e. The provisions of this Optional Coverage supersede all other references to outdoor signs in this policy. 2. Interior Glass a. We will pay for direct physical loss of or damage to items of glass that are permanently affixed to the interior walls, floors or ceilings of a covered building or structure at the described premises, provided each item is: (1) Described in the Declarations as covered under this Optional Coverage;and (2) Located in the basement or ground floor level of the building or structure, unless the Declarations show that this Optional Coverage is applicable to interior glass at all floors; and (3) Owned by you, or owned by others but in your care,custody or control. b. We will also pay for necessary: (1) Expenses incurred to put up temporary plates or board up openings; (2) Repair or replacement of encasing frames;and (3) Expenses incurred to remove or replace obstructions. c. Paragraph A.3., Covered Causes Of Loss, and Section B., Exclusions, do not apply to this Optional Coverage,except for: (1) Paragraph B.1.c.,Governmental Action; (2) Paragraph B.1.d., Nuclear Hazard;and (3) Paragraph B.1.f.,War And Military Action. d. We will not pay for loss or damage caused by or resulting from: (1) Wear and tear; (2) Hidden or latent defect; (3) Corrosion; or (4) Rust. e. This Optional Coverage supersedes all limitations in this polity that apply to interior glass. SP0002 1299 Page 23 of 28 7325 B0603228 UNIGARD INSURANCE COMPANY 3. Money And Securities a. We will pay for loss of "money" and "securities" used in your business while at a bank or savings institution, within your living quarters or the living quarters of your partners or any employee having use and custody of the property, at the described premises, or in transit between any of these places, resulting directly from: (1) Theft, meaning any act of stealing; (2) Disappearance;or (3) Destruction. b. In addition to the Limitations and Exclusions applicable to property coverage,we will not pay for loss: (1) Resulting from accounting or arithmetical errors or omissions; (2) Due to the giving or surrendering of property in any exchange or purchase;or (3) Of property contained in any "money"-operated device unless the amount of "money" deposited in it is recorded by a continuous recording instrument in the device. c. The most we will pay for loss in any one occurrence is: (1) The limit shown in the Declarations for Inside the Premises for "money" and "securities" while: (a) In or on the described premises;or (b) Within a bank or savings institution; and (2) The limit shown in the Declarations for Outside the Premises for "money" and "securities" while anywhere else. d. All loss: (1) Caused by one or more persons;or (2) Involving a single act or series of related acts; is considered one occurrence. e. You must keep records of all "money" and "securities" so we can verify the amount of any loss or damage. 4. Employee Dishonesty a. We will pay for direct loss of or damage to Business Personal Property and "money" and "securities" resulting from dishonest acts committed by any of your employees acting alone or in collusion with other persons (except you or your partner)with the manifest intent to: (1) Cause you to sustain loss or damage;and also (2) Obtain financial benefit (other than salaries, commissions, fees, bonuses, promotions, awards, profit sharing, pensions or other employee benefits earned in the normal course of employment)for: (a) Any employee;or (b) Any other person or organization. b. We will not pay for loss or damage: (1) Resulting from any dishonest or criminal act that you or any of your partners commit whether acting alone or in collusion with other persons. (2) The only proof of which as to its existence or amount is: (a) An inventory computation;or (b) A profit and loss computation. Page 24 of 28 BP0002 1299 732 B0603228 UNIGARD INSURANCE COMPANY C. The most we will pay for loss or damage in any one occurrence is the Limit of Insurance for Employee Dishonesty shown in the Declarations. d. All loss or damage: (1) Caused by one or more persons;or (2) Involving a single act or series of related acts; is considered one occurrence. e. We will pay only for loss or damage you sustain through acts committed or events occurring during the Policy Period. Regardless of the number of years this polity remains in force or the number of premiums paid, no Limit of Insurance cumulates from year to year or period to period. f. This Optional Coverage does not apply to any employee immediately upon discovery by: (1) You; or (2) Any of your partners,officers or directors not in collusion with the employee; of any dishonest act committed by that employee before or after being hired by you. g. We will pay only for covered loss or damage discovered no later than one year from the end of the Policy Period. h. If you (or any predecessor in interest) sustained loss or damage during the period of any prior insurance that you could have recovered under that insurance except that the time within which to discover loss or damage had expired,we will pay for it under this Optional Coverage,provided: (1) This Optional Coverage became effective at the time of cancellation or termination of the prior insurance;and (2) The loss or damage would have been covered by this Optional Coverage had it been in effect when the acts or events causing the loss or damage were committed or occurred. i. The insurance under Paragraph h. above is part of, not in addition to, the Limit of Insurance applying to this Optional Coverage and is limited to the lesser of the amount recoverable under: (1) This Optional Coverage as of its effective date; or (2) The prior insurance had it remained in effect. 5. Mechanical Breakdown a. We will pay for direct damage to Covered Property caused by an Accident to an Object. The Object must be: (1) Owned by you or in your care,custody or control;and (2) At the described premises. b. Accident means a sudden and accidental breakdown of the Object or a part of the Object. At the time the breakdown occurs, it must manifest itself by physical damage to the Object that necessitates repair or replacement. c. None of the following is an Accident: (1) Depletion, deterioration,corrosion or erosion; (2) Wear and tear; (3) Leakage at any valve, fitting, shaft seal, gland packing,joint or connection; (4) Breakdown of any vacuum tube, gas tube or brush; (5) Breakdown of any electronic computer or electronic data processing equipment; BP0002 1299 Page 25 of 28 7327 � 2 B0603228 UNIGARD INSURANCE COMPANY (6) Breakdown of any structure or foundation supporting the Object or any of its parts; (7) The functioning of any safety or protective device; or (8) The explosion of gases or fuel within the furnace of any Object or within the flues or passages through which the gases of combustion pass. d. Object means any of the following equipment: (1) Boiler and Pressure Vessels: (a) Steam heating boilers and condensate return tanks used with them; (b) Hot water heating boilers and expansion tanks used with them; (c) Hot water supply boilers; (d) Other fired or unfired vessels used for maintenance or service of the described premises but not used for processing or manufacturing; (e) Steam boiler piping, valves, fittings,traps and separators,but only if they: (i) Are on your premises or between parts of your premises; (ii) Contain steam or condensate of steam;and (iii) Are not part of any other vessel or apparatus; (f) Feed water piping between any steam boiler and a feed pump or injector. (2) Air Conditioning Units - Any air conditioning unit that has a capacity of 60,000 Btu or more, including: (a) Inductors,convectors and coils that make use of a refrigerant and form part of a cooling, humidity control or space heating system; (b) Interconnecting piping, valves and fittings containing only a refrigerant, water, brine or other solution; (c) Vessels heated directly or indirectly that: (i) Form part of an absorption type system; and (ii) Function as a generator,regenerator or concentrator; (d) Compressors, pumps, fans and blowers used solely with the system together with their driving electric motors;and (e) Control equipment used solely with the system. e. Object does not mean: (1) As Boiler and Pressure Vessels: (a) Equipment that is not under internal vacuum or internal pressure other than weight of contents; (b) Boiler settings; (c) Insulating or refractory material;or (d) Electrical,reciprocating or rotating apparatus within or forming a part of the boiler or vessel. (2) As Air Conditioning Units, any: (a) Vessel, cooling tower, reservoir or other source of cooling water for a condenser or compressor, or any water piping leading to or from that source;or (b) Wiring or piping leading to or from the unit. f. We will not pay for an Accident to any Object while being tested. Page 26 of 28 BP0002 1299 73: B0603228 UNIGARD INSURANCE COMPANY g. Suspension Whenever an Object is found to be in, or exposed to, a dangerous condition, any of our representatives may immediately suspend the insurance against loss from an Accident to that Object. This can be done by delivering or mailing a written notice of suspension to: (1) Your last known address; or (2) The address where the Object is located. If we suspend your insurance, you will get a pro rata refund of premium. But the suspension will be effective even if we have not yet made or offered a refund. H. Property Definitions 1. "Money" means: a. Currency,coins and bank notes in current use and having a face value; and b. Travelers checks,register checks and money orders held for sale to the public. 2. "Operations" means your business activities occurring at the described premises. 3. "Period of restoration" means the period of time that: a. Begins: (1) 72 hours after the time of direct physical loss or damage for Business Income Coverage;or (2) Immediately after the time of direct physical loss or damage for Extra Expense Coverage; caused by or resulting from any Covered Cause of Loss at the described premises;and b. Ends on the earlier of: (1) The date when the property at the described premises should be repaired, rebuilt or replaced with reasonable speed and similar quality; or (2) The date when business is resumed at a new permanent location. "Period of restoration" does not include any increased period required due to the enforcement of any ordinance or law that: (1) Regulates the construction, use or repair,or requires the tearing down of any property;or (2) Requires any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize,or in any way respond to or assess the effects of "pollutants". The expiration date of this policy will not cut short the "period of restoration". 4. "Pollutants" means 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. 5. "Securities" means negotiable and non-negotiable instruments or contracts representing either "money" or other property and includes: a. Tokens,tickets, revenue and other stamps (whether represented by actual stamps or unused value in a meter) in current use; and b. Evidences of debt issued in connection with credit or charge cards,which cards are not issued by you; but does not include "money". 6. "Specified Causes of Loss" means the following: Fire; lightning; explosion, windstorm or hail; smoke, aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment;sinkhole collapse;volcanic action;falling objects; weight of snow, ice or sleet;water damage. BP0002 1299 Page 27 of 28 7329 T B0603228 UNIGARD INSURANCE COMPANY a. Sinkhole collapse means the sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite. This cause of loss does not include: (1) The cost of filling sinkholes; or (2) Sinking or collapse of land into manmade underground cavities. b. Falling objects does not include loss of or damage to: (1) Personal property in the open; or (2) The interior of a building or structure,or property inside a building or structure,unless the roof or an outside wall of the building or structure is first damaged by a falling object. c. Water damage means accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of any part of a system or appliance (other than a sump system including its related equipment and parts)containing water or steam. 7. "Valuable papers and records" means inscribed, printed, or written: a. Documents; b. Manuscripts; and c. Records; including abstracts,books, deeds, drawings, films, maps or mortgages. But "valuable papers and records" does not mean: d. "Money" or "Securities"; e. Converted Data; f. Programs or instructions used in your data processing operations, including the materials on which the data is recorded. Page 28 of 28 SP0002 1299 73'. BUSINESSOWNERS BUSINESSOWNERS LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire polity 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. 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 C - Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section F - Liability And Medical Expenses Definitions. A. Coverages 1. Business Liability a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage", "personal injury" or "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 "bodily injury", "property damage", "personal injury", or "advertising injury" 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 D - Liability And Medical Expenses 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 or medical expenses. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Coverage Extension - Supplementary Payments. b. This insurance applies: (1) To "bodily injury" and "property damage" only if: (a) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory";and (b) The "bodily injury" or "property damage" occurs during the polity period. (2) To: (a) "Personal injury" caused by an offense arising out of your business, excluding advertising, publishing, broadcasting or telecasting done by or for you; (b) "Advertising injury" caused by an offense committed in the course of advertising your goods, products or services; but only if the offense was committed in the "coverage territory" during the policy period. c. 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". d. Coverage Extension - Supplementary Payments In addition to the Limit of Insurance we will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: BP0006 0197 Copyright, Insurance Services Office, Inc., 1997 Page 1 of 16 7331 B0603228 UNIGARD INSURANCE COMPANY (1) All expenses we incur. (2) 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 Business Liability Coverage for "bodily injury" applies. We do not have to furnish these bonds. (3) The cost of bonds to release attachments, but only for bond amounts within our Limit of Insurance. We do not have to furnish these bonds. (4) 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. (5) All costs taxed against the insured in the "suit". (6) Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the Limit of Insurance, we will not pay any prejudgment interest based on that period of time after the offer. (7) 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 our Limit of insurance. 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 B.1.b.(2) of Exclusions, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the limits of insurance. Page 2 of 16 BP0006 0197 73. i B0603228 UNIGARD INSURANCE COMPANY Our obligation to defend an insured's indemnitee and to pay for attorney's 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. 2. Medical Expenses 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: (a) The accident takes place in the "coverage territory" and during the polity period; (b) The expenses are incurred and reported to us within one year of the date of the accident; and (c) 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 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. B. Exclusions 1. Applicable To Business Liability Coverage 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. SP0006 0197 Page 3 of 16 7333 • T BO603228 UNIGARD INSURANCE COMPANY c. Liquor Liability "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 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: (a) Whether the insured may be liable as an employer or in any other capacity; and (b) To any obligation to share damages with or repay someone else who must pay damages because of 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; (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 any insured or 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: (i) If the pollutants are brought on or to the premises, site or location in connection with such operations by such insured,contractor or subcontractor;or (ii) 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. Page 4 of 16 BP0006 0197 733 S M B0603228 UNIGARD INSURANCE COMPANY Subparagraph(d)(i) does not apply to "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 fuels, lubricants or other operating fluids are intentionally discharged, dispersed or released, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent to be discharged, dispersed or released as part of the operations being performed by such insured, contractor or subcontract or. Subparagraphs(a) and (d)(i) do not apply to "bodily injury" or "property damage" arising out of heat, smoke or fumes from a hostile fire. As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be. (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 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. Pollutants means 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. 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 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 following equipment: (a) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (b) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing 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 BP0006 0197 Page 5 of 16 7335 r � B0603228 UNIGARD INSURANCE COMPANY (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. j. Professional Services "Bodily injury", "property damage", "personal injury" or "advertising injury" due to rendering or failure to render any professional service. This includes but is not limited to: (1) Legal, accounting or advertising services; (2) Preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders,designs or specifications; (3) Supervisory,inspection or engineering services; (4) Medical, surgical,dental, x-ray or nursing services treatment,advice or instruction; (5) Any health or therapeutic service treatment,advice or instruction; (6) Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming; (7) Optometry or optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices; (8) Body piercing services; and (9) Services in the practice of pharmacy; but this exclusion does not apply to an insured whose operations include those of a retail druggist or drugstore. k. Damage To Property "Property damage" to: (1) Property you own, rent or occupy; (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 contractor or subcontractor working directly or indirectly on your behalf is 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. 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". i. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. Page 6 of 16 BP0006 0197 733 r B0603228 UNIGARD INSURANCE COMPANY m. 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. n. 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. o. 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. p. Personal Or Advertising Injury "Personal injury" or "advertising injury (1) Arising out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity; (2) Arising out of oral or written publication of material whose first publication took place before the beginning of the policy period; (3) Arising out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured; (4) 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;or (5) Arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time. (6) With respect to 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 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. BP0006 0197 Page 7 of 16 7337 BO603228 UNIGARD INSURANCE COMPANY Pollutants means 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. q. Advertising Injury "Advertising injury" arising out of: (1) Breach of contract,other than misappropriation of advertising ideas under an implied contract; (2) The failure of goods, products or services to conform with advertised quality or performance; (3) The wrong description of the price of goods, products or services;or (4) An offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting. Exclusions c., d., e., f., g., h., L, k., I., m., n. and o. do not apply to damage by fire or explosion 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 D., Limits of Insurance. 2. Applicable to Medical Expenses Coverage We will not pay expenses for "bodily injury": a. To any insured. b. To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. To a person injured on that part of premises you own or rent that the person normally occupies. d. 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. To a person injured while taking part in athletics. f. Included within the "products-completed operations hazard". g. Excluded under Business Liability Coverage. h. Due to war, whether or not declared, or any act or condition incident to war. War includes civil war, insurrection, rebellion or revolution. 3. Applicable To Both Business Liability Coverage And Medical Expenses Coverage- Nuclear Energy Liability Exclusion This insurance does not apply: a. Under Business Liability Coverage,to "bodily injury" or "property damage": (1) With respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or (2) Resulting from the "hazardous properties" of "nuclear material" and with respect to which: (a) Any person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof; or (b) The insured is, or had this policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America,or any agency thereof,with any person or organization. b. Under Medical Expenses Coverage, to expenses incurred with respect to "bodily injury" resulting from the "hazardous properties" of "nuclear material" and arising out of the operation of a "nuclear facility" by any person or organization. Page 8 of 16 BP0006 0197 73: BO603228 UNIGARD INSURANCE COMPANY c. Under Business liability Coverage, to "bodily injury" or "property damage" resulting from the "hazardous properties" of the "nuclear material";if: (1) The "nuclear material": (a) Is at any "nuclear facility" owned by, or operated by or on behalf of,an insured;or (b) Has been discharged or dispersed therefrom; (2) The "nuclear material" is contained in "spent fuel" or "waste" at any time possessed, handled, used, processed, stored,transported or disposed of by or on behalf of an insured; or (3) The "bodily injury" or "property damage" arises out of the furnishing by an insured of services, materials,parts or equipment in connection with the planning, construction, maintenance,operation or use of any "nuclear facility"; but if such facility is located within the United States of America, its territories or possessions or Canada, this Exclusion (3) applies only to "property damage" to such "nuclear facility" and any property thereat. As used in this exclusion: "By-product material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof; "Hazardous properties" include radioactive,toxic or explosive properties; "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 material" means "source material", "special nuclear material" or "by-product material"; "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. "Source material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof; "Special nuclear material" has the meaning given it 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 BP0006 0197 Page 9 of 16 7339 B0603228 UNIGARD INSURANCE COMPANY (b) Resulting from the operation by any person or organization of any "nuclear facility" included under Paragraphs(a) and (b) of the definition of "nuclear facility". C. 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. 2. Each of the following is also an insured: a. 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" is an insured for: (1) "Bodily injury" or "personal 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), or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co-"employee" 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 of the injury described in Paragraphs (1)(a)or(1)(b);or (d) Arising out of his or her providing or failing to provide professional health care services. However, if you have "employees" who are pharmacists in your retail druggist or drugstore operation, they are insured with respect to their providing or failing to provide professional health care services;or (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", 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 any organization while acting as your real estate manager. 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. Page 10 of 16 BP0006 0197 734( BO803228 UNIGARD INSURANCE COMPANY 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 policy. 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. 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. D. Liability And Medical Expenses 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 most we will pay for the sum of all damages because of all: a. "Bodily injury", "property damage" and medical expenses arising out of any one "occurrence";and b. "Personal injury" and "advertising injury" sustained by any one person or organization; is the Liability and Medical Expenses limit shown in the Declarations. But the most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses limit shown in the Declarations. 3. The most we will pay under Business Liability Coverage for damages because of "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of any one fire or explosion is the Fire Legal Liability limit shown in the Declarations. 4. Aggregage Limits The most we will pay for: a. Injury or damage under the "products-completed operations hazard" arising from all "occurrences" during the polity period is the Liability and Medical Expenses limit; and b. All other injury or damage, including medical expenses, arising from all "occurrences" during the policy period is twice the Liability and Medical Expenses limit. This limitation does not apply to "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire or explosion. The Limits of Insurance of this polity 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. E. Liability And Medical Expenses General Conditions 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this policy. BP0006 0197 Page 11 of 16 7341 B0603228 UNIGARD INSURANCE COMPANY 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 that 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. Financial Responsibility Laws a. When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, the insurance provided by the polity for "bodily injury" liability and "property damage" liability will comply with the provisions of the law to the extent of the coverage and limits of insurance required for that law. b. With respect to "mobile equipment" to which this insurance applies, we will provide any liability, uninsured motorists, underinsured motorists, no-fault or other coverage required by any motor vehicle law. We will provide the required limits for those coverages. 4. Legal Action Against Us No person or organization has a right under this policy: 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 policy 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 obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this policy 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. 5. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy 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. Page 12 of 16 BP0006 0197 73t B0603228 UNIGARD INSURANCE COMPANY F. Liability And Medical Expenses Definitions 1. "Advertising injury" means injury arising out of one or more of the following offenses: a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; b. Oral or written publication of material that violates a person's right of privacy; c. Misappropriation of advertising ideas or style of doing business; or d. Infringement of copyright,title or slogan. 2. "Auto" means a land motor vehicle, trailer or semitrailer 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, provided the injury or damage does not occur in the course of travel or transportation to or from any place not included in a. above; or c. All parts of the world if: (1) The injury or damage arises out of: (a) Goods or products made or sold by you in the territory described in a.above; or (b) 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; and (2) 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. "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 faded to fulfill the terms of a contract or agreement; if such property can be restored to use by: (1) The repair,replacement,adjustment or removal of "your product" or "your work"; or (2) Your fulfilling the terms of the contract or agreement. 8. "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; 8P0006 0197 Page 13 of 16 7343 B0603228 UNIGARD INSURANCE COMPANY 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, drawings, opinions, reports, surveys, change orders,designs or 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 or engineering services. 9. "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". 10. "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". 11. "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, on which are 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 Page 14 of 16 BP0006 0197 734 B0603228 UNIGARD INSURANCE COMPANY (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. 12. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 13. "Personal injury" means injury, other than "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, by or on behalf of its owner, landlord or lessor; d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;or e. Oral or written publication of material that violates a person's right of privacy. 14. "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 the job site has been put to its intended use by any other 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. The "bodily injury" or "property damage" must occur away from premises you own or rent, unless your business includes the selling, handling or distribution of "your product" for consumption on premises you own or rent. BP0006 0197 Page 15 of 16 7345 B0603228 UNIGARD INSURANCE COMPANY 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. 15. "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. 16. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage", "personal injury" or "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. 17. "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. 18. "Your product" means: a. Any goods or products,other than real property,manufactured, sold, handled, distributed or disposed of by: (1) You; (2) Others trading under your name; or (3) A person or organization whose business or assets you have acquired; and b. Containers(other than vehicles), materials, parts or equipment furnished in connection with such goods or products. "Your product" includes: a. Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product"; and b. The providing of or failure to provide warnings or instructions. "Your product" does not include vending machines or other property rented to or located for the use of others but not sold. 19. "Your work" means: a. Work or operations performed by you or on your behalf; and b. Materials, parts or equipment furnished in connection with such work or operations. "Your work" includes: a. Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and b. The providing of or failure to provide warnings or instructions. Page 16 of 16 BP0006 0197 73A t BUSINESSOWNERS BUSINESSOWNERS COMMON POLICY CONDITIONS All coverages of 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. 5 days before the effective date of cancellation if any one of the following conditions exists at any building that is Covered Property in this policy. (1) The building has been vacant or unoccupied 60 or more consecutive days. This does not apply to: (a) Seasonal unoccupancy;or (b) Buildings in the course of construction, renovation or addition. Buildings with 65% or more of the rental units or floor area vacant or unoccupied are considered unoccupied under this provision. (2) After damage by a covered cause of loss, permanent repairs to the building: (a) Have not started; and (b) Have not been contracted for, within 30 days of initial payment of loss. (3) The building has: (a) An outstanding order to vacate; (b) An outstanding demolition order;or (c) Been declared unsafe by governmental authority. (4) Fixed and salvageable items have been or are being removed from the building and are not being replaced. This does not apply to such removal that is necessary or incidental to any renovation or remodeling. (5) Failure to: (a) Furnish necessary heat, water, sewer service or electricity for 30 consecutive days or more, except during a period of seasonal unoccupancy; or (b) Pay property taxes that are owing and have been outstanding for more than one year following the date due, except that this provision will not apply where you are in a bona fide dispute with the taxing authority regarding payment of such taxes. b. 10 days before the effective date of cancellation if we cancel for nonpayment of premium. c. 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. BP0009 0197 Copyright, Insurance Services Office, Inc., 1997 Page 1 of 4 7347 B0603228 UNIGARD INSURANCE COMPANY S. 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 polity 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. Concealment, Misrepresentation Or Fraud This policy is void in any case of fraud by you as it relates to this policy at any time. It is also void if you or any other insured,at any time, intentionally conceal or misrepresent a material fact concerning: 1. This policy; 2. The Covered Property; 3. Your interest in the Covered Property;or 4. A claim under this policy. D. Examination Of Your Books And Records We may examine and audit your books and records as they relate to this polity at any time during the policy period and up to three years afterward. E. Inspections And Surveys We have the right but are not obligated to: 1. Make inspections and surveys at any time; 2. Give you reports on the conditions we find; and 3. Recommend changes. Any inspections, surveys,reports or recommendations 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: 1. Are safe or healthful; or 2. Comply with laws, regulations, codes or standards. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. F. Insurance Under Two Or More Coverages If two or more of this policy's coverages apply to the same loss or damage, we will not pay more than the actual amount of the loss or damage. G. Liberalization If we adopt any revision that would broaden the coverage under this policy without additional premium within 45 days prior to or during the policy period, the broadened coverage will immediately apply to this policy. H. Other Insurance 1. If there is other insurance covering the same loss or damage,we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance,whether you can collect on it or not. But we will not pay more than the applicable Limit of Insurance. Page 2 of 4 BP0009 0197 734 B0603228 UNIGARD INSURANCE COMPANY 2. Business Liability Coverage is excess over any other insurance that insures for direct physical loss or damage. 3. When this insurance is excess, we will have no duty under Business Liability Coverage to defend any claim or "suit" that any other insurer has a duty to defend. 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. 1. Premiums 1. The first Named Insured shown in the Declarations: a. Is responsible for the payment of all premiums;and b. Will be the payee for any return premiums we pay. 2. The premium shown in the Declarations was computed based on rates in effect at the time the policy was issued. On each renewal, continuation or anniversary of the effective date of this polity, we will compute the premium in accordance with our rates and rules then in effect. 3. With our consent, you may continue this polity in force by paying a continuation premium for each successive one-year period. The premium must be: a. Paid to us prior to the anniversary date;and b. Determined in accordance with Paragraph 2. above. Our forms then in effect will apply. If you do not pay the continuation premium, this policy will expire on the first anniversary date that we have not received the premium. 4. Undeclared exposures or change in your business operation, acquisition or use of locations may occur during the policy period that are not shown in the Declarations. If so, we may require an additional premium. That premium will be determined in accordance with our rates and rules then in effect. J. Premium Audit 1. This policy is subject to audit if a premium designated as an advance premium is shown in the Declarations. We will compute the final premium due when we determine your actual exposures. 2. Premium shown in this policy as advance premium is a deposit premium only. At the close of each audit period we will compute the earned premium for that period. Audit premiums are due and payable on notice to the first Named Insured. If the sum of the advance and audit premiums paid for the polity period is greater than the earned premium,we will return the excess to the Named Insured. 3. 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. K. Transfer Of Rights Of Recovery Against Others To Us 1. Applicable to Businessowners Property Coverage: If any person or organization to or for whom we make payment under this policy has rights to recover damages from another, those rights are transferred to us to the extent of our payment. That person or organization must do everything necessary to secure our rights and must do nothing after loss to impair them. But you may waive your rights against another party in writing: a. Prior to a loss to your Covered Property. b. After a loss to your Covered Property only if,at time of loss, that party is one of the following: (1) Someone insured by this insurance; (2) A business firm: (a) Owned or controlled by you;or (b) That owns or controls you; or (3) Your tenant. BP0009 0197 Page 3 of 4 7349 B0603228 UNIGARD INSURANCE COMPANY You may also accept the usual bills of lading or shipping receipts limiting the liability of carriers. This will not restrict your insurance. 2. Applicable to Businessowners Liability Coverage: If the insured has rights to recover all or part of any payment we have made under this policy, 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. This condition does not apply to Medical Expenses Coverage. L. 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. Page 4 of 4 BP0009 0197 73' BUSINESSOWNERS WASHINGTON CHANGES This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY A. The Cancellation Common Policy Condition is replaced by the following: CANCELLATION 1. The first Named Insured shown in the Declarations may cancel this polity 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 and the first Named Insured's agent or broker written notice of cancellation at least: a. 5 days before the effective date of cancellation for any structure where 2 or more of the following conditions exist: (1) Without reasonable explanation, the structure is unoccupied for more than 60 consecutive days, or at least 65% of the rental units are unoccupied for more than 120 consecutive days unless the structure is maintained for seasonal occupancy or is under construction or repair; (2) Without reasonable explanation, progress toward completion of permanent repairs to the structure has not occurred within 60 days after receipt of funds following satisfactory adjustment or adjudication of loss resulting from afire; (3) Because of its physical condition, the structure is in danger of collapse; (4) Because of its physical condition, a vacation or demolition order has been issued for the structure,or it has been declared unsafe in accordance with applicable law; (5) Fixed and salvageable items have been removed from the structure, indicating an intent to vacate the structure; (6) Without reasonable explanation, heat, water, sewer, and electricity are not furnished for the structure for 60 consecutive days; or (7) The structure is not maintained in substantial compliance with fire,safety and building codes. b. 10 days before the effective date of cancellation if we cancel for nonpayment of premium. c. 45 days before the effective date of cancellation if we cancel for any other reason. 3. We will mail or deliver our notice stating the actual reason for cancellation to the first Named Insured and the first Named Insured's agent or broker at their last mailing addresses known to us. 4. We will also mail or deliver to any mortgageholder, pledgee or other person shown in this polity to have an interest in any loss which may occur under this policy, at their last mailing address known to us, written notice of cancellation prior to the effective date of cancellation. If cancellation is for reasons other than those contained in Paragraph A.2.a. above, this notice will be the same as that mailed or delivered to the first Named Insured. If cancellation is for a reason contained in Paragraph A.2.a. above, we will mail or deliver this notice at least 20 days prior to the effective date of cancellation. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BPO106 0197 Copyright, Insurance Services Office, Inc., 1996 Page 1 of 5 7351 - c B0603228 UNIGARD INSURANCE COMPANY 5. Notice of cancellation will state the effective date of cancellation. The polity 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. If the first Named Insured cancels, the refund will be at least 90% of the pro rata refund. The cancellation will be effective even if we have not made or offered a refund. 7. If notice is mailed, proof of mailing will be sufficient proof of notice. B. Paragraph 3. of the Premiums Common Policy Condition is replaced by the following: 3. The premium must be: a. Paid to us prior to the anniversary date; and b. Determined in accordance with Paragraph 2. above. Our forms then in effect will apply. If you do not pay the continuation premium, this policy will expire on the first anniversary date that we have not received the premium. C. The following are added: 1. Nonrenewal a. We may elect not to renew this polity by mailing or delivering written notice of nonrenewal, stating the reasons for nonrenewal, to the first Named Insured and the first Named Insured's agent or broker, at their last mailing addresses known to us. We will also mail to any mortgageholder, pledgee or other person shown in this policy to have an interest in any loss which may occur under this polity, at their last mailing address known to us, written notice of nonrenewal. We will mail or deliver these notices at least 45 days before the: (1) Expiration of the polity;or (2) Anniversary date of this policy if this policy has been written for a term of more than one year. If notice is mailed, proof of mailing will be sufficient proof of notice. Otherwise,we will renew this policy unless: (1) The first Named Insured fails to pay the renewal premium after we have expressed our willingness to renew, including a statement of the renewal premium, to the first Named Insured and the first Named Insured's insurance agent or broker,at least 20 days before the expiration date; or (2) Other coverage acceptable to the insured has been procured prior to the expiration date of the policy. 2. Vehicles The word "vehicles" as used in the Businessowners Property Coverage Form means vehicles running on land or tracks,but not aircraft. D. Paragraph k., Volcanic Action of the Covered Causes Of Loss and the Volcanic Action definition in Subparagraph B.1.b.(2)of the Exclusions in the Businessowners Standard Property Coverage Form;and The Volcanic Action definition in Subparagraph B.1.b.(2) of the Exclusions in the Businessowners Special Property Coverage Form: are replaced by the following: VOLCANIC ACTION 1. Volcanic Action means direct loss or damage resulting from the eruption of a volcano when loss or damage is caused by: a. Volcanic blast or airborne shock waves; or b. Ash, dust or particulate matter. Page 2 of 5 SP0106 0197 735 B0603228 UNIGARD INSURANCE COMPANY Volcanic Action does not provide coverage for damage to: (1) Land; (2) Property in the open or in open sheds; or (3) Portions of buildings not completely enclosed, or personal property contained within those buildings. All volcanic eruptions that occur within any 168-hour period will constitute a single occurrence. 2. Removal Direct loss includes the cost to: a. Remove the ash, dust or particulate matter from the interior and exterior surfaces of the covered building; and b. Clean equipment and stock. If stock cannot be returned to its state before the volcanic eruption, the measure of loss will be the reduction in actual cash value. Payment for removal applies only to the initial deposit of ash, dust or particulate matter following a volcanic eruption. Subsequent deposits arising from the movements of volcanic dust or ash by wind or other means are not covered. The following applies to the Business Income and Extra Expense Additional Coverages only: The "period of restoration" arising from the need for removal is the time necessary to remove the matter described with reasonable speed from the Covered Property. 3. Volcanic Action does not include loss caused by, resulting from,contributed to or aggravated by: a. Fire; b. Explosion; c. Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or other spray, all whether driven by wind or not; or d. Earth movement, including but not limited to earthquake, volcanic eruption, landslide, mine subsidence, lava flow, mud flow, earth sinking, earth rising or shifting. E. Exclusion 2.k. of the Businessowners Special Property Coverage Form is replaced by the following: k. Other Types Of Loss: (1) Wear and tear; (2) Rust, corrosion, fungus, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself; (3) Smog; (4) Settling, cracking,shrinking or expansion; (5) Nesting or infestation, or discharge or release of waste products or secretions, by insects, birds, rodents or other animals; (6) Mechanical breakdown, including rupture or bursting caused by centrifugal force; or (7) The following causes of loss to personal property: (a) Dampness or dryness of atmosphere; (b) Changes in or extremes of temperature;or (c) Marring or scratching. BPO106 0197 Page 3 of 5 7353 B0603228 UNIGARD INSURANCE COMPANY But if an excluded cause of loss that is listed in B.2.k.(1)through B.2.k.(7) results in a "specified cause of loss", building glass breakage or collapse, as provided in the Additional Coverage, Collapse, results, we will pay for the loss or damage caused by that "specified causes of loss", building glass breakage or collapse. F. The last paragraph of the Appraisal Property Loss Condition does not apply. G. Property Loss Condition - Duties In The Event Of Loss Or Damage The duty to notify the police if a law may have been broken does not apply. H. Subparagraphs d.(1)(a)(ii) and d.(1)(a)(iii) of the Loss Payment Property Loss Condition are replaced by the following: (ii) The amount it would cost to replace the damaged item at the time of the loss with new property or similar kind and quality to be used for the same purpose on the same site; or (iii) The amount you actually spend in repairing the damage, or replacing the damaged property with new property of similar kind and quality. 1. Subparagraph d.(5)of the Loss Payment Property Loss Condition is replaced by the following: (5) Tenants' Improvements and Betterments at: (a) Replacement cost if you make repairs within a reasonable time after loss; (b) A proportion of your original cost if you do not make repairs within a reasonable time after loss. We will determine the proportionate value as follows: (i) Multiply the original cost by the number of days from the loss or damage to the expiration of the lease; and (ii) Divide the amount determined in (i) above by the number of days from the installation of improvements to the expiration of the lease. If your lease contains a renewal option, the expiration of the renewal option period will replace the expiration of the lease in this procedure. (c) Nothing if others pay for repairs or replacement. J. The Mortgageholders Property General Condition is replaced by the following: Insurance Commissioner's Regulation No. 335/WAC284-21-010 requires that Form 372 (Ed. 11-50) or Form 438 BFU(Ed.5-42) be endorsed on this polity to replace the Mortgageholders Property General Condition. K. Exclusion B.1.e. of the Businessowners Liability Coverage Form applies only to "bodily injury" to "employees" of the insured whose employment is not subject to the Industrial Insurance Act of Washington (Washington Revised Code Title 51). L. Paragraph 2.a.0) of Who Is An Insured in the Businessowners Liability Coverage Form applies only to "employees" of the insured whose employment is not subject to the Industrial Insurance Act of Washington (Washington Revised Code Title 51). With respect to "employees" of the insured whose employment is subject to the Industrial Insurance Act of Washington, Paragraph 2.a.(1)of Who Is An Insured is replaced by the following: (1) "Bodily injury" or "personal 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), or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business; (b) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraph(1)(a); or Page 4 of 5 SP0106 0197 735 B0603228 UNIGARD INSURANCE COMPANY With respect to "bodily injury" to "employees" of the insured whose employment is subject to the Industrial Insurance Act of Washington, Exclusion B.1.e. is replaced by the following: e. Employer's Liability (1) "Bodily injury" to 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. (2) 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". M. Subparagraph 2.a. of Property Not Covered in the Businessowners Standard Property Coverage Form and the Businessowners Special Property Coverage Form is replaced by the following: a. Aircraft,automobiles, or motortrucks; and any other vehicle if such vehicle is subject to licensing requirements; N. Paragraph 1. of the Other Insurance Common Policy Condition is replaced by the following: 1. With respect to insurance provided under the Businessowners Standard or Special Property Coverage Form of this policy: a. You may have other insurance subject to the same plan, terms, conditions and provisions as the insurance under this policy. If you do, we will pay our share of the covered loss or damage. Our share is the proportion that the applicable Limit of Insurance under this policy bears to the limits of insurance of all insurance covering on the same basis. b. If there is other insurance covering the same loss or damage, other than that described in a. above, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect on it or not. But we will not pay more than the applicable Limit of Insurance. BP0106 0197 Page 5 of 5 7355 BUSINESSOWNERS WASHINGTON CHANGES - DOMESTIC ABUSE This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY A. The following exclusion and related provisions are added to Paragraph B.2. EXCLUSIONS in the Businessowners Standard and Special Property Coverage Forms: 1. We will not pay for loss or damage arising out of any act committed: a. By or at the direction of any insured;and b. With the intent to cause a loss. 2. However,this exclusion or the Concealment, Misrepresentation or Fraud Condition will not apply to deny an insured's claim for an otherwise covered property loss if such loss is caused by an act of "domestic abuse" by another insured under the policy, and the insured making claim: a. Files a police report and cooperates with any law enforcement investigation relating to the act of "domestic abuse"; and b. Did not cooperate in or contribute to the creation of the loss. 3. If we pay a claim pursuant to Paragraph A.2., our payment to the insured is limited to that insured's insurable interest in the property less any payments we first made to a mortgagee or other party with a legal secured interest in the property. In no event will we pay more than the Limit of Insurance. B. The following is added to the TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US Common Policy Condition: If we pay an insured, who is a victim of "domestic abuse", for a loss caused by an act of "domestic abuse", the rights of that insured to recover damages from the perpetrator of the abuse are transferred to us to the extent of our payment. That insured may not waive such rights to recover against the perpetrator of the "domestic abuse". C. As used in this endorsement, "domestic abuse" means: 1. Physical harm, bodily injury, assault or the infliction of fear of imminent physical harm, bodily injury or assault between family or household members; 2. Sexual assault of one family or household member by another; 3. Stalking, as defined in RCW 9A.46.110 of one family or household member by another family or household member;or 4. Intentionally, knowingly or recklessly causing damage to property so as to intimidate or attempt to control the behavior of another family or household member. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BP0473 1298 Copyright, Insurance Services Office, Inc., 1998 7357 BUSINESSOWNERS EXCLUSION OF CERTAIN COMPUTER-RELATED LOSSES This endorsement modifies insurance provided under the following: BUSINESSOWNERS STANDARD AND SPECIAL PROPERTY COVERAGE FORMS including any attached endorsement that may provide specialized coverage on computers. The following exclusion is added to Paragraph B., EXCLUSIONS in the Businessowners Standard and Special Property Coverage Forms: 1. We will not pay for loss or damage, caused by the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage. a. The failure, malfunction or inadequacy of: (1) Any of the following, whether belonging to any insured or to others: (a) Computer hardware, including microprocessors or other Electronic Data Processing Equipment as may be described elsewhere in this polity; (b) Computer application software or other Electronic Media and Records as may be described elsewhere in this policy; (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 1.a.0)of this endorsement; due to the inability to correctly recognize, distinguish, interpret or accept one or more dates or times. An example is the inability of computer software to recognize the year 2000. 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 1.a. of this endorsement. 2. If excluded loss or damage, as described in Paragraph 1.a. of this endorsement results in: a. A "Specified Cause of Loss" under the Businessowners Special Property Coverage Form;or b. A Covered Cause of Loss under the Businessowners Standard Property Coverage Form; we will pay only for the loss or damage caused by such "Specified Cause of Loss" or Covered Cause of Loss. 3. We will not pay for repair,replacement or modification of any items in 1.a.0) or 1.a.(2) of this endorsement to correct any deficiencies or change any features. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EP1004 0498 Copyright, Insurance Services Office, Inc., 1998 735 WASHINGTON CHANGES - ACTUAL CASH VALUE This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY COMMERCIAL PROPERTY COVERAGE PART The following is added: The term actual cash value means: a. When the damage to property is economically repairable, actual cash value means the cost of repairing the damage, less reasonable deduction for wear and tear,deterioration and obsolescence. b. When the loss or damage to property creates a total loss, actual cash value means the market value of property in a used condition equal to that of the destroyed property, if reasonably available on the used market. c. Otherwise, actual cash value means the market value of new, identical or nearly identical property less reasonable deduction for wear and tear,deterioration and obsolescence. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. Copyright, Insurance Services Office, Inc., 1989 Copyright, ISO Commercial Risk Services, Inc., 1989 IL0157 0489 7359 WASHINGTON CHANGES - EXCLUDED CAUSES OF LOSS This endorsement modifies insurance provided under the following: COMMERCIAL PROPERTY COVERAGE PART FARM COVERAGE PART BUSINESSOWNERS POLICY A. In each of the following Forms: 1. BUSINESSOWNERS STANDARD PROPERTY COVERAGE FORM 2. BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM 3. CAUSES OF LOSS - BASIC FORM 4. CAUSES OF LOSS - BROAD FORM 5. CAUSES OF LOSS - EARTHQUAKE FORM 6. CAUSES OF LOSS - SPECIAL FORM 7. GLASS COVERAGE FORM 8. CAUSES OF LOSS FORM - FARM PROPERTY 9. LIVESTOCK COVERAGE FORM 10. MOBILE AGRICULTURAL MACHINERY AND EQUIPMENT COVERAGE FORM 11. MORTGAGE HOLDERS ERRORS AND OMISSIONS COVERAGE FORM 12. STANDARD PROPERTY POLICY, in the sections titled Covered Causes of Loss or Exclusions, any introductory paragraph preceding an exclusion or list of exclusions is replaced by the following paragraph,which pertains to application of those exclusions: We will not pay for loss or damage caused by any of the excluded events described below. Loss or damage will be considered to have been caused by an excluded event even if the occurrence of that event: a. Directly and solely results in loss or damage;or b. Initiates a sequence of events that results in loss or damage, regardless of the nature of any intermediate or final event in that sequence. B. With respect to the: 1. BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM 2. CAUSES OF LOSS - SPECIAL FORM 3. COVERED CAUSES OF LOSS - SPECIAL IN THE CAUSES OF LOSS FORM - FARM PROPERTY 4. MOBILE AGRICULTURAL MACHINERY AND EQUIPMENT COVERAGE FORM 5. MORTGAGE HOLDERS ERRORS AND OMISSIONS COVERAGE FORM THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. IL0173 1298 Copyright, Insurance Services Office, Inc., 1998 Page 1 of 2 7361 B0603228 UNIGARD INSURANCE COMPANY 6. ACCOUNTS RECEIVABLE COVERAGE ENDORSEMENT 7. VALUABLE PAPERS AND RECORDS/ELECTRONIC MEDIA AND RECORDS ENDORSEMENT the Weather Conditions exclusion is replaced by the following exclusion: Weather Conditions a. A weather condition which results in: (1) Landslide, mudslide or mudflow; (2) Mine subsidence; earth sinking, rising or shifting(other than sinkhole collapse); (3) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; (4) Water backing up from a sewer or drain; (5) Water under the ground surface pressing on, or flowing or seeping through: (a) Foundations, walls, floors or paved surfaces; (b) Basements, whether paved or not; or (c) Doors,windows or other openings. But if loss or damage by a Covered Cause of Loss results,we will pay for that resulting loss or damage. b. A weather condition which results in the failure of power or other utility service supplied to the described premises, if the failure originates away from the described premises. But if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage. C. 1. The following exclusions: B.3.b. and B.3.c. in the Businessowners Special Property Coverage Form, Causes of Loss - Special Form, Mobile Agricultural Machinery and Equipment Coverage Form, and Valuable Papers and Records (and Electronic Media and Records) Endorsement, D.2.b. and D.2.c.in the Causes of Loss Form- Farm Property, B.3.c.and B.3.d. in the Mortgage Holders Errors and Omissions Coverage Form,and BA.b. and B.4.c. in the Accounts Receivable Coverage Endorsement, are replaced by the exclusions in paragraph C.2. below: C. 2. Exclusions: a. Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body. But if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage. b. Faulty, inadequate or defective: (1) Planning,zoning, development,surveying, siting; (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; (3) Materials used in repair,construction, renovation or remodeling;or (4) Maintenance; of part or all of any property on or off the described premises. But if loss or damage by a Covered Cause of Loss results,we will pay for that resulting loss or damage. Page 2 of 2 IL0173 1298 736: r BLISINESSOWNERS EXCLUSION - COMPUTER DATE OR TIME PROBLEMS - WITH EXCEPTION FOR BODILY INJURY ON YOUR PREMISES This endorsement modifies insurance provided under the following: BUSINESSOWNERS LIABILITY COVERAGE FORM CHANGES IN BUSINESSOWNERS LIABILITY COVERAGE FORM Paragraph 1.r.of Section B. EXCLUSIONS is added as follows: 2. EXCLUSIONS This insurance does not apply to: r. "Bodily injury", "property damage", "personal injury" or "advertising injury" arising directly or indirectly out of: (1) Any actual or alleged failure or inability of: (a) Any of the following: (i) computer hardware,including microprocessors(computer chips); (ii) computer software; (iii) computer operating systems; (iv) computer networks; (v) microprocessors(computer chips) not part of any computer system; NO any other computerized or electronic equipment or components;or (b) Any other products, services or function(s) that directly or indirectly utilize, incorporate or rely upon, in any manner,any of the items listed in Paragraph r.0)(a)of this endorsement to correctly recognize, interpret or process any date or time. (2) Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement, reprogramming or supervision done by any insured or for any insured to determine, rectify or test for, any potential or actual date or time computer-related problems described in Paragraph r.(1)above. However,this exclusion does not apply to "bodily injury" occurring on any premises which are owned by or rented to or leased to you. Paragraph 6.f. "Insured Contract" of SECTION F. LIABILITY AND MEDICAL EXPENSE DEFINITIONS is replaced by the following: 6. "Insured contract" means: 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. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 151675 0499 Page 1 of 2 7363 BO603228 UNIGARD INSURANCE COMPANY 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; (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; (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;or (4) Under which the insured or any person or organization for whose acts, errors or omissions the insured is legally responsible, assumes liability for an injury or damage arising out of: (a) Any actual or alleged failure or inability of: (i) Any of the following: a) computer hardware,including microprocessors(computer chips); b) computer software; 0 computer operating systems; d) computer networks; e) microprocessors(computer chips) not part of any computer system; f) other computerized or electronic equipment or components; or (ii) Any other products, services or function(s) that directly or indirectly utilize, incorporate or rely upon, in any manner,any of the items listed in Paragraph 6.f.(4)(a)(i)above to correctly recognize,interpret,or process any date or time. (b) Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement, reprogramming, or supervision done by any insured or for any insured to determine, rectify or test for, any potential or actual date or time computer-related problems described in Paragraph 6.f.(4)(a)above. Page 2 of 2 151675 0499 736 BO603228 UNIGARD INSURANCE COMPANY BUSINESSOWNERS ADDITIONAL INSURED - MANAGERS OR LESSORS OF PREMISES This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY SCHEDULE" Designation of Premises(Part Leased to You): Name of Person or Organization(Additional Insured): Additional Premium: A. The following is added to Paragraph C. WHO IS AN INSURED in the Businessowners Liability Coverage Form: 4. The person or organization shown in the Schedule is also an insured, but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule. B. The following exclusions are added: This insurance does not apply to: 1. Any "occurrence" that takes place after you cease to be a tenant in the premises described in the Schedule. 2. Structural alterations, new construction or demolition operations performed by or for the person or organization designated in the Schedule. *Information required to complete this Schedule, if not shown on this endorsement, will be shown in the Declarations. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. OP0402 0187 Copyright, Insurance Services Office, Inc., 1985 7365 BUSINESSOWNERS BUSINESSOWNERS COVERAGE AMENDMENTS This endorsement modifies insurance provided under: BUSINESSOWNERS POLICY SECTION I - LIABILITY CHANGES The Businessowners Liability Coverage Form BP0006 is amended as follows: A. NONOWNED WATERCRAFT- a broadening of coverage Paragraph 1.g.(2) of SECTION B.1.EXCLUSIONS is deleted and replaced by the following: This insurance does not apply to: g. "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 does not apply to: (2) A watercraft you do not own that is: (a) Less than 50 feet long; and (b) Not being used to carry persons or property for a charge. B. TENANTS LIABILITY- a broadening of coverage The final paragraph of SECTION B.1. EXCLUSIONS is deleted and replaced by the following: Exclusions c., d., e., g., h., k., I., m., n. and o. do not apply to "property damage" to premises while rented to you, or temporarily occupied by you with permission of the owner, but only where such "property damage" arises from: fire; smoke from a "hostile fire"; explosion; lightning; smoke arising from such explosion or lightning; collision by "mobile equipment" or leakage from fire protection systems. A separate limit of insurance applies to this coverage for "property damage" arising from fire or explosion as described in Paragraph 3. of Section D. Liability and Medical Expenses Limits of Insurance.The Liability and Medical Expenses limit shown in the Declarations applies to this coverage for "property damage" arising from smoke from a "hostile fire", lightning, smoke arising from explosion or lightning; collision by "mobile equipment" and leakage from fire protection systems. "Hostile fire" means a fire which becomes uncontrollable or breaks out from where it was intended to be. C. NEWLY ACQUIRED ORGANIZATION- A broadening of coverage The following is added to SECTION C.WHO IS AN INSURED: D. 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: THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 153024 1200 Page 1 of 5 7367 B0603228 UNIGARD INSURANCE COMPANY a. Coverage under this provision is afforded only until the 120th day after you acquire or form the organization or the end of the policy period,whichever is earlier; b. Coverage does not apply to: (1) "Bodily injury" or "property damage" that occurred before you acquired or formed the organization;and (2) "Personal injury" or "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. D. KNOWN INJURY OR DAMAGE- a clarification of coverage The following is added to Paragraph 1.b.(1)of Section A. Coverages: 1. Business Liability b. This insurance applies: (1) To "bodily injury" and "property damage" only if: (c) Prior to the policy period, no insured listed under Paragraph 1. of Section C - 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 It property damage" during or after the polity period will be deemed to have been known prior to the policy period. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the polity period, known to have occurred by any insured listed under Paragraph 1. of Section C - 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. "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 C - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (i) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer;or (ii) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or (iii) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur. E. ASBESTOS EXCLUSION The following is added to Section B.3. Exclusions - Applicable to Business Liability Coverage and Medical Expense Coverage: This insurance does not apply to: (1) "Bodily injury", "property damage", "personal injury" or "advertising injury" arising out of: (a) Inhaling, ingesting or prolonged physical exposure to asbestos or goods or product containing asbestos; or (b) The use of asbestos in construction or manufacturing any product,structure or goods; or Page 2 of 5 153024 1200 736 B0603228 UNIGARD INSURANCE COMPANY (c) The removal of asbestos from any product, structure or goods; or (d) The manufacture, transportation, storage or disposal of asbestos or goods or product containing asbestos. (2) This policy does not apply to payment for the investigation or defense of any: (a) Loss, injury or damage;or (b) Any cost, fine or penalty; or (c) For any expense or claim or suit; related to any of the above. F. LEAD OR MERCURY EXCLUSION The following is added to Section B.3. Exclusions - Applicable to Business Liability Coverage and Medical Expense Coverage: This insurance does not apply to: (1) "Bodily injury", "property damage", "personal injury" or "advertising injury" arising out of, resulting from, consisting of, or in any way caused or contributed to by the actual, alleged or threatened ingestion, inhalation, absorption of, presence of, or exposure to lead or mercury in any form emanating from any source;or (2) Any loss, cost or expense arising out of, resulting from or in any way related to any: (a) Claim, suit, request, demand, directive or order by or on behalf of any person, entity or governmental authority that any "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify, neutralize,or in any way respond to,or assess the effects of lead or mercury in any form,or to any (b) Claim or suit by or on behalf of any person, entity or governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating or detoxifying or neutralizing, or in any way responding to, or assessing the effects of lead or mercury in any form. We shall not be obligated to investigate, defend or indemnify any "insured" or any person or entity claiming any right under the polity for the matters excluded in this endorsement. SECTION II The Businessowners Special Property Coverage Form BP0002 is amended as follows: A. Seasonal Limits Paragraph 5. of Section C.Limits of Insurance is deleted and replaced by the following: 4. Business Personal Property Limit- Seasonal Increase a. The Limit of Insurance for Business Personal Property will automatically increase by 50% to provide for seasonal variations. b. This increase will apply only if the Limit of Insurance shown for business Personal Property in the (Schedule) is at least 100% of your average monthly values during the lesser of: (1) 9 of the 12 months immediately preceding the date the loss or damage occurs. The 9 months can be selected by deleting the monthly values for the 3 highest months; or (2) The period of time you have been in business as of the date the loss or damage occurs. B. Time Element Insurance-Time Trigger Paragraph 3.a.of Section H. Property Definitions is deleted and replaced by the following: 3. "Period of restoration" means the period of time that: a. Begins with the date of direct physical loss or damage caused by or resulting from any Covered Cause of Loss at the described premises;and 153024 1200 Page 3 of 5 7369 B0603228 UNIGARD INSURANCE COMPANY C. Insurance To Value Paragraph 6.d.(1)(a)and (b)of Section E. Property Loss Conditions is deleted and replaced by the following: 6. Loss Payment d. Except as provided in (2)through(8) below,we will determine the value of Covered Property as follows: (1) At replacement cost without deduction for depreciation, subject to the following: (a) We will not pay more for loss or damage on a replacement cost basis than the least of: (i) The Limit of Insurance under this policy that applies to the lost or damaged property; (ii) The cost to replace, on the same premises, the lost or damaged property with other property; i. Of comparable material and quality; and ii. Used for the same purpose; or (iii) The amount you actually spend that is necessary to repair or replace the lost or damaged property. Paragraph 6.d.(3)(b)is deleted. D. Premises Boundary Paragraphs A.1.a.(6)(b) for buildings, A.1.b. Business Personal Property and A.6. Coverage Extensions are amended to increase the distance limitation from 100 feet of the described premises to within 1,000 feet of the described premises. Paragraph A.5.f.(1) Business Income is amended to increase the distance limitation from 100 feet of the site at which the described premises are located to within 1,000 feet of the site at which the described premises are located. E. Limitations-amended Paragraph 4.d.(2) Limitations is deleted and replaced with the following: (2) $5,000 for jewelry, watches, watch movements, jewels, pearls, precious and semi-precious stones, bullion, gold, silver, platinum and other precious alloys or metals. This limit does not apply to jewelry and watches worth $250 or less per item. F. Extended Business Income Paragraph f.(2)(b)(ii)of Section A.5.Additional Coverage is deleted and replaced with the following: 00 60 consecutive days after the date determined in (2)(a) above. G. Additional Definitions: The following is added to Section H. Definitions: 1. "Employee" a. "Employee" means: (1) Any natural person: (a) While in your service or for 30 days after termination of service; (b) Who you compensate directly by salary,wages or commissions; and (c) Who you have the right to direct and control while performing services for you; (2) Any natural person who is furnished temporarily to you: (a) To substitute for a permanent "employee" as defined in Paragraph (1) above, who is on leave; or Page 4 of 5 153024 1200 737 f d — BO603228 UNIGARD INSURANCE COMPANY (b) To meet seasonal or short-term work load conditions; While that person is subject to your direction and control and performing services for you, excluding, however, any such person while having care and custody of property outside the "premises". b. "Employee" does not mean: (1) Any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor or representative of the same general character;or (2) Any person serving in a directoral capacity for a limited liability company, director or trustee except while performing acts coming within the scope of the usual duties of an "employee". 153024 1200 Page 5 of 5 737 BUSINESSOWNERS BUSINESSOWNERS SPECIFIC COVERAGE EXTENSIONS FORM This endorsement modifies insurance provided under the following: BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM COVERAGE EXTENSIONS The following Coverage Extension(s) apply only when a limit of insurance for the extension is shown in the Supplemental Declarations. Each of these extensions is an additional limit of insurance. Deductibles We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds $500. We will then pay the amount of loss or damage in excess of $500 up to the applicable limit of insurance. When the occurrence involves loss to any other item of covered property not included in this endorsement, the largest applicable deductible shown in the Supplemental Declarations will apply. No deductible applies to the following: a. Backup of Sewers, Drains or Sumps b. Exterior Building Glass c. Business Income from Dependent Properties A. SPOILAGE DUE TO POWER OUTAGE For purposes of Spoilage Due to Power Outage coverage, Paragraphs 2.a. and 2.k.(7)(b)of Section B. Exclusions are deleted. The following is added to Section A.5.Additional Coverages: We will pay for loss or damage to your Business Personal Property to provide spoilage due to power outage coverage. The following provisions (1 through 5 inclusive) apply only to Spoilage Due to Power Outage: 1. We will pay for direct physical loss of or damage to "perishable stock" due to change in temperature or humidity resulting from complete or partial interruption of electrical power, either on or off the described premises, due to conditions beyond your control. 2. The following Exclusions are added: We will not pay for loss or damage caused by or resulting from: a. The disconnection of any refrigerating,cooling or humidity control system from the source of power. b. The deactivation of electrical power caused by the manipulation of any switch or other device used to control the flow of electrical power or current. c. The inability of an electrical utility company or other power source to provide sufficient power due to: (1) Lack of or insufficient generating capacity to meet consumer demand; or (2) Governmental order. d. The inability of a power source at the described premises to provide sufficient power due to lack of generating capacity to meet demand. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 153025 1200 Page 1 of 5 7373 B0603228 UNIGARD INSURANCE COMPANY 3. The following Property Loss Condition is added: We will determine the value of "perishable stock" as follows: a. For "perishable stock" you have sold but not delivered, at the selling price less discounts and expenses you otherwise would have incurred; b. For other "perishable stock", at actual cash value. 4. The following Definition is added: "Perishable Stock" means property: a. Maintained under controlled temperature or humidity conditions for preservation;and b. Susceptible to loss or damage if the controlled temperature or humidity conditions change. S. The most we will pay for Spoilage Due to Power Outage is $25,000 each occurrence. B. BACKUP OF SEWERS, DRAINS OR SUMPS For purposes of Backup of Sewers, Drains or Sumps coverage, Paragraph 1.g.(3) of Section B. Exclusions is deleted. The following is added to Section A.S.Additional Coverages: We will pay for loss or damage caused by water that backs up or overflows from a sewer, drain or sump. The most we will pay under this Extension per occurrence is$5,000. No deductible applies to this coverage. C. FORGERY AND ALTERATION Paragraph k.(3)of Section A.S.Additional Coverages is deleted and replaced with the following: (3) The most we will pay for any loss, including legal expenses under this Additional Coverage is $5,000. D. MONEY ORDERS AND COUNTERFEIT PAPER CURRENCY ' The limit under Paragraph J. of Section A.S.Additional Coverages is changed to read$2,500. E. TRANSIT The following provisions (1 through 6 inclusive) apply only to Transit Coverage: 1. We will pay for loss or damage to Business Personal Property while in transit. The loss or damage must be a result of: (a) A Covered Cause of Loss; (b) "Collision", upset or overturn; (c) Flood; or (d) Earthquake. 2. Transit Coverage is provided while the property is in the custody of: (a) Any railroad,public trucker,private trucker or land transportation company; (b) You or anyone else while the Covered Property is in or on vehicles you own, lease or hire; (c) You or anyone else while the Covered Property is being moved from any vehicle you own, lease or hire to the place where it is finally delivered; (d) Any air transportation carrier; (e) Any water transportation carrier;or (f) Any messenger in charge or control of the Covered Property. Page 2 of 5 153025 1200 737 B0603228 UNIGARD INSURANCE COMPANY 3. Transit Coverage does not apply to: (a) Shipments by United States Mail; (b) Property covered under import or export Ocean Cargo Policies; (c) Intercoastal water shipments via the Panama Canal; or (d) Coastwise water shipments to Alaska. 4. Property Not Covered Covered Property does not include Electronic Data Processing Equipment (Hardware) and Electronic Media and Records (including Software). Transit coverage for this property is included in the Computer Coverage grant of the Businessowners Combined Coverage form. 5. Definitions "Collision" means accidental contact of the transporting vehicle with another vehicle or object. It does not mean the transporting vehicle's contact with the road bed. 6. Limit The most we will pay under this Extension per occurrence is $15,000 unless a higher Limit of Insurance for Transit is shown in the Supplemental Declarations. F. PERSONAL PROPERTY TEMPORARILY OFF PREMISES For the purposes of Personal Property Temporarily Off Premises coverage, Paragraph 6.b. of Section A.Coverage Extensions is deleted and replaced with the following: b. Personal Property Off Premises We will pay for loss to Business Personal Property while it is temporarily at a premises you do not own, lease or operate. This extension does not apply to electronic data processing equipment, media and records; "money" and "securities"; "valuable papers and records"; accounts receivable; property in the care, custody or control of your salesperson(s); property on display at fairs or exhibitions or property in the course of transit. The most we will pay for any loss or damage under this Extension per occurrence is$15,000. G. FAIRS OR EXHIBITIONS We will pay for loss or damage to your Business Personal Property while temporarily on display at fairs or exhibitions on premises not owned, operated or leased by you. This extension does not apply to electronic data processing equipment, media and records; "money" and "securities"; "valuable papers and records"; accounts receivable; property in the care, custody or control of your salesperson(s) or property in the course of transit. The most we will pay for any loss or damage under this Extension per occurrence is $15,000. H. SALESPERSON'S SAMPLES We will pay for loss or damage to your Business Personal Property that is salesperson's samples including packing materials or containers for such property while in the care,custody or control of your salesperson(s), sales agents, or yourself while acting as a salesperson. This extension does not apply to electronic data processing equipment, media and records; "money" and "securities"; "valuable papers and records"; accounts receivable; property temporarily on display at fairs or exhibitions or property in the course of transit. The most we will pay for any loss or damage under this Extension per occurrence is $2,500. 1. OUTDOOR PROPERTY Paragraph 6.c.of Section A. Coverage is deleted and replaced with the following: c. Outdoor Property We will pay for loss to your outdoor fences, radio and television antennas (including satellite dishes), trees, shrubs and plants, including debris removal expense, caused by or resulting from any of the following causes of loss: 153025 1200 Page 3 of 5 737' • i B0803228 UNIGARD INSURANCE COMPANY (1) Fire; (2) Lightning; (3) Explosion; (4) Riot or Civil Commotion; (5) Aircraft;or (6) Windstorm (except for trees,shrubs and plants). No coverage is provided for trees, shrubs and plants for loss or damage caused by or resulting from windstorm. The most we will pay under this Extension is $5,000 any one occurrence,but not more than $1,000 for any one tree, plant or shrub. J. FINE ARTS We will pay for loss or damage to paintings, etchings, pictures, tapestries, art glass windows and other bonafide works of art or rarity, historical value or artistic merit, other than fine arts held for sale by you, caused by or resulting from a Covered Cause of Loss. We will not pay for any loss resulting from repair, restoration or retouching operations. The most we will pay under this Extension is $5,000 any one occurrence.This Extension does not apply when coverage is provided by the Businessowners Fine Arts Coverage Form. K. NEWLY ACQUIRED PROPERTY Paragraph 6.a. of Section A. Coverage is deleted and replaced with the following: a. Building and Business Personal Property at Newly Acquired Premises (1) Building We will pay for loss or damage to Buildings you acquire at premises, other than the described premises, intended for: (a) Similar use as the building described in the Supplemental Declarations;or (b) Use as a warehouse. The most we will pay for loss or damage under this Extension is $500,000 at each building. (2) Business Personal Property We will pay for loss or damage to your Business Personal Property at any premises you acquire other than fairs or exhibitions that is not a temporary location. The most we will pay for loss or damage for your Business Personal Property under this Extension is $250,000 at each premises. (3) Insurance under this Extension for each newly acquired premises will end when any of the following first occurs: (a) The policy expires; (b) 90 days expire after you acquire the premises;or (c) You report the values to us. We will charge you additional premium for values reported from the date you acquire the premises. L. EXTERIOR BUILDING GLASS Paragraph m.(4)of Section A.S. Additional Coverages is deleted and replaced with the following: m. Exterior Building Glass (4) The most we will pay under this Additional Coverage is the Building Limit of Insurance shown in the Supplemental Declarations. Page 4 of 5 153025 1200 737 B0603228 UNIGARD INSURANCE COMPANY However,if you are a tenant and you are required by lease agreement to pay for loss or damage to exterior building glass, the most we will pay under this additional coverage is the Business Personal Property Limit of Insurance shown in the Supplemental Declarations. No deductible applies to this additional coverage. M. BUSINESS INCOME FROM DEPENDENT PROPERTIES The following provisions 0 through 4 inclusive)apply only to Business Income from Dependent Properties: 1. Coverage a. We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your "operations" during the "period of restoration". The suspension must result from direct physical loss of or damage to the "dependent property" caused by or resulting from any Covered Cause of Loss. 2. Additional Property Loss Conditions The following is added to Paragraph 8. of Section E. Property Loss Conditions: 8. Resumption of Operations c. We will reduce the amount of your Business Income From Dependent Properties loss, other than Extra Expense, to the extent you can resume "operations", in whole or in part, by using any other available: (1) Source of materials;or (2) Outlet for your products. 3. Additional Definition The following is added to the Definitions section: "Dependent Property" means property operated by others whom you depend on to: a. Deliver materials or services to you, or to others for your account (Contributing Locations). With respect to Contributing Locations,services does not mean water,communication or power supply services; b. Accept your products or services (Recipient Locations); c. Manufacture products for delivery to your customers under contract of sale (Manufacturing Locations); or d. Attract customers to your business (Leader Locations). 4. Revised Definition For the purposes of Business Income From Dependent Properties coverage, the "Period of Restoration" definition with respect to "dependent property" is replaced by the following: "Period of Restoration" means the period of time that: a. Begins with the date of direct physical loss or damage caused by or resulting from any Covered Cause of Loss at the premises of the "dependent property";and b. Ends on the date when the property at the premises of the "dependent property" should be repaired, rebuilt or replaced with reasonable speed and similar quality. The expiration date of this policy will not cut short the "period of restoration". 153025 1200 Page 5 of 5 7377 BUSINESSOWNERS BUSINESSOWNERS COMBINED COVERAGE EXTENSION FORM This endorsement modifies insurance provided under the following: BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM Section I - COMBINED COVERAGE EXTENSION A. Limit With respect to the following Coverage Extensions, we will pay up to $100,000 for loss or damage caused by a covered cause of loss. You may apply this limit to one or any combination of these Coverage Extensions. B. Other Insurance If you purchase coverage separately for any item included in the Coverage Extensions, the limit available to you by this endorsement will be excess of the specific limit purchased up to the amount of loss. C. Deductible We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds $500. We will then pay the amount of loss or damage in excess of $500 up to $100,000. When the occurrence involves loss to any other item of covered property not included in this endorsement, the largest applicable deductible shown in the Supplemental Declarations for that "location' will apply. No deductible applies when payment is requested on Fire Department Service Charge or Arson Reward and no other item of covered property. No deductible applies when other insurance exists and payment is being made on an excess basis. D. Coverage Extensions 1. Computer Coverage The following is added under Section A.Coverage: We will pay for direct physical loss of or damage to Covered Property caused by or resulting from any Covered Cause of Loss. The following provisions (a. through f. inclusive) apply only to this coverage extension, Computer Coverage. a. Covered Property The following is added to Paragraph A.1. Covered Property: Covered Property includes the following types of property that you own that are used in your business; and property of others that is leased, rented or under your control and for which you are legally liable: (1) Electronic Data Processing Equipment(Hardware) As used in this endorsement, Electronic Data Processing Equipment includes: (a) Programmable electronic equipment that is used to store, retrieve and process data; and (b) Associated peripheral equipment that provides communication including input and output functions such as printing or auxiliary functions such as data transmission; except as described in (2) below. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 153026 1200 Page 1 of 5 7379 B0603228 UNIGARD INSURANCE COMPANY (2) Electronic Media and Records(Including Software) As used in this endorsement, Electronic Media and Records includes: (a) Electronic Data Processing, recording or storage media such as films, tapes, discs, drums or cells; (b) Data stored on such media; and (c) Programming records used for Electronic Data Processing or electronically controlled equipment. b. Property Not Covered The following is added to Paragraph A.2.Property Not Covered: g. Property held as samples, held for rental or sale or that you rent to others; h. Property in storage away from the premises shown in the Declarations or in the Schedule, except as provided in the Coverage Extensions of this extension; i. Electronic Data Processing Equipment which is permanently installed or designed to be permanently installed in any aircraft,watercraft,motortruck or other vehicle subject to motor vehicle registration; or j. Accounts, bills, evidences of debt and valuable papers and records. However, such property is Covered Property in its "converted data" form. c. Property Off Premises To provide coverage for laptop or personal computers, Coverage Extension 6.b. Personal Property Off Premises is deleted and replaced with the following: You may extend the insurance that applies to Electronic Data Processing Equipment and Electronic Media and Records while such property is in the course of transit or is located at a premises you do not own, lease or operate for not more than 90 days, including duplicate or back-up Electronic Media and Records that are stored at a separate location which is at least 1000 feet from any premises described in the Supplemental Declarations. d. Additional Exclusions The following exclusions apply in addition to the exclusions listed under B. Exclusions: We will not pay for loss or damage caused by or resulting from any of the following: 1. Human errors or omissions in processing, recording or storing information on Electronic Media and Records and Electronic Data Processing Equipment. But we will pay for direct loss or damage caused by resulting fire or explosion. 2. Electrical or magnetic injury, disturbance or erasure of electronic recordings. But we will pay for direct loss or damage caused by lightning. 3. Failure, breakdown or malfunction of Electronic Media and Records and Electronic Data Processing Equipment, including parts, while the media is being run through the equipment. But we will pay for direct loss or damage caused by resulting fire or explosion. 4. Installation,testing, repair or other similar service performed upon the Electronic Media and Records or Electronic Data Processing Equipment, including parts. e. Additional Conditions 1. Paragraph 5. of Section E. Property Loss Conditions is deleted and replaced by the following: 5. We will not pay for any loss of Business Income caused by direct physical loss of or damage to Electronic Media and Records after the period beginning with the date of direct physical loss or damage, necessary to repair, rebuild or replace with reasonable speed and similar quality, other property at the described premises due to loss or damage caused by the same occurrence. Page 2 of 5 153026 1200 7381 B0603228 UNIGARD INSURANCE COMPANY 2. Paragraph d.(6) of the Loss Payment Property loss Condition does not apply to electronic media and records that are actually replaced or restored. f. Additional Definition The following is added to H. Property Definitions: "Converted Data" means information that is stored on electronic media that is capable of being communicated,processed or interpreted by Electronic Data Processing equipment. 2. Accounts Receivable Paragraph f.(2)of Section A.6. Coverage Extensions is deleted. 3. Arson Reward We will pay for information that leads to an arson conviction in connection with a fire loss covered under this polity. 4. Cost to Prepare Inventory We will pay for expenses you incur in compiling inventory at our request to assist us in determining the amount of a loss covered by this policy. We will not pay for: a. Expenses to prove that loss or damage is covered;and b. Expenses incurred under paragraph 2.Appraisal of Section E. Property Loss Conditions. 5. Fire Department Service Charge Paragraph c. of Section A.5.Additional Coverages is deleted and replaced with: c. Fire Department Service Charge When the fire department is called to save or protect Covered Property from a Covered Cause of loss, we will pay for your liability for fire department service charges: (1) Assumed by contract or agreement prior to loss; or (2) Required by local ordinance. 6. Personal Effects Paragraph d. of Section A.6.Coverage Extensions is deleted and replaced with: d. Personal Effects We will pay for loss or damage to personal effects owned by you, your officers, your partners or your employees. This extension does not apply to: (1) Tools or equipment used in your business at any time; or (2) Loss or damage by theft. 7. Personal Property of Others We will pay for loss or damage to Property of Others that is in your care, custody or control, except as otherwise provided in Loss Payment Loss Condition E.6.d.(3)(b). 8. Recharging We will pay for expenses you incur for the recharging of fire extinguishers or fire extinguishing systems when expended to fight fire on your premises or adjacent premises. 153026 1200 Page 3 of 5 7381 B0603228 UNIGARD INSURANCE COMPANY 9. Utility Services Paragraph 1.e.of Section B. Exclusions is deleted. The following additional coverage is added: Utility Services-Direct Damage (1) We will pay for loss of or damage to Covered Property caused by the interruption of Utility Service to the described premises. The interruption of Utility Services must result from direct physical loss or damage by a Covered Cause of Loss to the property described in Paragraph(2) and is located outside of a covered premises. (2) Utility Services (a) Water Supply Services, meaning the following types of property supplying water to the described premises: (i) pumping stations; and (ii) water mains. (b) Communication Supply Services, meaning property supplying communication services, including telephone, radio, microwave or television services to the described premises, such as: (i) Communication transmission lines, including optic fiber and overhead transmission lines; (ii) Coaxial cables; and (iii) Microwave radio relays except satellites. (c) Power Supply Services, meaning the following types of property supplying electricity, steam or gas to the described premises: (i) Utility generating plants; (ii) Switching stations; (iii) Substations; (iv) Transformers;and (v) Transmission lines, including overhead transmission lines. Paragraph 4.a.(3) is added to Section B. Exclusions as follows: 4. Business Income and Extra Expense We will not pay for: a. Any Extra Expense, or increase of Business Income loss, caused by or resulting from: (3) The failure of power or other utility service supplied to the described premises, however caused, if the failure occurs away from the described premises. But if the failure of power or other utility service results in a Covered Cause of Loss, we will pay for any Extra Expense or increase of Business Income loss caused by that Covered Cause of Loss. 10. Valuable Papers Paragraph e.(3)of Section A.6. Coverage Extensions is deleted. 11. Rental Office Business Personal Property If you are a building owner and do not occupy any portion of the building for business purposes other than to maintain a rental office,the following is added to Section A.1.a. Covered Property: a. Buildings, meaning the buildings and structures at the premises described in the Supplemental Declarations, including: (5) Personal property owned by you that is used to maintain or service the buildings or structures or the premises, including: Page 4 of 5 153026 1200 738 B0603228 UNIGARD INSURANCE COMPANY (e) Property you own and leased property for which you have a contractual responsibility to insure used in your business of building operator contained in a rental office. Section II -ADDITIONAL DEFINITION As used in this endorsement "location" means the entire area within a described premises including all noncom municating building or structures as well as all property in the open within 1000 feet of such buildings or structures. 153026 1200 Page 5 of 5 7383 BUSINESSOWNERS EXCLUSION - PERSONAL AND ADVERTISING INJURY This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY The following is added to the Businessowners Liability Coverage Form and supersedes any provision to the contrary: The insurance provided under Section A. Coverages of the Businessowners Liability Coverage Form does not apply to "advertising injury" or "personal injury". THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BP0437 0196 Copyright, Insurance Services Office, Inc., 1996 7385 BUSINESSOWNERS WASHINGTON STATE EMPLOYERS' LIABILITY INSURANCE (Stop Gap) This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY SCHEDULE See Supplemental Declarations In return for the payment of the premium and subject to all terms of this policy, we agree with you as follows: A. How This Insurance Applies This employers' liability insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death. 1. The bodily injury must arise out of and in the course of the injured employee's employment by you. 2. The employment must be necessary or incidental to your work in Washington State. 3. Bodily injury by accident must occur during the policy period. 4. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. 5. If you are sued, the original suit and any related legal actions for damages for bodily injury by accident or by disease must be brought in the United States of America,its territories or possessions, or Canada. B. We Will Pay We will pay all sums you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers' Liability Insurance. The damages we will pay, where recovery is permitted by law, include damages: 1. for which you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of injury to your employee; and 2. for care and loss of services. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 153135 0601 Page 1 of 3 7387 BO603228 UNIGARD INSURANCE COMPANY C. Exclusions This insurance does not cover: 1. any bodily injury sustained by: a. any employee with respect to whom the insured does not report and declare under, or is not required to contribute to, a workers' compensation insurance fund; b. a master or member of the crew of any vessel or by any employee in the course of an employment subject to the United States Longshoremen's and Harbor Workers' Compensation Act, U.S. Code (1946) Title 33, Sections 901-49 or the Federal Employer's Liability Act, U.S. Code (1946) Title 45, Sections 51-60; c. any member of the flying crew of any aircraft; 2. liability assumed under a contract. This exclusion does not apply to a warranty that your work will be done in a workmanlike manner; 3. punitive or exemplary damages because of bodily injury to an employee employed in violation of law; 4. bodily injury to an employee while employed in violation of law with your actual knowledge or the actual knowledge of any of your executive officers; 5. any obligation imposed by a workers' compensation, occupational disease, unemployment compensation, or disability benefits law,or any similar law; 6. bodily injury intentionally caused or aggravated by you; 7. bodily injury occurring outside the United States of America, ites territories or possessions, and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries; 8. damages arising out of the discharge of, coercion of, or discrimination against any employee in violation of law; 9, bodily injury to a spouse, child, parent, brother or sister of the injured provided that these damages are the direct consequence of bodily injury that arises out of and in the course of the injured employee's employment by you;and 10. bodily injury to your employee that arises out of and in the course of employment, claimed against you in a capacity other than as employer. D. We Will Defend We have the right and duty to defend, at our expense, any claim, proceeding or suit against you for damages payable by this insurance. We have the right to investigate and settle these claims, proceedings and suits. We have no duty to defend a claim, proceeding or suit that is not covered by this insurance. We have no duty to defend or continue defending after we have paid our applicable limit of liability under this insurance, in judgments or in settlements. E. We Will Also Pay We will also pay these costs, in addition to other amounts payable under this insurance, as part of any claim, or suit we defend; 1, reasonable expenses incurred at our request; but not loss or earnings; 2. premiums for bonds for release attachments and for appeal bonds in bond amounts up to the limit of our liability under this insurance; 3. litigation costs taxed against you; 4. interest on a judgment as required by law until we offer the amount due under this insurance;and 5. expenses we incur. Page 2 of 3 153135 0601 73 B0603228 UNIGARD INSURANCE COMPANY F. Other Insurance We will not pay more than our share of damages and costs covered by this insurance and other insurance or self-insurance. Subject to any limits of liability that apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is exhausted, the shares of all remaining insurance and self-insurance will be equal until the loss is paid. G. Limits of Liability Our liability to pay for damages is limited. Our limits of liability are shown in the Supplemental Declarations. They apply as explained below. 1. Bodily Injury by Accident. The limit shown for "bodily injury by accident - each accident" is the most we will pay for all damages covered by this insurance because of bodily injury to one or more employees in any one accident. A disease is not bodily injury by accident unless it results directly from bodily injury by accident. 2. Bodily Injury by Disease. The limit shown for "bodily injury by disease - policy limit" is the most we will pay for all damages covered by this insurance and arising out of bodily injury by disease, regardless of the number of employees who sustain bodily injury by disease. The limit shown for "bodily injury by disease - each employee" is the most we will pay for all damages because of bodily injury by disease to any one employee. Bodily injury by disease does not include disease that results directly from a bodily injury by accident. 3. We will not pay any claims for damages after we have paid the applicable limit of our liability under this insurance. 4. The limits of insurance shown in the Declarations are replaced by the limits designated in the Schedule with respect to the coverage provided by this endorsement. The limits are inclusive of and are not in addition to the limits being replaced,and are therefore subject to the general aggregate limit stated in the Declarations. H. Recovery From Others We have your rights to recover our payment from anyone liable for an injury covered by this insurance.You will do everything necessary to protect those rights for us and to help us enforce them. I. Actions Against Us There will be no right of action against us under this insurance unless: 1. You have complied with all the terms of this polity; and 2. The amount you owe has been determined with our consent or by actual trial and final judgment. This insurance does not give anyone the right to add us as a defendant in an action against you to determine your liability. 153135 0601 Page 3 of 3 7389 r � BUSINESSOWNERS EQUIPMENT BREAKDOWN ENDORSEMENT This endorsement modifies insurance provided underthe following: BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM Paragraph G.S. of Section G. Optional Coverages is deleted and replaced with the following: 5. Equipment Breakdown a. Coverage We will pay for loss caused by or resulting from an "accident" to "covered equipment". If an initial "accident" causes other "accidents", all will be considered one "accident". All "accidents" that are the result of the same event will be considered one "accident". b. Limit The most we will pay for loss or damage under this endorsement is the applicable Limit Of Insurance shown in the Declarations. Coverage provided under this endorsement does not provide an additional amount of insurance. c. Additional Coverage The following coverages also apply to loss caused by or resulting from an "accident" to "covered equipment". These coverages do not provide additional amounts of insurance. (1) Expediting Expenses With respect to your damaged Covered Property, we will pay, up to $25,000, the reasonable extra cost to: (a) Make temporary repairs;and (b) Expedite permanent repairs or permanent replacement. (2) Hazardous Substances We will pay for the additional cost to repair or replace Covered Property because of contamination by a "hazardous substance". This includes the additional costs to clean up or dispose of such property. Additional costs mean those beyond what would have been required had no "hazardous substance" been involved. The most we will pay for loss or damage under this additional coverage,including actual loss of Business Income you sustain, necessary Extra Expense you incur and loss under Spoilage coverage,is $25,000. (3) Spoilage (a) We will pay for your loss of "perishable goods" due to spoilage. (b) We will also pay for your loss of "perishable goods" due to contamination from the release of refrigerant,including but not limited to ammonia. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. 153095 1200 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 4 7391 B0603228 UNIGARD INSURANCE COMPANY (c) We will also pay any necessary expenses you incur to reduce the amount of loss under this coverage. We will pay for such expenses to the extent that they do not exceed the amount of loss that otherwise would have been payable under this coverage. (d) If you are unable to replace the "perishable goods" before its anticipated sale, the amount of our payment will be determined on the basis of the sales price of the "perishable goods" at the time of the "accident", less discounts and expenses you otherwise would have had. Otherwise our payment will be determined in accordance with the Loss Payment condition. The most we will pay for loss or damage under this coverage is $25,000 unless otherwise shown in the Declarations. (4) Computer Equipment We will pay for loss or damage caused by or resulting from an "accident" to "computer equipment". The most we will pay for loss or damage under this coverage, including actual loss of Business Income you sustain and necessary Extra Expense you incur, is $25,000 unless otherwise shown in the Declarations. Computers used primarily to control or operate "covered equipment" are not subject to this limit. (5) Data Restoration We will pay for your cost to research, replace and restore data, including programs and operating systems, that is lost or corrupted due to an "accident". The most we will pay for loss or damage under this coverage, is $25,000. (6) CFC Refrigerants We will pay for additional cost to repair or replace Covered Property because of the use or presence of a refrigerant containing CFC (chlorofluorocarbon) substances. This means the additional cost to do the least expensive of the following: (a) Repair the damaged property and replace any lost CFC refrigerant; (b) Repair the damaged property, retrofit the system to accept a non-CFC refrigerant and charge the system with a non-CFC refrigerant;or (c) Replace the system with one using a non-CFC refrigerant. Additional costs mean those beyond what would have been required had no CFC refrigerant been involved. The most we will pay for loss or damage under this coverage, including actual loss of Business Income you sustain, necessary Extra Expense you incur and loss under Spoilage coverage, is $25,000. (7) Service Interruption The insurance provided for Business Income, Extra Expense and Spoilage is extended to apply to loss caused by or resulting from an "accident" to equipment that is owned by a utility, landlord, or other supplier with whom you have a contract to provide you with any of the following services: electrical power, communications, waste disposal, air conditioning, refrigeration,heating, gas, air,water or steam. d. Exclusions For purposes of Equipment Breakdown Coverage only, all Exclusions and Limitations apply except; (1) The following are deleted: (a) Exclusions B.2.a., B.2.d. and B.2.k.(6); and (b) Limitations A.4.a.(1)and A.4.a.(2). Page 2 of 4 153095 1200 739 B0603228 UNIGARD INSURANCE COMPANY (2) The following exclusions are modified as follows: (a) The following is added to Exclusion B.1.g.: However, if electrical "covered equipment" requires drying out because of the above, we will pay for the direct expenses of such drying out subject to the applicable Limit of Insurance and deductible for Building or Business Personal Property,whichever applies. (b) The last paragraph of Exclusion B.2.k. is deleted and replaced with the following: But if an excluded cause of loss that is listed in 13.21.(1) through B.2.k.(7) results in an "accident", we will pay for the loss or damage caused by that "accident". (3) The following exclusions are added: (a) We will not pay under this endorsement for loss or damage caused by or resulting from: (i) any defect, virus, loss of data or other situation within Electronic Media and Records. But if loss or damage from an "accident" results, we will pay for that resulting loss or damage; (ii) your failure to use all reasonable means to protect the "perishable goods" from damage following an "accident";or (iii) any hydrostatic, pneumatic or gas pressure test of any boiler or pressure vessel; or an insulation breakdown test of any type of electrical equipment. (b) With respect to Service Interruption coverage and Spoilage coverage, we will not pay for loss or damage caused by or resulting from: fire, lightning; windstorm or hail; explosion (except for steam or centrifugal explosion); smoke; aircraft or vehicles; riot or civil commotion; vandalism; sprinkler leakage;falling objects;weight of snow, ice or sleet;freezing or collapse. (c) With respect to Service Interruption coverage and Business Income and Extra Expense coverages, we will also not pay for delay in resuming operations due to the need to reconstruct or reinput data or programs on Electronic Media and Records. e. Conditions (1) Suspension When any "covered equipment" is found to be in, or exposed to a dangerous condition, any of our representatives may immediately suspend the insurance against loss from an "accident" to that "covered equipment". We can do this by mailing or delivering a written notice of suspension to your address as shown in the Declarations or at the address where the equipment is located. Once suspended in this way, your insurance can be reinstated only by an endorsement for that "covered equipment". If we suspend your insurance, you will get a pro rata refund of premium. But the suspension will be effective even if we have not yet made or offered a refund. (2) Jurisdictional Inspections If any property that is "covered equipment" under this endorsement requires inspection to comply with state or municipal boiler and pressure vessel regulations, we agree to perform such inspection on your behalf. (3) Environmental,Safety and Efficiency Improvements If "covered equipment" requires replacement due to an "accident", we will pay your additional cost to replace with equipment that is better for the environment, safer or more efficient than the equipment being replaced. However,we will not pay more than 125% of what the cost would have been to repair or replace with like kind and quality. This condition does not increase any of the applicable limits. This condition does not apply to any property to which Actual Cash Value applies. 153095 1200 Page 3 of 4 7393 BO603228 UNIGARD INSURANCE COMPANY f. Additional Definitions As used in this endorsement for the purposes of Equipment Breakdown coverage: "Accident'means direct physical loss as follows: (1) Mechanical breakdown, including rupture or bursting caused by centrifugal force; (2) Artificially generated electric current,including electric arcing, that disturbs electrical devices, appliances or wires; (3) Explosion of steam boilers, steam pipes, steam engines or steam turbines owned or leased by you, or operated under your control; (4) Loss or damage to steam boilers, steam pipes, steam engines or steam turbines caused by or resulting from any condition or event inside such equipment; or (5) Loss or damage to hot water boilers or other water heating equipment caused by or resulting from any condition or event inside such boilers or equipment. "Covered Equipment"means Covered Property built to operate under vacuum or pressure,other than weight of contents, or used for the generation, transmission or utilization of energy. "Covered Equipment" does not include any: (a) Structure,foundation, cabinet, compartment or air supported structure or building; (b) Insulating or refractory material; (c) Sewer piping, underground vessels or piping, or piping forming a part of a sprinkler system; (d) Water piping other than boiler feedwater piping, boiler condensate return piping or water piping forming a part of a refrigerating or air conditioning system; (e) Excavation equipment or construction equipment; (f) Vehicle,aircraft, floating vessel or any equipment mounted on such vehicle, aircraft or floating vessel. However, any property that is stationary, permanently installed at a covered location and that receives electrical power from an external power supplier will not be considered a vehicle, aircraft or floating vessel; or (g) Equipment manufactured by you for sale. "Hazardous substance"means any substance other than ammonia that has been declared to be hazardous to health by a governmental agency. "Perishable goods" means personal property maintained under controlled conditions for its preservation,and susceptible to loss or damage if the controlled conditions change. "Computer equipment' means Covered Property that is electronic computer or other data processing equipment, including peripherals used in conjunction with such equipment, and Electronic Media and Records as defined in Property Loss Conditions, Limitation - Electronic Media and Records. Page 4 of 4 153095 1200 739-