milgard manufacturing inc v. illinois union insurance company plaintiff exhibits

8/7/2019 MILGARD MANUFACTURING INC v. ILLINOIS UNION INSURANCE COMPANY Plaintiff Exhibits

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EX HIBIT 1

Case 3:10-cv-05943 Document 1-1 Filed 12/23/10 of 43



Illinois Union Insuran ce Com pany525 W est Monroe Street, Suite 400, Chicago, Illinois 60661

ace usaDeclarations

This Declarations Page is issued in conjunction with and forms a part of Policy Number: O GL065490

Renewal of Number: NEW BUSINESS

MILGARD M ANUFACTURING, INC.See Endorsement Number 17

Item 1.

Name of Insured:u. .

Address: P. 0. BOX 11368US IF YOU HAVE AN Y QUF-ZriOPM

TACOMA , WA 98411

Item 2. Policy Period: DECEM BER 31, 2001toDECEM BER 31, 2002(12:01 a.m. unless otherwise specified)

Item 3.

Item 4.

Description of Insurance afforded hereunder:COMME RCIAL G ENERAL LIABILITY

Limits of Liability:Coverage is provided only if a limit is shown below:

General Aggregate Limit (other than Products Completed Operations)•Products Completed Operations Aggregate LimitPersonal & Advertising Injury Limit

Each O ccurrence LimitMedical Payments LimitFire Damage Limit

$ 2,000,000.00

$ 2,000,000.00

$ 1,000,000.00

$ 1,000,000.00

$ 5,000.00

$ 50,000.00

(any one person)

(any one fire)

Item 7.

Self Insured Retention: $50,000.00 EI Per Claim u Per Occurrence/OffenseSee Endorsement Number: 3

Deductible: u Per Claim u Per Occurrence/OffenseSee Endorsement Number.

The Named Insured is: u Individual u Partnership Eg C orporationu Joint Venture u Other u Limited Liability Corporation

c o Item 5.

Item 6.

Item 8. Premium: The premium stated herein is the minimum premium for the policy period. Any adjustment uponaudit will be upward only. There will be no premium refund of the minimum prem ium upon audit, ifthe estimated exposure is less than shown herein. Twenty-five percent (25% ) of the annual premiumis fully earned as of the inception date of the policy.

EK I Annual

u Flatu Flat Fully Earned

u Term$735,878.00 MINIMUM & DEPOSIT

ED Adjustable at a Rate of: $1.43 PER $1 ,000.00 OF GROSS RECE IPTSEstimated Exposure: $514,600,000.00

Item 9. Endorsements and forms attached to this Policy:ADECI (E D. 10/00); SIGEND T (10/00); OCCUR (ED. 12/00)

ENDORSEMENTS 1 THROUGH 18

Countersignature:

Countersignature Date: January 21, 2002

'S E R V I C E F E E F U L L Y E A R N E D "

Authorized Representative:

SHG Insurance Services

P.O. Box 1069

Solvang, CA 93464Lie. #0C17921

Countersignature:"This contract Is registered and delivered as a surplus

ne coverage under the Insurance code of the Stateo f

Washington, enacted In 1947. It Is not Issued by a

company regulated by the Washington State insurance

Comm issioner and Is not protected by any Washington State

Guaranty Fund Law."

SWb tI & CRAWFORD

Service Fee f "State Tax " /'(7,56Stamping F e e _ g _ 2 4 . 2 _ _ _ _ OCCDEC(10 /00)




ADDITIONA L DECLARA TIONS

For attachment to Policy NumberOGL065490

to complete said policy.

D s. of all premises owned by, rented to or controlled by the Named Insured (Enter "Same" if same location as address shown in Item I of the declarations).

SEE ENDORSEMENT NUMBER 18

he following discloses all hazards Insured hereunder know n to ex ist at the effective date of this policy, unless otherwise stated herein.

GENE RAL LIABILITY HAZARDS SCHEDULE

Description of HazardCode No. Premium Basis Rates Advance Premiums

Premises & Operations

INCLUDED

Gross Receipts

INCLUDED

1 3 1 PD 1 3 1 PDPer $1,000 of

INCLUDED

Gross Receipts

INCLUDED INCLUDED INCLUDED

Escalators (Number at Premises)

NOTINCLUDED

Number Insured

NO TINCLUDED

Per Landing

NO T

INCLUDED

NO T

INCLUDED

NO T

INCLUDEDNOT

INCLUDED

Independent Contractors

INCLUDED

Cost

INCLUDED

Per $1000 of cost

INCLUDED INCLUDED INCLUDED INCLUDED

,pleted Operations

INCLUDED INCLUDED INCLUDED INCLUDE D INCLUDED INCLUDED

Products

DOOR OR WINDOW MPG..52134

Gross Receipts

$514,600,000.00

Per $1,000 of

$1.43

Gross Receipts

INCLUDED $735,878.00 INCLUDED

Total Advance B1 & PD Premiums $735,878.00 INCLUDED

nen used as a premium basis:

1. "admissions" means the total number of persons, other than employees of the named insured, admitted to the event insured or to eventsconducted on the premises whether on paid admission tickets, complementary tickets or passes;

2. "cost" means the total cost to the named insured with respect to operations performed for the named insured during the policy period byindependent contractors of all work let or sub-let in connection w ith each specific project, including the cost of all labor, m aterials andequipment furnished, used or delivered for use in the execution of such w ork, whether furnished by the owner o r contractor or subcontractor,

including all fees, allowances, bonuses or comm issions made, paid or due;3. "receipts" means the gross amount of money charged by the nam ed insured for such operations by the named insured or by others during the

policy period as are rated on a receipts basis other than receipts from telecasting, broadcasting or m otion pictures, and includes taxes otherthan taxes which the named insured collects as a separate item and remits directly to a governmenthl division;

4. "remuneration" means the entire remuneration earned during the policy period by proprietors and by all employees of the nam ed insured,other than chauffeurs (except operations of m obile equipment) and aircraft pilots and co-pilots, subject to any overtime earnings or limitationof remuneration rule applitable in accordance with the manuals in use by the company;"sales" means the gross am ount of money charged by the named insured o r by others trading under his name for all goods and products soldor distributed during the policy period and charged during the policy period for installation, servicing or repair, and includes taxes, other thantaxes which the nam ed insured and such other collect as a separate item and rem it directly to a governm ental division;"billed hours" means total number of hours billed by the insured to his clients for services rendered as a security guard.

ADEC1 (ED. 10/00)




SIGNATURE ENDORSEME NT

Endorsement Number

SIGENDT (10/00)tamed Insured

IVILLGARD MANUFACTURING, INC.Policy Number

OGL065490Policy Period

12/31/01 12/31/02Effective Date of Endorsement

12/31/01to

Issued by

ILLINOIS UNION INSURANCE COM PANY

THE ONLY SIGNATURES APPLICABLE TO THIS POLICY ARE THOSE REPRESENTING THE COMPANY NAMED

ON THE FIRST PAGE OF THE DECLARATIONS.

By signing and delivering the policy to you, we state that it is a valid contract when countersigned by our authorizedrepresentative.

Illinois Union Insurance CompanyCHICAGO, ILLINOIS

GEORGE D. MULLIGAN, Secretary

Westchester Surplus Lines Insurance CompanyATLANTA, GEORGIA

GEORGE D. MULLIGAN, Secretary

Authorized Representatives

OTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE

Dennis B. Reding, President

Dennis B. Reding, President




ENDORSEM ENT

.•.

•+erne d Insured

MILGARD M ANUFACTURING, INC.• Endorsement Number

1Policy Number


12/31/01 to_ 12/31/02Effective Date of Endorsement

12/31/01Issued by


THIS E NDORSEMENT POLICY. PLEASE RE AD IT CAREFULLY.CHANGES 111EE0001

CLAIMS REPORTING

IN THE EVENT OF ANY OCCURRENCE' THAT MAY RESULT IN A CLAIM

AGAINSTTHISPOLICY,THEINSUREDSHOULDIMMEDIATELYREPORTSUCH OCCURRENCE TO:

CRAWFORD TECHNICAL SERVICES

International Loss Adjusters

3050 Saturn Street, Suite 200

Brea, California 92821' I .

Fax:(714)524-6913Tel:(714)524-6900Toll Free Number:( 8 7 7 )800-5080ACE - 144 51

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




SERVICE OF SUIT ENDORSEMENT

Named Insured

M1LGARD M ANUFACTURING, INC.. Endorsement Number

2Policy Number


12/31/01 to 12/31/02

Effective Date of Endorsement

12/31/01Issued by


THIS ENDORSEME NT

ITIS AGREED THATPOLICY AGAINSTILLINOISUPONTHEHIGHESTCOMMISSIONER,DIRECTOR,STATEORCOMMONWEALTHISSUED.THE ONE INDIRECTOR,ORSUPERINTENDENTCOMMONWEALTHWHEREAUTHORIZEDTO ACCEPTCOMPANYINANYSUCHGUTHRIE,CHIEFCOMPANIES,TWO LIBERTYPHILADELPHIA,PAOFFICERISAUTHORIZEDTHEREOF.

ITIS FURTHER AGREEDMAIL,SENDTOBRIANLITIGATION, ACE USA1601 CHESTNUT STREET,

ALL DOCUMENTS RELATING

THE INSURED HAS DELIVERED

THE INSURANCE DEPARTMENT

BEEN INSTITUTED.

OTHING HEREIN CONTAINED SHALLLIMITATIONS O F THE POLICY

CHANGES THE POLICY. PLEASE READ

SERVICE OF SUIT CLAUSE

IT CAREFULLY.E0018E

ON THISMAY BE MADE

THETITLEOF THEDELIVERED OR

COMMISSIONER,

THE STATE OR

ISHEREBYOFTHISBRIANT .ACEUSASTREET,

WHOM THE SAID

OR TRUE COPY

BY REGISTEREDBUSINESS

-TL21D,A COPY OFAND "SUIT" AS

AUTHORITY OF

"SUIT" HAS

OF THE TERMS, CONDITIONS, ORTHAN AS STATED ABOVE

SERVICE OF PROCESSIN ANY"SUIT"UNION INSURANCE COMPANY

ONEINAUTHORITYBEARINGOR SUPERINTENDENT OF INSURANCE

WHEREINTHISPOLICYI S .AUTHORITY BEARING THE TITLE

OFINSURANCEOFTHISPOLICYISDELIVEREDSERVICEOFPROCESSONBEHALF"SUIT,"ANDHEREBYDESIGNATECOUNSEL,BUSINESSLITIGATION,PLACE - TL 21D,1601 CHESTNUT19192-2211,AS THE PERSON TOTOMAILSUCHPROCESSTHAT THE INSURED SHALL,T .GUTHRIE,CHIEFCOUNSEL,COMPANIES,TWO LIBERTY PLACEPHILADELPHIA,PA19192-2211,TO THE SERVICE OF PROCESS

TO THE HIGHEST ONE IN

OF THE STATE IN WHICH THE

BE HELD TO VARY, ALTER, WAIVE OR EX TEND ANYTO WHICH THIS ENDORSEMENT IS ATTACHED OTHER




ENDORSEM ENT

Named Insured

MILGARD M ANUFACTURING, INC.Endorsement Number

3Policy Number


12/31/01 t0 12/31/02Effective Date of Endorsement

12/31/01 _Issued by


THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.E0030

SELFINSURED RETENTION (PER CLAIM)

PHIS ENDORSEMENT MODIFIES YOUR COVERAGE: THE SELFINSURED RETENTION (RETAINED LIMIT) APPLIES

PO EACH AND EVERY CLAIM MADE AGAINST YOU, REGARDLESS OF HOW MANY CLAIMS ARISE FROM A SINGLE

)CCURRENCE OR ARE COMBINED IN A SINGLE SUIT, AND THE COMPANY HAS NO DUTY TO DEFEND YOU

JNLESS AND UNTIL THE AMOUNT OF THE RETAINED LIMIT HAS BEEN EXHAUSTED BY PAYMENT OF

SETTLEMENTS, JUDGEMENTS, OR CLAIMS EXPENSE. (CLAIMS EXPENSES DO REDUCE THE RETAINED LIMIT.)

EN CONSIDERATION OF THE PREMIUM CHARGED, IT IS AGREED THE INSURANCE AFFORDED BY THE POLIC YPO WHICH THIS ENDORSEMENT IS ATTACHED IS SUBJECT TO THE FOLLOWING ADDITIONAL TERMS,

30NDITIONS AND PROVISIONS. IN THE EVENT OF A CONFLICT BETWEEN ANY OF THE TERMS, C ONDITIONS) PROVISIONS OF THE POLICY AND THIS ENDORSEMENT, THIS ENDORSEMENT SHALL CONTROL THE

'CATION OF INSURANCE TO WHICH THE POLICY APPLIES.

JNI.,ESS OTHERWISE SPECIFIED, ALL TERMS USED IN THIS ENDORSEMENT HAVE THE MEANING SET FORTH IN

PHE POLICY.

C .SELFINSURED RETENTION(A) THE TOTAL LIABILITY OF THE COMPANY SHALL NOT EXCEED THE "LIMITS OF LIABILITY" AS

SPECIFIED IN THE POLICY DECLARATIONS, COVERAGE PARTS OR.ENDORSEMENTS. THE

"LIMITS OF LIABILITY" SHALL APPLY ONLY IN EXCESS OF THE INSURED'S "SELFINSUREDRETENTION" AS SPECIFIED BELOW AND HEREINAFTER REFERRED TO AS THE "RETAINEDLIMIT".

(B) THE "RETAINED LIMIT" FOR EACH AND EVERY CLAIM ARISING AS THE RESULT OF AN

"OCCURRENCE", OR ADVERTISING OR PERSONAL INJURY OFF ENSE OR MEDICAL PAYMENTSACCIDENT FOR WHICH COVERAGE IS OTHERWISE PROVIDED UNDER THE POLICY SHALL BE:

$50,000.00

REGARDLESS OF THE NUMBER OF CLAIMS FROM A SINGLE OCCURRENCE, SUITS BROUGHT ORTHE NUMBER OF CLAIMS INCORPORATED INTO ONE SUCH SUIT.

(PAGE 1 OF 3)

;i0THING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EX TEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO W HICH THIS ENDORSEMENT IS ATTACHED OTHE R THAN AS STATED ABOVE




THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

E0030

(C) SHOULD ANY CLAIM ARISING UNDER COVERAGES A, B OR C OF THE POLICY RESULT IN A

SETTLEMENT OR JUDGEMENT NOT EXCEEDING"THE RETAINED LIMIT, INCLUDING CLAIMSEXPENSES, THEN NO CLAIMS EXPENSES, DAMAGES OR INDEMNITY SHALL BE PAYABLE BYTHE COMPANY.

(D) SHOULD ANY CLAIM ARISING UNDER COVERAGES A, B OR 'C RESULT IN A SETTLEMENT ORJUDGMENT, INCLUDING CLAIMS' EXPENSES INCURRED BY THE INSURED OR ON THE

INSURED'S BEHALF, IN THE EXCESS OF THE RETAINED LIMIT, THE COMPANY SHALL PAY

THOSE AMOUNTS IN EXCESS OF THE RETAINED LIMIT TO WHICH THIS INSURANCE APPLIESSUBJECT TO THE LIMITS OF LIABILITY AS SPECIFIED IN THE DECLARATIONS

(E) CLAIMS EXPENSES PAID BY THE COMPANY IN EXCESS OF THE RETAINED LIMIT, I.E.AFTER THE RETAINED LIMIT HAS BEEN EXHAUSTED BY. THE PAYMENT OF JUDGMENTS,SETTLEMENTS, AND CLAIMS EXPENSES INCURRED BY OR ON BEHALF OF THE INSURED,SHALL NOT REDUCE THE LIMITS OF LIABILITY AS SPECIFIED IN THE DECLARATION S.

(F) AS SENT FORTH ABOVE, THE RETAINED LIMIT SH ALL INCLUDE, AND BE REDUCED BY, A LLPAYMENTS MADE BY OR ON BEHALF OF THE INSURED FOR CLAIMS EXPENSES, AS DEFINED

BELOW.

(G) NO CLAIMS EXPENSES SHALL BE INCURRED ON BEHALF OF THE COMPANY WITHOUT ITSPRIOR CONSENT, NOR SHALL THE INSURED VOLUNTARILY ENTER INTO ANY SETTLEMENTWHICH IS IN WHOLE OR IN PART IN EXCESS OF THE RETAINED LIMIT, W ITHOUT THEEXPRESS APPROVAL OF THE COMPANY.

INSURED'S DUTIES AND RESPONSIBILITIES IN THE EVENT OF LOSS

THE INSURED'S DUTIES AND RESPONSIBILITIES AS STATED IN THE POLICY TO WHICH THISENDORSEMENT IS ATTACHED ARE NOT SUBJECT TO ANY LIMITATIONS OR MODIFICATIONS, WITHTHE EXCEPTION THAT SHOULD ANY CLAIM WITHIN THE TERMS OF THE COVERAGE BE SUBJECT TOA DEMAND FOR SETTLEMENT WHETHER BELOW THE AMOUNT OF THE RETAINED LIMIT, OR IN

EXCESS OF IT, AND SHOULD THE INSURED DECLINE TO

SETTLE SUCH CLAIM OR DEMAND OR TO TENDER THE REMAINDER OF THI S RETAINED LIMIT TOTHE COMPANY, THE COMPANY'S MAXIMUM LIABILITY SHALL BE LIMITED TO THE AMOUNT FORWHICH THE CLAIM COULD HAVE BEEN SETTLED, BUT ONLY FOR THAT PORTION OF THE

SETTLEMENT OR JUDGMENT IN EXCESS OF THE RETAINED LIMIT.

III. SPECIAL CONDITIONS

(A) IT IS AGREED THE POLICY SECTION ENTITLED "SUPPLEM ENTAL PAYMENTS" IS HEREBY

DELETED IN ITS ENTIRETY.

(B) THE INSURED SHALL RETAIN CRAWFORD TECHNICAL SERVICES AS ITS SELF-INSURANCE

SERVICE COMPANY FOR THE PURPOSES OF PROVIDING CLAIMS SERVICE. THIS SERVICESHALL NOT BE TERMINATED OR ALTERED WITHOUT THE WRITTEN PERMISSION OF THECOMPANY OR THIS POLICY SHALL BE DECLARED NULL AND VOID.

(C) LOSS SETTLEMENTS MADE BY THE INSURED OR ITS SELF-INSURANCE SERVICE COMPANYSHALL NOT BE BINDING AGAINST THE COMPANY UNLESS ENTIRELY WITHIN THE RETAINEDLIMIT, AND ONLY SETTLEMENTS FOR CLAIMS WITHIN THE COVERAGE TERMS AND

CONDITIONS OF THE POLICY SHALL REDUCE THE RETAINED LIMIT.

(PAGE 2 OF 3)

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EX TEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




THIS ENDORSEME NT CHANGE S THE POLICY. PLEASE READ IT CAREFULLY.

E0030

(D) WITH RESPECT TO ANY CLAIM PAYABLE UNDER THIS INSURANCE AND SUBJECT IN WHOLEOR IN PART TO THE RETAINED LIMIT AS PROVIDED IN THIS ENDORSEMENT, THE COMPANYSHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION TO CONTROL ANY CLAIM AND TO PAYANY PART OF OR ALL OF THE AMOUNT OF ANY SUCH LOSS INCLUDING CLAIMS EXPENSESWITHIN THE RETAINED LIMIT ON BEHALF OF AND FOR THE ACCOUNT OF THE INSURED TOAFFECT SETTLEMENT OF SAID CLAIM. AMOUNTS PAID BY THE COMPANY PURSUANT TOTHIS PARAGRAPH SHALL BE REIMBURSED TO THE COMPANY BY THE INSURED WITHIN TEN

(10) DAYS FROM THE DATE OF WRITTEN REQUEST FROM THE COMPANY TO THE INSURED.THE COMPANY SHALL HAVE THE RIGHT TO MAKE PARTIAL RECOVERIES FROM THE INSUREDWHEN PARTIAL SETTLEMENTS OR CLAIMS EXPENSES ARE INCURRED BY THE COMPANY

WITHIN THE RETAINED LIMIT AS PROVIDED BY THIS ENDORSEMENT.

(E) THE COMPANY SHALL HAVE THE RIGHT, BUT NOT THE DUTY, TO DEFEND ANY SUIT. THE

INSURED SHALL HAVE THE OBLIGATION TO DEFEND ANY CLAIM OR SUIT WHICH MAY

INVOLVE THIS COVERAGE WITHOUT RESPECT TO THE RETAINED LIMI T, AND TO SETTLE

SAME WITHIN THE RETAINED LIMIT WHERE POSSIBLE.SAID OBLIGATION TO DEFENDCONTINUES UNTIL THE RETAINED LIMITS HAVE BEEN EXHAUSTED BY SETTLEMENTS ORCLAIMS EXPENSES, OR UNTIL WRITTEN PERMISSION TO DISCONTINUE SAID DEFENSE IS

GRANTED BY THE COMPANY.

(F) FOR PURPOSES OF THIS ENDORSEMENT, THE TERM "CLAIMS EXPENSE" SHALL INCLUDE ALLFEES, COSTS, CHARGES AND EXPENSES GENERATED BY AN ATTORNEY DESIGNATED TOREPRESENT THE INSURED, AND ALL OTHER COSTS, CHARGES AND EXPENSES INCURRED INTHE INVESTIGATION, ADJUSTMENT, SETTLEMENT, ARBITRATION, DEFENSE OR APPEAL OFANY CLAIM TO WHICH THIS INSURANCE OTHERWISE APPLIES. CLAIMS EXPENSE SHALLNOT INCLUDE THE COST OF INVESTIGATING OR ADJUSTING A CLAIM BY SALARIED

EMPLOYEES OF THE INSURED, OR THE INSURED'S SELF-INSURANCE SERVICE COMPANY, OR

THE COMPANY.

:V. INSURED'S INSOLVENCY OR INABILITY TO PAY

THE INSOLVENCY, BANKRUPTCY, RECEIVERSHIP OF THE INSURED, OR ANY REFUSAL BY OR

INABILITY OF THE INSURED TO SATISFY ITS OBLIGATIONS PURSUANT TO THIS ENDORSEMENT

SHALL NOT REDUCE THE SELF-INSURED RETAINED LIMIT AS SET FORTH IN THE ENDORSEMENT,NOR SHALL IT REQUIRE THE COMPANY TO PAY ANY AMOUNTS WITHIN THE RETAINED LIMIT.

(PAGE 3 OF 3)

ING HEREIN CONTAINED SHALL BE HELD TQ VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




END ORSEMENT

Named Insured

MILGARD M ANUFACTURING, INC... Endorsement Number

5Policy Number

06L065490Policy Period

12/31/01 to 12/31/02Effective Date of Endorsement

12/31/01Issued by



ARCHITECTS, ENGINEERS AND SURVEYORS

ERRORS AND OMISSIONS EXCLUSION

IT IS AGREED THIS POLICY SHALL NOT APPL Y TO ANY LIABILITY ARISING OUT

OF PROFESSIONAL SERVICES PERFORMED BY OR FOR ANY INSURED, INCLUDING,

BUT NOT LIMITED TO:

A )THE PREPARATION OR APPROVAL OF MAPS, PLANS, OPINIONS, REPORTS,SURVEYS, DESIGNS, OR SPECIFICATIONS AND

SUPERVISORY, INSPECTION OR ENGINEERING SERVICES.

IT IS FURTHER UNDERSTOOD AND AGREED THAT THIS EXCLUSION SHALL BE

APPLICABLE AS RESPECTS ANY LIABILITY ARISING OUT OF THE PERFORMANCE BY

OR FOR ANY INSURED OR PROFESSIONAL SERVICES FOR OTHERS IN THE CAPACITY

AS AN ARCHITECT, ENGINEER OR SURVEYOR.

THING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

uuned Insured

IVIILGARD MANUFACTURING, INC.

Endorsement Number

6Policy Number



12/31/01Issued by



EXCLUSION FINANCIAL SERVICES

THIS INSURANCE DOES NOT APPLY TO "BODILY INJURY", "PROPERTY DAMAGE",

"PERSONAL INJURY" OR "ADVERTISING INJURY" RESULTING FROM THE RENDERING OF OR

THE FAILURE TO RENDER FINANCIAL SERVICES BY ANY INSURED TO OTHERS. FOR THE

PURPOSE OF THIS EXCLUSION, FINANCIAL SERVICES INCLUDE BUT ARE NOT LIMITED TO:

1. PLANNING, ADMINISTERING OR ADVISING ON:

A. ANY

1) INVESTMENT,

2) PENSION

3) ANNUITY,

4) SAVINGS,

5) CHECKING; OR6) INDIVIDUAL RETIREMENT PLAN, FUND OR ACCOUNT;

B. THE ISSUANCE OR WITHDRAWAL OF ANY BOND, DEBENTURE, STOCK OR OTHER

SECURITIES;

C. THE TRADING OF SECURITIES, COMMODITIES OR CURRENCIES; OR

D. ANY ACQUISITIONS OR MERGERS;

2. ACTING AS A DIVIDEND DISBURSING AGENT, EXCHANGE AGENT, REDEMPTION OR

SUBSCRIPTION AGENT, WARRANT OR SCRIP AGENT, FISCAL OR PAYING AGENT, TAXWITHHOLDING AGENT, ESCROW AGENT, CLEARING AGENT, OR ELECTRONIC FUNDS

TRANSFER AGENT;

3. LENDING, OR ARRANGING FOR THE LENDING OF MONEY, INCLUDING CREDIT CARD,

DEBIT CARD, LEASING OR MORTGAGE OPERATIONS OR ACTIVITIES OR INTERBANK

TRANSFERS;

4. REPOSSESSING OF REAL OR PERSONAL PROPERTY FROM A BORROWER OR ACTING AS AN

ASSIGNEE FOR THE BENEFIT OF CREDITORS;

5. CHECKING OR REPORTING OF CREDIT;

6. MAINTAINING OF FINANCIAL ACCOUNTS OR RECORDS;

7. TAX PLANNING, TAX ADVISING OR THE PREPARATION OF TAX RETURNS; OR

8. SELLING OR ISSUING TRAVELERS CHECKS, LETTERS OF CREDIT, CERTIFIED CHECKS,

BANK CHECKS OR MONEY ORDERS.

THING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




E N D O R S E M E N T


ADDITIONAL INSURED (BLANKET)

IT IS AGREED COVERAGE IS PROVIDED TO THE ADDITIONAL INSURED( S) NA MED IN

THIS ENDORSEMENT AS FOLLOWS:

A. THE TERM "ADDITIONAL INSURED" SHALL ALSO INCLUDE ANY PERSON OR ORGANIZATIONSPECIFICALLY DESIGNATED AN "ADDITIONAL INSURED" ON AN INDIVIDUAL CERTIFICATE OFINSURANCE APPROVED BY THE COMPANY AND WHERE AN ADDITIONAL PREMIUM HAS BEEN CHARGEDFOR EACH "ADDITIONAL INSURED" THERETO. ANY PERSON OR ORGANIZATION NOT

SPECIFICALLY SHOWN AS AN ADDITIONAL INSURED ON A CERTIFICATE OF INSUR ANCE APPROVEDBY THE COMPANY AND FOR WHICH AN ADDITIONAL PREMIUM HAS NOT BEEN PAID THEREWITH ISPROVIDED NO COVERAGE.

FAILURE OF THE COMPANY TO ACCEPT OR REJECT ANY CERTIFICATE OF INSURANCE OR

ADDITIONAL INSURED ENDORSEMENT, INCLUDING ADDITIONAL PREMIUM CHARGES, DOES NOTEXTEND ADDITIONAL INSURED STATUS BEYOND THAT WHICH IS GRANTED HEREIN. IT IS

AGREED THIS ADDITIONAL INSURED ENDORSEMENT SHALL PREVAIL AND APPLY TO ANY

ADDITIONAL INSURED.

C. COVERAGE FOR ANY ADDITIONAL INS URED SHALL INCEPT AT 12:01 A.M. ON THE DATE THECERTIFICATE DESIGNATING SUCH PERSON OR ORGANIZATION AS AN ADDITIONAL INSURED IS

APPROVED BY THE COMPANY.

D. THE APPLICABLE LIMIT OF THE COMPANY'S LIABILITY SHALL NOT BE INCREASED BY THEINCLUSION OF ANY NUMBER OF ADDITIONAL INSUREDS.

E. OTHER THAN AS EXPRESSLY MODIFIED HEREIN, COVERAGE FOR THE ADDITIONAL INSURED ISGOVERNED BY THE TERMS AND CONDITIONS OF THIS POLICY, INCLUDING THE INSURING

AGREEMENTS.

F. COVERAGE PROVIDED FOR ANY ADDITIONAL INSURED IS ONLY TO THE EXTENT THE ADDITIONALINSURED IS HELD LIABLE FOR THE NEGLIGENCE OF THE NAMED INSURED. NO COVERAGE ISAFFORDED FOR LIABILITY BASED UPON THE CONDUCT OF THE ADDITION AL INSURED.

G. THE DUTY TO DEFEND AND INDEMNIFY THE ADDITIONAL INSURED SEEKING COVERAGE PURSUANTTO THIS ADDITIONAL INSURED ENDORSEMENT IS EXCESS TO ANY PRIMARY INSURANCE WHICHIDENTIFIES THE ADDITIONAL INSURED AS A NAMED INS URED. THIS APPLIES REGARDLESS OFANY APPLICABLE DEDUCTIBLES OR SELFINSURED RETENTIONS THE A DDITIONAL INSURED MAY

OWE TO THE PRIMARY INSURER.

)THING HEREIN CONTAINED SHALL BE HE LD TO VARY, ALTER, WAIVE OR EX TEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEM ENT IS ATTACHED OTHER THAN AS STATED ABOVE

Endorsement Number

7Effective Date of Endorsement

12/31/0112/31/02to

Issued by


lamed Insured

MILGARD M ANUFACTURING, INC.Policy NumberPolicy Period

OGL06549012/31/01




ENDORSEMENT

gamed I n s u r e d

MILGARD M ANUFACTURING, INC.

Endorsement Number

8Policy Number


12/31/01 to 12/31/02Effective Dote of Endorsement

12/31/01Issued by



DESIGNATED WORK EXCLUSION - E.I.F.'S

CT IS AGREED, THIS INSURANCE DOES NOT APPLY TO "BODILY INJUR Y", "PERSONALINJURY" OR "PROPERTY DAMAGE" AS FOLLOWS:

1. THE DESIGN, MANUFACTURE,CONSTRUCTION,FABRICATION,PREPARATION,INSTALLATION, APPLICATION, MAINTENANCE OR REPAIR, INCLUDING REMODELING,

SERVICE, CORRECTION, OR REPLACEMENT, OF AN "EXTERIOR INSULATION ANDFINISH SYSTEM" (COMMONLY REFERRED TO AS SYNTHETIC STUCCO) OR ANY PARTTHEREOF, OR ANY SUBSTANTIALLY SIMILAR SYSTEM OR ANY PART THEREOF,

INCLUDING THE APPLICATION OR USE OF CONDITIONERS, PRIMERS, ACCESSORIES,

FLASHINGS, COATINGS, CAULKINGS OR SEALANTS IN CONNECTION WITH SUCH A

SYSTEM.

2. ANY WORK OR OPERATIONS WITH RESPECT TO ANY EXTERIOR COMPONENT, FIXTUREOR FEATURE OF ANY STRUCTURE IF ANY "EXTERIOR INSULATION AND FINISH

SYSTEM" IS USED ON ANY PART OF THAT STRUCTURE.

FOR THE PURPOSES OF THIS ENDORSEMENT, AN "EXTERIOR INSULATION AND FINISHSYSTEM" MEANS AN EXTERIOR CLADDING OR FINISH SYSTEM USED ON ANY PART OF ANY

STRUCTURE, AND CONSISTING OF:

a) A RIGID OR SEMI-RIGID INSULATION BOARD MADE OF EXPANDED POLYSTYRENE

OR OTHER MATERIALS, AND

b) THE ADHESIVE AND/OR MECHANICAL FASTENERS USED TO ATTACH THE

INSULATION BOARD TO THE SUBSTRATE, AND

c)A REINFORCED BASE COAT, AND

d) A FINISH COAT PROVIDING SURFACE TEXTURE AND COLOR.

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO W HICH THIS ENDORSEMENT IS ATTACHED OTHE R THAN AS STATED ABOVE




Endorsement Number

9

Named Insured

MILGARD M ANUFACTURING, INC.Policy Number


12/31/01 12/31/02


12/31/01Issued by


ENDORSEMENT


PROFESSIONAL LIABILITY EXCLUSION

IT IS AGREED SUCH INSURANCE AS IS AFFORDED BY THIS

POLICY SHALL NOT APPLY TO ANY ERROR OR OMISSION,

MALPRACTICE OR MISTAKE OF A PROFESSIONAL NATURE

COMMITTED OR ALLEGED TO HAVE BEEN COMMITTED BY OR ON

BEHALF OF ANY INSURED IN THE CONDUCT OF ANY OF AN

INSURED' S BUSINESS ACTIVITIES.

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEN D ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE





.arned Insured


Endorsement Number

10Policy Number



_ 12/31/01Issued by



ABSOLUTE TERRORISM EXCLUSION

NOTWITHSTANDING ANY PROVISION TO THE CONTRARY WITHIN THIS POLICY IT ISAGREED THIS POLICY EXCLUDES LOSS, DAMAGE, COST OR EXPENSE OF

WHATSOEVER NATURE DIRECTLY OR INDIRECTLY CAUSED BY, RESULTING FROM OR

IN CONNECTION WITH ANY ACT OF TERRORISM REGARDLESS OF ANY OTHER CAUSEOR EVENT CONTRIBUTING CONCURRENTLY OR IN ANY OTHER SEQUENCE TO THE

LOSS.

FOR THE PURPOSE OF THIS POLICY, AN ACT OF TERRORISM SHALL MEAN EITHER:

- ANY ACT OF ANY PERSON OR PERSONS EITHER ACTING ALONE OR ONBEHALF OF OR IN CONNECTION WITH ANY ORGANIZATION OR GROUP

WITH ACTIVITIES DIRECTED TOWARDS:

• OVERTHROWING,

• INTIMIDATING,

COERCING, OR

INFLUENCING

- ANY GOVERNMENT OR OF ITS POPULOUS OR ITS ECONOMIC,

POLITICAL OR SOCIAL SYSTEMS, BY:

• FORCE,

• VIOLENCE,

• WEAPONS OF MASS DESTRUCTION,

• THE DESTRUCTION, DISRUPTION OR SUBVERSION OF

COMMUNICATION AND INFORMATION SYSTEM INFRASTRUCTURES

AND/OR ITS CONTENT THEREOF, OR,

SABOTAGE, AND/OR,• THREAT THEREFROM, OR,

- AN ACT THAT IS OFFICIALLY DETERMINED BY ANY FEDERAL, STATEOR LOCAL AGENCY/AUTHORITY TO BE AN ACT OF TERRORISM.

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO W HICH THIS ENDORSEMENT IS ATTACHED OTHE R THAN AS STATED ABOVE




Endorsement Number

11

l a m e d I n s u r e d

MILGARD M ANUFACTURING, INC.Policy Number



12/31/01to

Issued b y

ILLINOIS UNION INSURANCE COMPA NY

ENDORSEMENT

THIS ENDORSEMEN T CHANGES THE POL ICY. PLEASE REA D IT CAREFULLY.E0025

AMENDMENT AGGREGATE LIMITS OF INSURANCE PER PROJECT

THIS ENDORSEMENT MODIFIES INSURAN CE PROVIDED UNDER THE FOLLOWING:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM

THE GENERAL AGGREGATE LIMIT UNDER LIMITS OF INSURANCE

(SECTION III) APPLIES SEPARATELY TO EACH OF YOUR

PROJECTS AWAY FROM PREMISES OWNED BY OR RENTED TO YOU.

NOTHING HERE IN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERM S, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEM ENT IS ATTACHED OTHER THAN AS STATED ABOVE




gamed Insured


Endorsement Number

12Policy Number



12/31/01toIssued by


ENDORSEMENT


EMPLOYEE BENEFITS LIABILITY

IT IS AGREED THAT THE POLICY IS AMENDED TO INCLUDE THE FOLLOWING:

1. EMPLOYEE BENEFITS LIABILITY:

SUBJECT TO THE TERMS, CONDITIONS AND EXCLUSIONS CONTAINED IN THE POLICY OR SET FORTH BELOW,THE COMPANY WILL PAY ON BEHALF OF THE INSURED THOSE SUMS WHICH THE INSURED SHALL BECOMELEGALLY OBLIGATED TO PAY, ON ACCOUNT OF ANY CLAIM MADE AGAINST THE INSURED AND CAUSED BYNEGLIGENT ACT, ERROR OR OMISSION OF THE INSURED OR ANY OTHER PERSON F OR WHOSE ACTS THEINSURED IS LEGALLY LIABLE IN THE ADMINISTRATION OF THE INSURED'S EMPLOYEE BENEFIT PROGRAMS ASDEFINED HEREIN.

LIMIT OF LIABILITY:

EACH CLAIM$1,000,000.00 AGGREGATE$1,000,000.00 2DEFINITIONS:A. "EMPLOYEE BENEFIT PROGRAMS" THE TERM "EMPLOYEE BENEFIT PROGRAM" SHALL BE LIMITED TOGROUP LIFE INSURANCE, GROUP ACCIDENT OR HEALTH INSURANCE, PENSION PLANS, EMPLOYEE STOCKSUBSCRIPTION PLANS, WORKER'S COMPENSATION, UNEMPLOYMENT INSURANCE, SOCIAL SECURITY AND

DISABILITY BENEFITS.

B. "ADMINISTRATION" THE UNQUALIFIED WORD "ADMINISTRATION", WHEREVER USED, SHALL ONLY MEAN:

1) GIVING COUNSEL TO EMPLOYEES WITH RESPECT TO EMPLOYEE BENEF IT PROGRAMS;

2) INTERPRETING EMPLOYEE BENEFIT PROGRAMS;

3) HANDLING OF RECORDS IN CONNECTION WITH EMPLOYEE BENEFIT PROGRAMS;

4 ) EFFECTING ENROLLMENT OF EMPLOYEES UNDER EMPLOYEE BENEFIT PROGRAMS.

PROVIDED ALL SUCH ACTS ARE AUTHORIZED BY THE NAMED INSURED.

C. "OCCURRENCE" FOR THE PURPOSE OF THE COVERAGE AFFORDED BY THIS ENDORSEMENT THE TERM"OCCURRENCE" AS USED IN THIS POLICY SHALL MEAN A CLAIM BROUGHT AGAINST THE INSURED DURINGTHE POLICY PERIOD. IF DURING THE POLICY PERIOD THE INSURED SHALL BECOME AWARE OF ANY EVENTWHICH MAY SUBSEQUENTLY GIVE RISE TO A CLAIM AGAINST THEM BY REASON OF ANY NEGLIGENT ACT,ERROR OR OMISSION AND SHALL DURING 'THE POLICY PERIOD GIVE WRITTEN NOTICE TO THE COMPANY OFSUCH EVENT, ANY CLAIM WHICH MAY SUBSEQUENTLY BE MADE AGAINST THE INSURED ARISING OUT OF

THAT NEGLIGENT ACT, ERROR OR OMISSION SHALL BE DEEMED FOR THE PURPOSES OF THIS ENDORSEMENTTO HAVE BEEN MADE DURING THE POLICY PERIOD.

3. EXCLUSIONS:

THE INSURANCE AFFORDED BY THIS ENDORSEMENT SHALL NOT APPLY AS RESPECTS ANY CLAIM MADE AGAINSTTHE INSURED WHICH IS BASED UPON THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 197 4, PUBLIC

LAW 93-406, COMMONLY REFERRED TO AS THE PENSION REFORM ACT OF 1974 , AND AMENDMENTS THERETO,

OR SIMILAR PROVISIONS OF ANY FEDERAL STAT E OR LOCAL STATUTORY LAW OR COMMON LAW.

[NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EX TEND ANY OF THE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

.amed Insured

MILGARD M ANUFACTURING, INC.. Endorsement Number

13Policy Number


12/31/01 to 12/31/02_ Effective Date of Endorsement

12/31/01Issued by


THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

SPECIFIED PRODUCTS LIABILITY LIMITATION

E0034

ORNOTHING

ITISAGREED,COVERAGEUNDERTHISPOLICYISRESTRICTEDTO

LIABILITY FOR BODILY INJURY OR PROPERTY DAMAGE ARISING OUT OF

THE FOLLOWING SPECIFIED PRODUCT (S ) :

WINDOWS, DOORS & GLASS, THEIR

COMPONENTS & RELATED ACCESSORIES

HEREIN CONTAINED SHALL BE HELD TO V ARY, ALTER, WAIVE OR EXTEND ANY OF THE TERMS, CONDITIONS,LIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

am ed Insured

MILGARD M ANUFACTURING, INC.- Endorsement Number

14Policy Number



12/31/01Issued by


(THIS

CH E

P ;

rh-

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.E 0

CONTINGENT EMPLOYER' S LIABILITY "STOP GAP"

027

MOST

INJURY

SCHEDULE

ENDORSEMENT APPLIES ONLY TO THOSE COVERAGES FOR WHICH A LIMIT IS SHOWN)

A. BODILY INJURY BY ACCIDENT$1,000,000EACH EMPLOYEE

B . BODILY INJURY BY DISEASE$1,000,000EACH EMPLOYEE

E gINCLUDED0EXCLUDED

C. SIR$50,000EACH EMPLOYEE

STATE(S)IN WHICH THIS COVERAGE APPLIES IS (ARE):WHERE REQUIRED

GENERAL AGGREGATE LIMITS, AS SHOWN IN THE DECLARATIONS PAGE OF THE POLICY,IS THE

COMPANY WILL PAY FOR ALL D AMAGES CAUSED BY BODILY INJURY BY ACCIDENT OR DUE TO BODILY

BY DISEASE.

PHE COMPANY,IN CONSIDERATION OF THE PAYMENT OF THEPREMIUM AND SUBJECT TO ALL OF THE

?ROVISIONS OF T HE POLICY NOT EXPRESSLY MODIFIED HERE IN,AGREES WITH THE NAMED INSURED AS

F OLLOWS :

I.INSURING AGREEMENT

A.TO PAY ON BEHALF OF THE INSURE D ALL SUMS WHICH THE INSURED SHALL BECOME LEGALLY

OBLIGATED TO PAY AS DAMAGES BE CAUSE OF BODILY INJURY BY ACCIDE NT OR DISEASE(IFAPPLICABLE), INCLUDING DEATH AT ANY TIME RESULTING THEREFROM,

1. SUSTAINED IN THE UNITED STATES OF AMERICA,ITS TERRITORIES OR POSSESSIONS, OR

CANADA BY ANY EMPLOYEE OF THE INSURED ARISING OUT OF AND IN T HE COURSE OF HIS

EMPLOYMENT BY THE INSURED EITHER IN OPERATIONS IN A ST ATE DESIGNATED IN THE

SCHEDULE OR IN OPERATIONS NECESSARY AND INCIDENTAL THERETO, OR

2. SUSTAINEDWHI LETEMPORARILYOUTSIDEOFTH EUNITEDSTATESOFAMERICA,ITS

TERRITORIES OR POSSESSIONS, OR CANADA BY ANY EMPLOYEE OF THE INSURED WHO IS ACITIZEN OR RESIDENT OF THE UNITED STATES OF AMERICA OR CANADA ARISING OUT OF AND

IN THE COURSE OF HIS EMPLOYMENT BY THE INSURED IN CONNECTION WITH OPERATIONS IN A

STATE DESIGNATED IN THE SCHEDULE; HOWEVER, THIS INSURANCE DOES NOT APPLY TO ANY

SUIT BROUGHT IN OR ANY JUDGEMENT RENDERED BY ANY COURT OUTSIDE THE UNITED STATES

OF AMERICA, ITS TERRITORIES OR POSSESSIONS OR CANADA OR TO AN ACTION ON SUCH

JUDGEMENT WHEREVER BROUGHT.

(PAGE 1 OF 5)





THIS ENDORSEMEN T CHANGES THE POLICY. PLEASE READ IT CAREFULLY.E0027

B. THE COMPANY SHALL HAVE THE RIGHT AND DUTY TO DEFEND ANY SUIT AGAINST THEINSURED SEEKING SUCH DAMAGES, EVEN IF -ANY OF THE ALLEGATIONS OF THE SUITARE GROUNDLESS, FALSE OR FRAUDULENT, AND MAY MAKE SUCH INVESTIGATION,

NEGOTIATION AND SETTLEMENT OF ANY CLAIM OR SUIT AS IT DEEMS EXPEDIENT,BUT THE COMPANY SHALL NOT BE OBLIGATED TO PAY ANY CLAIM OR JUDGEMENT ORTO DEFEND ANY SUIT AFTER THE APPLICABLE LIMIT OF THE COM PANY'S LIABILITY

HAS BEEN EXHAUSTED BY PAYMENT OF JUDGEMENTS OR SETTLEMENTS.

THE COMPANY WILL PAY, IN ADDITION TO THE APPLICABLE LIMIT OF LIABILITY:

I. ALL EXPENSES INCURRED BY THE COMPANY, ALL COSTS OR EXPENSES TAXED AGAINSTTHE INSURED OR THE COMPANY AND ALL INTE REST ON THE ENTIRE AMOUNT OF ANYJUDGEMENT THEREIN WHICH ACCRUES AFTER ENTRY OF THE JUDGEME NT AND BEFORE THECOMPANY HAS PAID OR TENDERED OR DEPOSITED IN COURT THAT PART OF THE

JUDGEMENT WHICH DOES NOT EXCEED THE LIMIT OF THE COMPANY'S LIABILITY

THEREON;2. PREMIUMS ON APPEAL BONDS REQUIRED IN ANY SUCH SUIT, PREMIUMS ON BONDS TO

RELEASE ATTACHMENTS IN ANY SUCH SUIT FOR AN AMOUNT NOT IN EXCESS OF THEAPPLICABLE LIMIT OF LIABILITY OF THIS POLICY, AND THE COST OF BAIL BONDSREQUIRED OF THE INSURED BECAUSE OF ACCIDENT TO WHICH THIS POLICY APPLIES,

NOT TO EXCEED $250 PER BAIL BOND, BUT THE COMPANY SHALL HAVE NO OBLIGATIONTO APPLY OR FURNISH SUCH BONDS;

3. EXPENSES INCURRED BY THE INSURED FOR FIRST AID TO OTHERS AT THE TIME OF ANACCIDENT, FOR BODILY INJURY TO WHICH THIS POLICY APPLIES;

4. REASONABLE EXPENSES INCURRED BY THE INSURED AT THE COMPANY'S REQUEST INASSISTING THE COMPANY IN THE INVESTIGATION, NEGOTIATION, NEGOTIATION ORDEFENSE OF ANY CLAIM OR SUIT, INCLUDING ACTUAL LOSS OF EARNINGS NOT TOEXCEED $65 PER DAY.

C I .PERSONS INSUREDEACH OF THE FOLLOWING IS AN INSURED UNDER THIS INSURANCE TO THE EXTENT SET FORTH

BELOW:

A. IF THE NAMED INSURED IS DESIGNATED IN THE DECLARATIONS AS AN INDIVIDUAL,THE PERSON SO DESIGNATED BUT ONLY WITH RESPECT TO THE CONDUCT OF A

BUSINESS OF WHICH HE IS THE SOLE PROPRIETOR, AND A SPOUSE OF THE NAMEDINSURED WITH RESPECT TO THE CONDUCT OF SUCH BUSINESS.

B. IF THE NAMED INSURED IS DESIGNATED IN THE DECLARATIONS AS A PARTNER OR J OINTVENTURE, THE PARTNERSHIP OR JOINT VENTURE SO DESIGNATED AND ANY PARTNER OR MEMBERTHEREOF BUT ONLY WITH RESPECT TO HIS LIABILITY AS SUCH AND ONLY WHILE ACTING

WITHIN THE SCOPE OF HIS DUTIES AS SUCH.

C. IF THE NAMED INSURED IS DESIGNATED IN THE DECLARATIONS AS OTHER THAN AN

INDIVIDUAL, PARTNERSHIP OR JOINT VENTURE, THE ORGANIZATION IS SO DESIGNATED ANDANY EXECUTIVE OFFICER, DIRECTOR OR STOCKHOLDER WHILE ACTING WITHIN THE SCOPE OF

THEIR DUTIES AS SUCH.

D. THIS INSURANCE DOES NOT APPLY TO BODILY INJURY ARISING OUT OF THE CONDUCT OF ANYPARTNERSHIP OR JOINT VENTURE OF WHICH THE INSURED IS A PARTNER OR MEMBER AND WHICH

IS NOT DESIGNATED IN THIS POLICY AS A NAMED INSURED.

(PAGE 2 OF 5)






DEFINITIONS

ACCIDENT: ACCIDENT MEANS ONLY THOSE DAMAGES WHICH ARE PAYABLE BECAUSE OF BODILY INJURYOR DISEASE (IF APPLICABLE) , INCLUDING DEATH RESULTING THEREFROM, TO WHICH THIS INSURANCE

APPLIES.

ASSAULT AND BATTERY: ASSAULT AND BATTERY SHALL BE DEEMED AN ACCIDENT UNLESS COMMITTED BYOR AT THE DIRECTION OF THE INSURED.

BODILY INJURY BY ACCIDENT: THE CONTRACTION OF DISEASE IS NOT AN ACCIDENT WITHIN THEMEANING OF THE WORD "ACCIDENT" IN THE TERM "BODILY INJURY BY ACCIDENT" AND ONLY SUCH

DISEASE AS RESULTS DIRECTLY FROM A BODILY INJURY BY ACCIDENT IS INCLUDED WITHIN THE TERM"BODILY INJURY BY ACCIDENT".

DAMAGES BECAUSE OF BODILY INJURY BY ACCIDENT INCLUDING DEATH AT ANY TIME RESULTING

THEREFROM. THE WORDS "DAMAGES BECAUSE OF BODILY INJURY BY ACCIDENT INCLUDING DEATH ATANY TIME RESULTING THEREFROM" INCLUDE DAMAGES FOR CARE AND LOSS OF SERVICES AND DAMAGESFOR WHICH THE INSURED IS LIABLE BY REASON OF SUITS OR CLAI MS BROUGHT AGAINST THE INSUREDBY OTHERS TO RECOVER THE DAMAGES OBTAINED FROM SUCH OTHERS BECAUSE OF SUCH BODILY INJURYSUSTAINED BY EMPLOYEES OF THE INSURED ARISING OUT OF AND IN THE COURSE OF THEIR

EMPLOYMENT.

IV. LIMITS OF LIABILITY

A. BODILY INJURY BY ACCIDENT

THE LIMIT OF LIABILITY STATED IN THE SCHEDULE AS APPLICABLE TO "EACH EMPLOYEE" IS THETOTAL LIMIT OF THE COMPANY'S LIABILITY FOR ALL DAMAGES BECAUSE OF BODILY INJURY BYACCIDENT, INCLUDING DEATH RESULTING THEREF ROM, SUSTAINED BY ONE EMPLOYEE IN ANY ONE

ACCIDENT.

B. BODILY INJURY BY DISEASE

IF THIS POLICY COVERS BODILY INJURY BY DISEASE, THE LIMIT OF LIABILITY STATED IN THESCHEDULE AS APPLICABLE TO "EACH EMPLOYEE" IS THE TOTAL LIMIT OF THE COMPANY'S

LIABILITY FOR ALL DAMAGES BECAUSE OF BODILY INJURY BY DISEASE, INCLUDING DEATHRESULTING THEREFROM, SUSTAINED BY ONE EMPLOYEE.

THE INCLUSION HEREIN OF MORE THAN ONE INSURED SHALL NOT OPERATE TO INCREASE THE

LIMITS OF THE COMPANY'S LIABILITY.

V .POLICY PERIODTHIS POLICY APPLIES ONLY TO BODILY INJURY BY ACCIDENT OR DISEASE (IF APPLICABLE)

INCLUDING DEATH RESULTING THEREFROM, OCCURRING DURING THE POLICY PERIOD SHOWN IN THE

DECLARATIONS.

VI. EXCLUSIONS

THIS INSURANCE DOES NOT APPLY:

A. TO PUNITIVE OR EXEMPLARY DAMAGES ON ACCOUNT OF BODILY INJURY TO OR DEATH OF ANY

EMPLOYEE. IF A SUIT SHALL HAVE BEEN BROUGHT AGAINST THE INSURED FOR A CLAIM FALLINGWITHIN THE COVERAGE HEREOF, SEEKING BOTH COMPENSATORY AND PUNITIVE OR EXEMPLARYDAMAGES, THEN THE COMPANY WILL AFFORD A DEFENSE TO SUCH ACTION, WITHOUT LIABILITY,HOWEVER, FOR SUCH PUNITIVE OR EXEMPLARY DAMAGES. THIS EXCLUSION SHALL NOT APPLY INANY STATE WHERE SUCH EXCLUSION IS SPECIFICALLY PRO HIBITED BY STATUTE OR BY THE STATE

INSURANCE DEPARTMENT.

(PAGE 3 OF 5)






B. TO BODILY INJURY TO OR DEATH SUSTAINED BY A MASTER OR MEMBER OF THE CREW OF ANYVESSEL OR BY ANY EMPLOYEE OF THE INSURED IN THE COURSE OF ANY EMPLOYMENT SUBJECTTO THE UNITED STATES LONGSHOREMEN'S AND HARBOR WORKER'S COMPENSATION ACT,

WHETHER OR NOT ASSUMED BY ANY CONTRACT OR AGREEMENT.

C. TO AIRCRAFT OPERATION OR PERFORMANCE OF ANY DUTY IN CONNECTION WITH AIRCRAFT

WHILE IN FLIGHT.

D. TO ANY LIABILITY ASSUMED BY THE INSURED UNDER ANY CONTRACT OR AGREEMENT; BUTHIS EXCLUSION DOES NOT APPLY TO A WARRANTY THAT WORK PERFORMED BY OR ON BEHALFOF THE INSURED WILL BE DONE IN A WORKMANLIKE MANNER.

E. TO ANY INJURY SUSTAINED BECAUSE OF ANY ACT COMMITTED INTENTION ALLY BY OR AT THEDIRECTION OF THE INSURED, INCLUDING BUT NOT LIMITED TO ASSAULT AND BATTERY,AND/OR MURDER AND, IF THE INSURED IS A CORPORATION OR PARTNERSHIP, BY ANY

EXECUTIVE OFFICER, DIRECTOR, STOCKHOLDER OR PARTNER THEREOF. IF A SUIT SHALLHAVE BEEN BROUGHT AGAINST THE INSURED F OR A CLAIM FALLING WITHIN THE COVERAGEPROVIDED UNDER THE POLICY WHICH SEEKS INDEMNIFICATION FOR INTENTIONAL ACT S, THECOMPANY WILL AFFORD A DEFENSE TO SUCH ACTION. THE COMPANY SHALL NOT HAVE ANOBLIGATION TO PAY FOR ANY COSTS, INTEREST OR DAMAGES ATTRIBUTABLE TO INTENTIONAL

ACTS.

F. TO BODILY INJURY TO OR DEATH OF ANY EMPLOYEE EMPLOYED IN VIOLATION OF LAW WITHTHE KNOWLEDGE OR ACQUIESCENCE OF THE NAMED INSURED OR •ANY EXECUTIVE OFFICER

THEREOF.

.TO BODILY INJURY BY DISEASE UNLESS SPECIFICALLY INCLUDED IN THE SCHEDULE, ANDUNLESS WRITTEN CLAIM IS MADE OR SUIT IS BROUGHT AGAINST THE INSURED WITHIN THETHIRTY-SIX (36) MONTHS AFTER THE END OF THE POLICY PERIOD.

H. (1) TO ANY CLAIM WITH RESPECT TO WHICH THE INSURED IS DEPRIVED OF ANY DEFENSE ORDEFENSES OR IS OTHERWISE SUBJECT TO PENALTY BECAUSE OF DEFAULT IN PREMIUMPAYMENT OR ANY OTHER FAILURE TO COMPLY WITH THE PROVISIONS OF THE WORKER'SCOMPENSATION LAWS OF THE STATE DESIGNATED IN THE SCHEDULE; OR

( 2) TO ANY ASSESSMENT, PENALTY OR FINE LEVIED BY ANY REGULATORY OR INSPECTION

AGENCY OR AUTHORITY.

I. TO BODILY INJURY TO OR DEATH SUSTAINED BY ANY PERSON IN THE COURSE OF ANY

EMPLOYMENT SUBJECT TO THE FEDERAL EMPLOYER'S LIABILITY ACT, U.S. CODE ( 1946)TITLE 45, SECTION 51-60, WHETHER OR NOT ASSUMED BY ANY CONTRACT OR AGREEMENT.

J. TO ANY OBLIGATION FOR WHICH THE INSURED OR ANY CARRIER AS HIS INSURER MAY BE

HELD LIABLE UNDER ANY WORKER'S COMPENSATION, UNEMPLOYMENT COMPENSATION OR

DISABILITY BENEFITS LAW, OR UNDER ANY SIMILAR LAW.

K. TO LIABILITY ARISING OUT OF COLLUSION, CRITICISM, DEMOTION, EVALUATION,

REASSIGNMENT, DISCIPLINE, DEFAMATION, HARASSMENT, SLANDER, LIBEL, HUMILIATION,DISCRIMINATION AGAINST OR TERMINATION OF ANY EMPLOYEE, OR ANY PERSONNEL

PRACTICES, POLICIES, ACTS OR OMISSIONS.

(PAGE 4 OF 5)






VI__ ADDITIONAL CONDITIONS

A. APPLICATION:THIS COVERAGE APPLIES ONLY TO INJURY CAUSED BYI. ACCIDENT OCCURRING DURING THE POLICY PERIOD, OR

2. DISEASE (IF SHOWN IN THE SCHEDULE) DUE TO CONDITIONS CAUSING THE DISEASE,

PROVIDING THE CONDITIONS CAUSING THE DISEASE SHALL HAVE OCCURRED DURING THEPOLICY PERIOD, AND THE LAST DAY OF THE LAST EXPOSURE TO THE DISEASE IS DURINGEMPLOYMENT WITH THE INSURED. DISCOVERY OF THE INJURY MUST TAKE PLACE DURINGTHE POLICY TERM AND

"DISCOVERY" SHALL MEAN DISCOVERY BY ANY OTHER PERSON. ALL BODILY INJURY

SUSTAINED BY THE SAME PERSON AS THE RESULT OF THE ACCIDENT OR DISEASE SHALLBE DEEMED TO HAVE BEEN DISCOVERED AT THE EARLIEST DISCOVERY OF ANY OF THE

INJURY.

3. IF THIS ENDORSEMENT IS ATTACHED TO A CLAIMS MADE POLICY, THE CLAIM FOR

DAMAGES BECAUSE OF BODILY INJURY BY ACCIDENT OR BODILY INJURY BY DISEASE MUSTBE FIRST MADE AGAINST THE INSURED DURING T HE POLICY PERIOD; AND A CLAIM MUSTBE REPORTED BY THE INSURED TO US IN WRITING DURING THE POLICY PERIOD OR ANY

EXTENDED REPORTING PERIOD WE PROVIDE UNDER EXTENDED REPORTING PERIOD S.

B. DEDUCTIBLE: THE DAMAGES SUSTAINED BY EACH EMPLOYEE CAUSED BY ANY ONE ACCIDENT,WHICH WOULD OTHERWISE BE PAYABLE UNDER THIS COVERAGE PART WILL BE REDUCED BY THEDEDUCTIBLE AMOUNT STATED IN THE SCHEDULE AS ̀ EACH EMPLOYEE" PRIOR TO THE

APPLICATION OF THE COMPANY'S LIMIT OF LIABILITY FOR "EACH ACCIDENT".

THE TERMS OF THE POLICY, INCLUDING THOSE WITH RESPECT TO

I. THE COMPANY'S RIGHTS AND DUTIES WITH RESPECT TO THE DEFENSE OF SUITS AND

2. THE INSURED'S DUTIES IN THE EVENT OF AN ACCIDENT,. APPLY IRRESPECTIVE OF THEAPPLICATION OF THE DEDUCTIBLE AMOUNT.

THE COMPANY MAY PAY ANY PART OR ALL OF THE DEDUCTIBLE AMOUNT TO EFFECT

SETTLEMENT OF ANY CLAIM OR SUIT AND, U PON NOTIFICATION OF THE ACTION TAKEN, THENAMED INSURED SHALL PROMPTLY REIMBURSE THE COMPANY FOR SUCH PART OF THE

DEDUCTIBLE AMOUNT AS HAS BEEN PAID BY THE COMPANY.

THE DEDUCTIBLE SHALL APPLY TO LOSS ADJUSTMENT EXPENSE INCURRED BY THE COMPANY ON

EACH INCIDENT REPORTED TO AND INVESTIGATED BY THE COMPANY, WHETHER OR NOT LOSS

PAYMENT ON THE CLAIM IS MADE BY THE COMPANY.

LOSS ADJUSTMENT EXPENSE MEANS EXPENSE INCURRED BY THE COMPANY FOR INVESTIGATION.OF A CLAIM OR SUIT, BUT DOES NOT INCLUDE SALARIES OF EMPLOYEES OF THE COMPANY.

(PAGE 5 OF 5)

VU t HMG HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WANE OR EXTE ND ANY OF THE TE RMS, CONDMONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

milecilmurd

MILGARD MANUFACTURING

Endorsement Number

15Policy Number



12/31/01Issued by



WAIVER OF SUBROGATION

IT IS AGREED WAIVER OF SUBROGATION IS ADDED TO THIS

POLICY REGARDING ANY ADDITIONAL INSURED.

WE WAIVE ANY RIGHT OF RECOVERY WE MAY HAVE AGAINST THE

PERSON OR ORGANIZATION SHOWN IN ENDORSEMENT NUMBER ( 7 ) ,

THE ADDITIONAL INSURED ENDORSEMENT, BECAUSE OF PAYMENTS

WE MAKE FOR INJURY OR DAMAGE ARISING OUT OF "YOUR WORK"

DONE UNDER A CONTRACT WITH THAT PERSON OR ORGANIZATION.THE WAIVER APPLIES ONLY TO THE PERSON OR ORGANIZATION

SHOWN IN THE SCHEDULE.





ENDORSEMENT

.amed Insured


Endorsement Number

16Policy Number



12/31/01Issued by



POLICY FORM AMENDMENT

IT IS AGREED, POLICY FORM, SECTION I, EXCLUSION A,

PAGE 4, PARAGRAPH "Y", IS HEREBY DELETED FROM THE

POLICY.

NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF TEE TERMS, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

Named InsuredMILGARD MAN UFACTURING, INC.

Endorsement Number17

Policy Number


12/31/01 to 12/31/02


12/31/01

Issued by

ILLINOIS UNION INSURANCE COMPANY


NAMED INSURED

MILGARD MANUFACTURING, INC.

JAMES A. MILGARD & CAROLYN Y. M ILGARD & GARY C. MILGARD &

CAROL A, MILGARD, INDIVIDUALL Y DBA: M & M INVESTMENTS, A

PARTNERSHIP

KREST DISTRIBUTING, INC.

M & M PROPERTIES

MILGARD MANUFACTURING, INC. 401K SAVINGS PLAN & TRUST

MILGARD MANUFACTURING , INC. MONEY PURCHASE PLAN & TRUST

MILGARD TEMPERING, INC.

MILGARD WINDOWS

THE MILGARD FAMILY LIMITED PARTNERSHIP

NOTHING HEREIN CONTAINE D SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERM S, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEM ENT IS ATTACHED OTHER THAN AS STATED ABOVE





lamed Insured

MILGARD M ANUFACTURING, INC.Endorsement Number

18Policy Number



12/31/01Issued by



SCHEDULE OF LOCATIONS

1010 54TH AVENUE EASTTACOMA, WA984111000 SOUTH 500 WESTSALT LAKE CITY, UT841471001 54TH AVENUE EASTTACOMA, WA98424115 EAST 47 TH STREET,SUITE BBOISE, ID837141320 INDUSTRIAL DRIVEDIXON, CA956201401 THORNE ROADTACOMA, WA984241402 26TH AVENUE NW, SUITE 130GIG HARBOR, WA98335174 50E 32ND PLACEAURORA, CO800111802 SHELTON DRIVEHOLLISTER, CA950232390 WARD AVENUE, UNIT BSIMI VALLEY, CA93065244 1 MERCANTILE DRIVERANCHO CORDOVA, CA956702451 BERT DRIVEHOLLISTER, CA95023250 EAST OF 1010 54TH AVENUE EASTTACOMA, WA9841126379 DIAZ ROADTEMECULA, CA9259029600 SW SEELEYWILSONVILLE, OR970703210 BUILDERS AVENUELAS VEGAS, NV98411PAGE 1 OF 2

NOTHING HERE IN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF THE TERM S, CONDITIONS, ORLIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEM ENT IS ATTACHED OTHER THAN AS STATED ABOVE




ENDORSEMENT

tamed Insured


Endorsement Number

18Policy Number



12/31/01Issued by


THIS ENDORSEME NT

335 HOOHANA STREET,

3505 THAYER COURT

3800 136TH STREET

3900A INDUSTRY

40 NORTH MOJAVE

42374 AVENIDA

4301 INDUSTRY

464 8 FENTON STREET,

4755 WEST FLAMINGO

860 WEST CARVER

901 ALEXANDER

910 54TH AVENUE

935 BLUE GENTIAN

965 54TH AVENUE

..a THING HEREIN CONTAINED SHALLLIMITATIONS OF THE POLICY

CHANGES THE POLICY. PLEASE READ

SCHEDULE OF LOCATIONS

IT CAREFULLY.E0019

MAUI,HI96732CA92590

85284

WA98421OF THE TERMS, CONDITIONS, ORTHAN AS STATED ABOVE

BUILDING 7, UNIT SKAHULUI,AURORA,IL60504NEMARYSVILLE, WA98270DRIVETACOMA, WA98411ROADLAS VEGAS, NV89101ALVARADO, BUILDING ATEMECULA,DRIVE EASTTACOMA, WA98424SUITE BBOISE,ID83714LAS VEGAS, NV89103ROAD,SUITE 110TEMPE, AZAVENUE (WAREHOUSE)TACOMA,TACOMA, WA98424ROADEAGAN, MN55121EASTTACOMA, WA98421PAGE 2 OF 2

BE HELD TO VARY, ALTER, WAIVE OR EX TEND ANYTO WHICH THIS ENDORSEMENT IS ATTACHED OTHER




COMMERCIAL GENERAL LIABILITY(OCCURRENCE COVERAGE FORM )

various provisions in this policy restrict coverage. Read the entire

policy carefully to determine rights, duties and what is and is notcovered.

Throughout this policy the words you and your refer to the NamedInsured shown in the Declarations, and any other person ororganization qualifying as a Named Insured under this policy. Thewords we, us and our refer to the company providing this insurance.

The word insured means any person or organization qualifying assuch under WHO IS AN INSURED (SECTION II).

Other words and phrases that appear in bold face have special

meaning. Refer to DEFINITIONS (SECTION V).

SECTION I-COVERAGES

COVERAGE A. BODILY INJURY AND PROPERTYDAMAGE LIABILITY

I . INSURING AGREEMENT

a, We will pay those sums that an insured becomes legallyobligated to pay as damages for bodily injury or propertydamage to w hich this insurance applies. We w ill have theright and duty to defend any suit seeking those dam ages,unless an insured has another, policy of insurance whichobligates another insurer to provide a defense, in w hichcase, our duty to defend is excess. However, we will haveno duty to defend the insured against any suit seekingdamages for bodily injury or property damage to wh ichthis insurance does not apply. We may at our discretioninvestigate any occurrence and se ttle any claim or suit thatmay result. But:

(1 ) The amount we will pay for damages is limited asdescribed in LIMITS OF INSURANCE (SECTIONIII).

(2 ) Subject to (1) abov e, our right and duty to defend endwhen we have used up the applicable limit ofinsurance by payme nt of judgments or settlementsunder Coverages A. or B. or M edical Expenses underCoverage C.

No other obligation or liability to pay sums or perform actsor services is covered unless ex plicitly provided for underSU PPLEM ENTA R Y PA YM ENTS - COVE R A GES AAND B.

b. This insurance applies to bodily injury and propertydamage only if:

(1) The bodily injury or property damage is caused byan occurrence that takes place in the coverageterritory; and

(2 ) The bodily injury or property damage is caused byan occurrence which takes place during the policyperiod; and

(3 ) The onset of bodily injury or property damage must

take place during the policy period. This does notinclude the onset of bodily injury or propertydamage which tak es place after the expiration of thepolicy period, regardless of when such occurrencetakes place.

c. All property damage or bodily injury caused by or relatedto an occurrence is deemed to take place when the damageor injury first becomes known to anyone, regardless of

whether the dam age or injury is continuous, progressive,repeated, changing or results from ex posure to substantiallythe same general harm.

d. Dam ages for bodily injury include damages claimed byany person or organization for care, loss of services ordeath resulting at any time from the bo dily injury.

EXCLUSIONS: COVERAGE A

This insurance does not apply to:

a. Expected or Intended Injury

Bodily injury or property damage expected or intendedfrom the standpoint of an insured. This exclusion does notapply to bodily injury resulting from the use of reasonableforce to protect persons or property.

b. Contractual Liability

Bodily injury or property damage for which an insured isobligated to pay damages by reason of the assum ption ofliability in a contract or agreement This exclusion do es notapply to liability for damages:

(1 ) Assumed by the Nam ed Insured in a written contractor written agreement that is an Insured contract,provided the bodily injury or property damageoccurs subsequent to the execution of the writtencontract or written agreement and provided th

propeity damage or bodily injury results from the

negligence, fault or comparative fault of the NamedInsured and is not otherwise excluded by the terms ofthis policy; or

(2 ) That an insured would have in the absence of acontract or agreement.

c. Liquor Liability

Bodily Injury or property damage for which an insuredmay be held liable by reason of:

(1 ) Causing or contributing to the intoxication of anyperson;

(2 ) The furnishing of alcoholic beverages to a person

under the legal drinking age or under the influence ofalcohol; or

(Page 1 of 14) OCCUR (ED. 12/00)




(3) Any statute, ordinance or regulation relating to the

sale, gift, distribution or use of alcoholic beverages.

This exclusion applies if an insured is in the business of

manufacturing, distributing, selling, serving or furnishingalcoholic beverages.

d. Workers Compensation and Similar Laws

Any obligation of an insured under a workerscompensation, disability benefits or unemploymentcompensation law or any similar law.

e. Employer's Liability

Bodily injury to:

(I) An employee o f an insured arising out of and in thecourse of employment by an insured regardless of

who may be liable; or

(2) The spouse, child, parent, brother or sister of that

employee as a consequence of (I) above.

This exclusion applies:

(1 ) Whether an insured may be liable as an employer orin any other capacity; and

(2 ) To any obligation to share damages with or repaysomeone else who must pay dam ages because of theinjury, including an insured contract.

(3 ) Liability assumed by an insured in an insuredcontract.

For the purpose of this exclusion only the term employee asused in this policy includes loaned, rented, leased or

temporary employee s, as well as persons who qualify asborrowed servants or employees or persons who are or maybe deemed employees of the Named Insured or anadditional insured under the doctrines of borrowed Servant,borrowed em ployee, respondent superior or any similardoctrine, or for whom the nam ed or additional insured maybe held liable as an employer.

f.Absolute Pollution

Bodily injury or property damage which, in w hole or inpart, is caused by, results from, is attributable to,contributes to or is aggravated by, the actual, alleged orthreatened discharge, dispersal, seepage, migration, release,escape of or exposure to pollutants, regardless of thesource of the pollutants.

This exclusion applies whether the bodily injury orproperty damage is caused by, arises from, results from oris attributable to any other cause acting in conjunction with

said pollutants.

B . Aircraft. Auto or W atercraft

Bodily injury or property damage arising out of theownership, maintenance, use or entrustment to others ofany aircraft, auto or watercraft owned, operated by, rented

or loaned to a ny insured. Use includes operation, loadingand unloading.

This exclusion does not apply to:

(1) A watercraft while ashore on premises you own orrent;

(2) A w atercraft you do not own that is:

(a ) Less than 26 feet long; and

(b ) Not being used to carry persons or property for acharge;

( 3 ) Parking an auto on, or on the ways nex t to, premisesowned or rented by an insured, provided the au to isnot owned by, rented or loaned to you or an insured;

(4) Liability assumed under an insured contract for theownership, maintenance or use of aircraft or

watercraft; or

( 5 ) Bodily injury or property damage arising out of theoperation of any of the equipment listed in paragraphf.(2) or f.(3) of the definition of mobile equipm ent(Section V, Paragraph 11).

h. Mobile Equipment

Bodily injury or property damage arising out of

(1 ) The transportation of mobile equipment by an autoowned, operated by, rented or loaned to any insured;Or

(2 ) The use of mobile equipment in, or while in practiceor preparation for, a prearranged racing, speed or

demolition contest, or in any stunting activity.

W ar

Bodily injury or property damage due to w ar, whether ornot declared, or any act orcondition incident to war. W arincludes civil war, insurrection, rebellion or revolution.

Damage to Property

Property damage to:

(I) Property you own, rent or occupy;

(2) Premises you sell, give away or abandon, if the

property damage arises out of any part of thosepremises;

(3 ) Property loaned to any insured;

(4 ) Personal property in the care, custody or control of anyinsured;

(5 ) That particular part of real property on which you orany contractors or subcontractors working directly orindirectly on your behalf are performing operations, ifthe property damage arises out of those operations:Or

(Page 2 of 14) OCCUR (ED . 12/00)




(6) That particular part of any property that must berestored, repaired or replaced because your work wasincorrectly performed on it.

This exclusion applies to liability assumed under aninsured contract except that paragraphs (3), (4), (5), and(6) of this exclusion do not apply to liability assumed underan insured contract that is a side track agreement.

Paragraph (6) of this exclusion does not apply to propertydamage included in the products-completed operationshazard.

lc. Damage to Your Product

o. Asbestos/Silica Dust

Any liability for bodily injury or property damage causedby asbestosis, silicosis, mesothelioma, emphysemapneumoconiosis, pulmonary fibrosis, plcuritis,endothelioma or any lung disease or any ailment caused by,aggravated by exposure, inhalation, consumption orabsorption of asbestos fibers or dust or silica dust. Thispolicy does not have any obligation to defend norindemnify any insured for claims or suits involving or

arising directly or indirectly to exposure or allegedexposure to asbestos or silica dust in any form or mannerwhatsoever.

Fines or PenaltiesProperty damage to your product arising out of it or anypart of it.

I. Damage to Your Work

Property damage to your work, in whole or in part,

included in the product-completed operations Inward.

This exclusion does not apply if the damaged work or thework out of which the damage arises was performed onyour behalf by a subcontractor.

m . Damage to Impaired Property

Property damage to impaired property arising out of:

(I) A delay or failure by you or anyone acting on yourbehalf to perform a contract or agreement inaccordance with its'terms; or

(2) A defect, deficiency, inadequacy or dangerouscondition in your product or your work.

This exclusion does not apply to the loss of use of otherproperty arising out of sudden and accidental physicalinjury to your product or your work after it has been putto its intended use.

n. Recall of Products, Work or Impaired Property

Damages claim ed for any loss, cost or expense incurred byyou or others for the loss of use, withdrawal, recall,inspection, repair, replacement, adjustment, remova l ordisposal of:

(I ) Your product;

(2 ) Your work; or

(3 ) Impaired property;

if such product, work, or property is withdraw n or recalledfrom the market or from use by any person or organizationbecause of a known or suspected defect, deficiency,inadequacy or dangerous condition in it.

Claims based upon or arising out of a fine or penaltyimposed by or under any law, statute, ordinance of anyfederal, state or municipal government agency.

q. Punitive or Exemplary Damages

Claims for PUNITIVE or EXEMPLARY DAMAGES,fines or penalties.

r. Aircraft

Bodily injury or property damage arising out of theproducts hazard relating to aircraft including m issiles orspacecraft, any ground support or control equipment usedtherewith, and any article furnished by any insured andinstalled in aircraft, or used in connection with aircraft, orfor spare parts for aircraft, or tooling used for themanufacture thereof, including ground handling tools andequipment, training aids, instruction m anuals, blueprints,engineering or other data, advice and services and laborelating to such aircraft or articles, or to any liability arising

out of the grounding of any aircraft.

Grounding shall mean the withdrawal of one or more

aircraft from flight operations or the imposition of speed,passenger or load restrictions on such aircraft, or any parthereof sold, handled or distributed by any insured, omanufactured, assembled or processed by any other personor organization according to specifications, plans,suggestions, orders or drawings of any insured, or withtools, machinery or other equipment furnished to suchpersons or organizations by any insured, whether such

aircraft so withdrawn are owned or operated by the same ordifferent persons or organizations.

It is further agreed that wherever the word aircraft is used,it is always to include missiles, spacecraft, and any groundsupport or control equipment used therewith.

s. Absolute Earth Movement

Bodily injury or property dam age arising from, related toor resulting from earth movem ent, regardless of the causeof the earth movem ent. Earth movem ent includes landslidearthquake, subsidence, mudflow, sinkhole, erosion, loss olateral or subjacent support and the expanding, rising,falling, shifting or contracting of earth.





This exc lusion only applies to bodily injury and propertydamage that is included in the products-completedoperations hazard.

t. Nuclear Energy

Any claim for bodily injury or property damage:

(1) (a) With respect to which an insured under thepolicy is also an insured under a Nuclear EnergyLiability policy issued by Nuclear EnergyLiability Insurance Association, Mutual AtomicEnergy Liability Underwriters or NuclearInsurance Association of Canada, or would be aninsured under any such policy but for itstermination upon exhaustion of its limit ofliability; or

(b) Resulting from the hazardous properties ofnuclear material and with respect to which

(1 ) Any person o r organization is required tomaintain financial protection pursuant to theAtomic Energy Act of 1954, or any lawamendatory thereof; or

(2 ) The insured is, or had this policy not beenissued, would be, entitled to indemnity fromThe United States of America, or any agencythereof, under any agreement entered into byThe United States of America, or any agencythereof; with any person or organization.

(2) Under any medical paym ents coverage, or under anysupplementary payments provision relating to first aid,to expenses incurred with respect to bodily injuryresulting from the hazardous properties of nuclearmaterial and arising out of the operation of a nuclearfacility by any person or organization.

(3) Under any liability coverage, to bodily injury o r

property damage resulting from the hazardousproperties of nuclear material if

(a) The nuclear material:

(1 ) Is at any nuclear facility ow ned by,

operated by or on behalf of an insured or

(2 ) Has been discharged or dispersed there-

from;

(b) The nuclear material is contained in spent fuelor waste at any time possessed, handled, used,processed, stored, transported or disposed of byor on behalf of an insured; or

(c) Th e bodily injury or property damag e arises

out of the furnishing by an insured of services,materials, parts or equipm ent in connection w iththe planning, construction, maintenance,operation or use of any nuclear facility, but if

such facility is located within The United Statesof America, its territories or possessions orCanada, this Ex clusion applies only to propertydamage to such nuclear facility and anyproperty thereat.

(d) For the purposes of this ex clusion only, propertydamage includes all forms of radioactivecontamination of property.

u. Lead

Bodily injury or property damage arising out of theingestion, inhalation or absorption of lead in any form.Any loss, cost or expense arising out of any request,

demand or order that any insured or others test for, monitor,clean up, remove, contain, treat, detoxify or neutralize, or inany way respond to, or assess the effects of lead; or anyloss, cost or expense arising out of any claim or suit by oron behalf of a governmental authority for damages becauseof testing for, monitoring, cleaning up, removing,containing, treating, detoxifying or neutralizing, or in anyway responding to, or assessing the effects of lead.

v. Employment Practices

Bodily injury arising out of any:

(I) Refusal to employ;

(2 ) Termination of employment;

(3 ) Coercion,demotion, evaluation, reassignment,discipline, defamation, harassment, humiliation,discrimination or other employm ent-related practices,policies, acts or omissions; or

(4 ) Consequential bodily injury as a result of (1) through(3) above.

This exclusion applies whether the insured may be heldliable as an employer or in any capacity and to anyobligation to share damages with or to repay someone elsewho m ust pay damages because of the injury.

w. Formaldehyde Exclusion

Any liability for bodily injury or property damage arisingout of any product containing or any form of formaldehydeor chemically related compounds or substances.

Bodily injury or property damage arising out of anyactual, alleged or threatened exposure to any

electromagnetic fields.

y. Repair W ork

Claims for property damage or bodily injury arisingfrom, related to or contributed to by repair work to correctdeficiencies in work originally performed b y an insured.

z. Mold or Mildew

Any liability of an insured for bodily injury or property

damage arising from or caused by the existence of orexposure to biological elements, mold, fungus or m ildew.

orx. Electromagnetic Radiation





Ex clusions c, through n. do not apply to damage by fire to premisesrented to you, A separate limit of insurance applies to this coverage

described in the LIMITS OF INSURANCE (SECTION III).

COVERAGE B.PERSONAL INJURY AND

ADVERTISING INJURY LIABILITY

I . INSURING AGRE EME NT

a. We w ill pay those sums that you become legally obligatedto pay as damages for personal injury or adv ertisinginjury to Which this coverage part applies. We w ill havethe right and duty to defend any suit seeking thosedamages, unless an insured has another policy ofinsurance which obligates another insurer to provide adefense, in which case, our duty to defend is ex cess. Wemay at our discretion investigate any offense and settleany claim or suit that may result. But:

The amount we will pay for damages is limited asdescribed in LIMITS OF INSURANCE(SECTION III).

(2) Subject to (I) above, our right and duty to defendend when w e have used up the applicable limit ofinsurance by payment of judgm ents or settlementsunder Coverage A. or B. or Medical Expensesunder Coverage C.

No other obligation or liability to pay sums or p erformacts or services is covered unless explicitly provided forunder SUPPLEMENTARY PAYMENTS COVERAGES A AND B.

b. This insurance applies to:

(1 ) Personal injury caused by an offense arising out ofyour business, excluding adv ertising, publishing,broadcasting or telecasting done by or for you;

(2 ) Advertising injury caused by an offensecommitted in the course of advertising your goods,

products or services.

But only if the offense was committed in the coverageterritory during this policy period.

EXCLUSIONS: COVERAGE B This insurance does not apply to:

a. Ex pected or Intended Injury

Personal Injury or advertising injury expected or

intended from the standpoint of an insured.

b. Contractual liability

Personal injury or advertising injury for which aninsured is obligated to pay damages by reason of theassumption of liability in a contract or agreement. Thisexclusion does not apply to liability for damages:

(I) Assumed by the Named Insured in a written contractor written agreement that is an insured contract,provided the personal injury or advertising injuryoccurs subsequent to the execution of the written

contract or written agreement and provided theproperty damage or bodily injury results from thenegligence, fault or comparative fault of the NamedInsured and is not otherwise excluded by the terms of

this policy; or

( 2) Co verage for liability assumed by the Named Insured

in a written contract or written agreement shall onlybe to the extent of the neg ligence or fault of theNamed Insured according to applicable principles ofcomparative fault.

c. Workers Compensation and similar laws

Any obligation of an insured under a workerscompensation, disability benefits or unemploymentcompensation law or any similar law.

d. Employer's Liability

Personal Injury or Advertising Injury to:

(1 ) An emp loyee of an insured arising out of and in thecourse of employment by an insured regardless owho may be liable; or

(2 ) The spouse, child, parent, brother or sister of thatemployee as a consequence of (1) above.

This exclusion applies:

(I) Whether an insured may be liable as an employer orin any other capacity; and

(2)To any obligation to share damages with or repaysomeone else wh o must pay damages because of theinjury, including an insured contract.

(3 ) Liability assumed by an insured in an insured

contract.

For the purpose of this exclusion only the term em ployee as

used in this policy includes loaned, rented, leased ortemporary employees, as well as persons wh o qualify asborrowed servants or employees or persons who are or m ay

be deemed employees of the Named Insured or an

additional insured under the doctrines of borrowed servant,

borrowed employee, respondent superior or any similardoctrine, or for whom the named or additional insured maybe held liable as an employer.

e. Absolute Pollution

Personal Injury which, in whole or in part, is caused by,results from, is attributable to, contributes to or. is

aggravated by, the actual, alleged or threatened discharge,dispersal, seepage, migration, release, escape of or exposure

to pollutants, regardless of the source of th e pollutants.

This exclusion applies whether the personal injury iscaused by, arises from, results from or is attributable to anyother cause acting in conjunction with said pollutants.

(Page 5 of 14) OCCUR (ED. 12./00)




f. War

Personal injury due to war, whether or not declared, or anyact or condition incident to war. War includes civil wa r,insurrection, rebellion or revolution.

g. Fines or Penalties

Claims based upon or arising out of a fine or penalty

imposed by or under any law , statute, ordinance or anyfederal, state or municipal government agency.

h. Punitive or Exemplary Damages

Claims for PUNITIVE or EXEMPLARY DAMAGES,fines or penalties.

i. Personal Injury and A dvertising Injury

(I) Arising out of oral or written publication of material,if done by or at the direction of an insured withknowledge of its falsity;

(2 ) Arising out of oral or written publication of material,the first publication of which took place before thebeginning of the policy period;

(3 ) Arising out of the willful violation of a penal statuteor ordinance comm itted by or with the consent of anyinsured; or

(4 ) For which any insured has assumed liability in acontract or agreement. This exclusion does not applyto liability for damages that an insured wou ld havein the absence of a contract or agreement.

Advertising Injury arising out of:

(1 ) The failure of goods, products o r services to conformwith advertised quality or performance;

(2 ) The wrong d escription of the price of goods, productsor services;

(3 ) An offense comm itted by an insured whose businessis advertising, broadcasting, publishing or telecasting;

(4 ) Misappropriation of advertising ideas or style of

doing business;

(5 ) Infringement of copyright, title, patent or slogan; or

(6 ) Oral or written publication of material that disparagesa person's or organization's goods, products .orservices.

k. Trade Secrets

Claims of infringement, misappropriation or v iolation ofany trade secrets rights, laws or statutes.

1 .Employment Practices

Personal injury arising out of any:

(1 ) Refusal to employ;

(2 ) Termination of employment;

(3 ) Coercion, demotion, evaluation, reassignment,discipline, defamation, harassment, humiliation,discrimination or other employm ent-related practices,policies, acts or omissions; or

(4 ) Consequential personal injury as a result of ( I)through (3) above.

This exclusion applies whether the insured may be heldliable as an employer or in any capacity and to anyobligation to share damages with or to repay someoneelse who must pay damag es because of the injury.

m . Lead

Personal injury arising out of the ingestion, inhalation orabsorption of lead in any form. Any loss, cost or expensearising out of any request, demand or order that anyinsured or others test for, monitor, clean up, remove,contain, treat, detoxify or neutralize, or in any wayrespond to, or assess the effects of lead; or any loss, costor expense arising out of any claim or suit by or on behalfof a governmental authority for damages because oftesting for, monitoring, cleaning up, removing, containing,treating, detoxifying or neutralizing, or in any wayresponding to, or assessing the effects of lead.

n. Formaldehyde Exclusion

Any liability for personal injury arising out of anyproduct containing or any form of formaldehyde orchemically related compounds or substances.

o. Asbestos/Silica D ust

Any liability for personal injury caused by asbestosis,silicosis, mesothelioma, emphysema, pneumoconiosis,pulmonary fibrosis, plcuritis, endothelioma or any lung

disease or any ailment caused by, aggravated by exposure,inhalation, consumption or absorption of asbestos fibers ordust or silica dust. This policy does not have anyobligation to defend nor indemnify any insured for claimsor suits involving or arising directly or. indirectly to

exposure or alleged ex posure to asbestos or silica dust inany form or manner w hatsoever.

Electromagnetic Radiation

Personal injury arising out of any actual, alleged orthreatened exposure to any electromagnetic fields.

q. Mold or Mildew

Any liability of an insured for personal injury arisingfrom or caused by the existence of or exposure to

biological elements, mold, fungus or mildew.Absolute Earth Movement

Personal injury arising from, related to or resulting fromearth movement, regardless of the cause of the earth

movement. Earth movement includes landslideearthquake, subsidence, mudfiow, sinkhole, erosion, lossof lateral or subjacent support and the expanding, rising,falling, shifting or contracting of earth.

(Page 6 of 14) OCCUR (ED . 12/00)




SUPPLEMENTARY PAYMENTS - COVERAGES A and B

will pay, with respect to any claim or suit we defend:

1. All expenses we incur.

2. Up to $ 250 for cost of bail bonds required because of accidentsor traffic law violations arising out of the use of any vehicle towhich the Bod ily Injury Liability Coverage applies. We do nothave to furnish these bonds.

3. The cost of bonds to release attachments, but only for bondamounts within the applicable limit of insurance. We do nothave to furnish these bonds.

4. All reasonable expenses incurred by the insured at our requestto assist us in the investigation or defense of the claim or suit,including actual loss of earnings up to $ 100 a day because oftime off from work.

5. All costs awarded against an insured in the suit.

6. Prejudgment interest awarded against an insured on that part ofthe judgment we pay. If we make an offer to pay the applicablelimit of insurance, we will not pay any prejudgment interestbased on that period of time after the offer.

7. All interest on the full amount of any judgm ent that accruesafter entry of th e judgment and before w e have paid, offered topay, or deposited in court that part of the judgment that iswithin the coverage of this policy and the applicable limit ofinsurance.

These payments will not reduce the limits of insurance,1. If you are designated in the Declarations as:

(2 ) Necessary medical, surgical, x-ray and dental services,including prosthetic devices; and

(3 )Necessary ambulance, hospital, professional nursingand funeral services.

2. EXCLUSIONS

We will not pay expenses for bodily injury:

a. To any insured.

c. To a person hired to do work for or on behalf of anyinsured or a tenant of any insured.

d. To a person injured on that part of premises any insuredowns or rents that the person normally occupies.

e. To a person, whether or not an em ployee of any insured, ifbenefits for the bodily injury are payable or must beprovided under a workers' compensation or disabilitybenefits law or a similar law.

f, To a person injured while taking part in athletics.

f. Excluded under Coverage A.

g. Due to war, whether or no t declared, or any act or conditionincident to war. War includes civil war, insurrection,rebellion or revolution.

SECTION II-W HO IS A N IN SUR ED

COVERAGE C. MEDICAL PAYMEN TS

INSURING AGREEMENT

a. We will pay medical expenses as described below forbodily injury caused by an accident:

(1 ) On premises you own or rent;

(2 ) On w ays next to premises you own or rent; or

provided that:

(I) The accident takes place in the cov erage territory andduring the policy period;

(2) The ex penses are incurred and reported to us w ithinone year of the date of the accident; and

(3 ) The injured person submits to examination, at ourexpense, by physicians of our choice as often as w ereasonably require.

b. We will make these payments regardless of fault. These

payments will not exc eed the applicable limit of insurance.We w ill pay reasonable expenses for:

(1) First aid at the time of an accident;

a. An individual, you and your spouse are insureds, but onlywith respect to the conduct of a business of which you arethe sole owner an d which is set forth in the Declarations.

b. A partnership or joint venture, you are an insured. .Yourmembers, your partners, and their spouses are alsoinsureds, but only with respect to the conduct of yourbusiness.

c, An organization other than a partnership or joint venture,you are an insured. Your ex ecutive officers and directorsare insureds, but only with respect to their duties as yourofficers or directors. Your stockholders are also insureds,but only w ith respect to their liability as stockholders.

2. Each of the following is also an insured:

Your em ployees, other than your executive officers, buonly for acts within the scope of their employment by you.However, no em ployee is an insured for:

(1) Bodily injury or personal injury to you or to aco-employee while in the course of his or heremploym ent, or the spouse, child, parent, brother orsister of that co-employee as a co nsequence of suchbodily injury or personal injury, or for anyobligation to share damages w ith or repay someoneelse who must pay dam ages because of the injury; or





(2 ) Bodily injury or personal injury arising out of his orher providing or failing to provide professional healthcare services, or

(3 ) Property damage to property owned or occupied byor rented or loaned to that employee, any of your otheremployees, or any of your partners or members (ifyou are a partnership or joint venture).

b. Any person (other than your employee), or anyorganization while acting as your real estate m anager.

c. Any person or organization having proper temporary

custody of your property if you die, but only:

6. The term insured, as used in this policy, refers to all persons ororganizations who meet a definition of insured contained inSECTION II or are named an insured in an endorsementattached to the policy.

No person or organization is art insured with respect to the conductof any current or past partnership or joint venture that is not shownas a Named Insured in the Declarations.

SECTION III - LIMITS OF INSURA NCE

1. The Lim its of Insurance shown in the D eclarations and the rulesbelow fix the most w e will pay regardless of the number of:

(1 )

(2 )

With respect to liability arising out of the maintenanceor use of that property; and

Until your legal representative has been appointed.

a.

b.

c.

Insureds;

Claims made or suits brought; or

Persons or organizations mak ing claims or bringing suits.

d. Your legal representative if you die, but only w ith respect

to duties as such. That representative will have all yourrights and duties under this Coverage Part.

3. With respect to mobile equipment registered in your nameunder any motor vehicle registration law, any person is an

insured while driving such equipment along a public highwaywith your permission. Any other person or organizationresponsible for the conduct of such pe rson is also an insured,but only with respe ct to liability arising out of the operation ofthe equipmen t, and only if no other insurance of any kind isavailable to that person or organization for this liability.However, no person or organization is an insured with respectto:

a. Bodily injury to a co-employee of the person driving theequipment; or

b. Property damage to property owne d by, rented to, in thecharge of or occupied by you or the em ployer of any personwho is an insured under this provision.

4. Any organization you newly acquire or form, other than a

partnership or joint venture, and over which you maintainownership or majority interest, will qualify as a Named Insuredif there is no other similar insurance available to thatorganization. However

a. Coverage under this provision is afforded only until the

90th day after you acquire or form the organization or theend of the policy period, w hichever is earlier;

Coverage A does not apply to bodily injury or property

damage that occurred before you acquired or formed theorganization; and

c. Coverage B does not apply to personal injury oradvertising injury arising out of an offense committedbefore you acquired or formed the organization.

5. Any other person or entity nam ed by endorsement to this policyas an insured or additional insured, but only to the ex tent andwith the limitations set forth in said endorsement.

2. The General Aggregate Limit is the most we will pay for thesum of:

a. Medical expenses under coverage C;

b. Damag es under Coverage A, except damages because ofbodily injury or property damage included in theproducts-completed operations hazard; and

c. Damages under Coverage B.

3. The Products-Completed Operations Aggregate Limit is themost we will pay under Coverage A for damages because ofbodily injury and property damag e included in the products-completed operations hazard.

4. Subject to 2. above, the Personal and Advertising Injury Limit

is the most we will pay under Coverage B for the sum of alldamages because of all personal injury and all advertising

injury sustained by any one person or organization.

5. Subject to 2. or 3. above, whichever applies, the EachOccurrence limit is the most we will pay for the sum of

a. Damages under Coverage A; and

b. Medical expenses under Coverage C because of all bodily

injury and property damage arising out of any oneoccurrence.

c. The Fire Damage Limit is the most we will pay under

Coverage A for damages because of property damage topremises rented to you arising out of any one fire.

d. The Medical Ex pense Limit is the most we will pay underCoverage C for all medical expenses because of bodilyinjury sustained by any one person.

6. The mo st we w ill pay for the sum o f all damages under bodilyinjury or property damage under all issued policies for anyone claim or suit is a single aggregate limit of insurance. Thisaggregate limit of insurance is equal to the largest aggregate ofinsurance for such coverage of any single issued policy, and notthe sum thereof.

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The limits of this Coverage Part apply separately to eachconsecutive annual period and to any rem aining period of less

an 12 mo nths, starting with the beginning of the policy period

shown in the Declarations, unless the policy period is extendedafter issuance for an additional period of less than 12 months. Inthat case, the additional period will be deemed part of the lastpreceding period for purposes of determining the Limits of

Insurance.

SECTION IV - COMMERCIAL GENERAL LIABILITY

CONDITIONS

We have no duty to provide coverage or defense under thisinsurance unless you and an y other involved insured have fullycomplied with the conditions contained in this insurance.

1. BANKRUPTCY

Bankruptcy or insolvency of the insured or of the insured'sestate will not relieve us of ou r obligations under this CoveragePart.

2. CANCELLATION

a. The first Named Insured shown in the Declarations maycancel this policy by mailing or delivering to us advancewritten notice of cancellation.

b. We m ay cancel this policy by mailing or delivering to thefirst Named Insured written notice of cancellation at least:

(1 ) 10 days before the effective date of cancellation if wecancel for non-payment of premium; or

(2 ) 30 days before the effective date of cance llation if wecancel for any other reason.

c. We will mail or deliver ou r notice to the first Named

Insured's address shown in this policy.

d. Notice of cancellation will state the effective date ofcancellation. The policy period w ill end on that date.

e. If this policy is cancelled, we will send the first Nam edInsured any premium refund due as follows:

(1 ) if we cancel, the refund will be pro rata; or

(2 ) if the first Named Insured cancels, the refund may b eless than pro rata and will be computed by theCompany's customary short-rate procedure.

The cancellation will be effective even if we have not madeor offered a refund. Notwithstanding the foregoing, if theCompany has elected to audit the policy rate basis under theprovisions of Section IV. - Policy Conditions, Paragraph 4.

- EXAMINATION OF YOUR BOOK S AND RECORDShereof, the first Named Insured agrees to pay the higher of:

(1) the earned premium as computed by such audit; or

(2) the earned premium as com puted by such customaryshort-rate procedure of the minimum and deposit

premium if the first Named Insured cancels, or as

computed pro rata if the company cancels.

1 .If notice is mailed, proof of mailing will be sufficient proofof notice.

3. CHANGES

This policy contains all the agreements between you and usconcerning the insurance afforded. The first Named Insuredshown in the Declarations is authorized to mak e changes in theterms of this policy with ou r written consent. This policy's termscan be amended or w aived only by endorsement issued by usand made a part of this policy,

4. EXAMINATION OF YOUR BOOK S AND RECORDS

We may examine and audit your books and records as theyrelate to this policy at any time during the policy period and upto three years afterward.

5. INSPECTIONS AND SURVE YS

We hav e the right but are not obligated to:

a. Mak e inspections and surveys at any time;

b. Give you reports on the conditions we find; and

c. Recommend changes.

Any inspections, surveys, reports or recomm endations relateonly to insurability and the premiums to be charged. We do notmake safety inspections. We do not un dertake to perform theduty of any person or organization to provide for the he alth orsafety of workers or the public. We do not warrant thatconditions;

a. Are safe or healthful; or

b. Comply w ith laws, regulations, codes or standards.

These cond itions apply not only to us, but also to any rating,advisory rate service or similar organization which makesinsurance inspections, surveys, reports or recomm endations.

6. DUTIES IN THE EVENT OF AN OCCURRENCE,OFFENSE, CLAIM OR SUIT

a. The insured must see to it that we are notified imm ediately

of an occurrence which may result in a claim. Noticeshould include:

(1 ) How, when and where the occurrence or offense tookplace;

(2 ) The name s and addresses of any injured persons andwitnesses; and

(3 ) The nature and location of any injury or damagearising out of the occurrence or offense.

(Page 9 of 14) OCCUR (ED . 12/00)




b. If a claim is brought against an insured, the insured must:

(1 ) Immediately record the specifics of the claim or suitand the date received, and

(2 ) Notify us as soon as practicable, but not more than ten(10) days following initial receipt of the claim.

You m ust see to it that we receive written notice of the claim orsuit as soon as practicable, but no greater than ten (10) daysfollowing initial notice of an occurrence or offense. Failure tocomply w ith this notice provision may result in the eliminationof coverage under this policy.

c. You and any o ther involved insured must:

( I) Immediately send us copies of any demands, notices,summonses or legal papers received in connectionwith the claim or suit;

(2) Authorize us to obtain records and other information;

(3 ) Cooperate with us in the investigation, settlement ordefense of the claim or suit; and

(4 ) Assist us, upon our request, in the enforcemen t of anyright against any person or organization which may beliable to the insured because of injury or damage towhich this insurance may also apply.

d. The Company shall not be liable for any cost, payment,

expense (including legal expense) or obligation assumed orincurred by an insured without the Company's express

consent. Nothing in this subparag raph d. shall be construedto expand upon coverage nor lengthen or expand theperiods in which claims or suits are to be reported as setforth in paragraphs a. through c. of this Section.

7. LEGAL ACTION AGAINST US

No person or organization has a right under this Coverage Part:

a. To join us as a party or otherwise bring us into a suitasking for damages from an insured; or

b. To sue us on this Cov erage Part unless all of its terms havebeen fully complied with.

A person or organization may sue us to recover on an agreedsettlement or on a final judgment against an insured obtainedafter an actual trial; but we will not be liable for damages thatare not payable under the term s of this Coverage Part or that arein excess of the applicable limit of insurance. An agreedsettlement means a settlement and release of liability signed byus, the insured and the claimant or the claimant's legalrepresentative.

8. OTHER INSURANCE

If other insurance is available to an insured for a damage w ecover under Co verages A or B o f this policy, our obligations arelimited as follows:

a. Primary Insurance

This insurance is primary except where paragraph b. belowapplies. When other insuran ce applicable to the loss, injury

or damag e on behalf of the insured is also excess, as setforth in paragraph b. below, then we w ill share with all thatother excess insurance by the method described in c. below.

b.Excess Insurance

This insurance is excess over any other insurance namingan insured, whether such insurance is primary, excess,

contingent or contributing. This insurance may not be usedto satisfy any deductible or self-insured retention amountsan insured may ow e as a result of loss, damage or injury.

When this insurance is excess, we will have no duty underCoverage A or B to defend any claim or suit that any otherinsurer has a duty to defend.

When this insurance is excess over other insurance, we willpay only our share of the am ount of the loss, if any, thatexceeds the sum of:

(I) The total amoun t that all such other insurance wou ld

pay for the loss in the absence of this insurance; and

(2) T he total of all deductible and self-insured retentionamounts under all other insurance.

We will share the remaining loss, if any, with any otherinsurance that is not described in this Excess Insuranceprovision and was not bough t specifically to apply in excessof the Limits of Insurance show n in the Declarations of thisCoverage Part.

c. Method of Sharing

Where paragraph b. is applicable, and this insurance m ustshare with other excess insurance, the following method ofsharing shall be followed:

If all of the other contributing excess insurance permitscontribution by equal shares, we w ill follow this methodalso. Under this approach each insurer contributes equalamoun ts until it has paid its applicable limit of insurance ornone of the loss remains, whichever com es first.

If any of the other insurance does not perm it contributionby equ al shares, we w ill contribute by limits. Under thismethod, each insurer's share is ba sed upon the ratio of itsapplicable limit of insurance to the total applicable limits ofinsurance of all insurers providing excess coverage.

The above methods of sharing will also apply where noprimary insurance, as set forth in b. above, is applicable tothe loss. In such instance, all applicable deductibles and/orself-insured amounts must first be exhausted before thisinsurance will apply.

'9 . PREM IUM AUDIT

a. We will compute all premiums for this policy in accordancewith our rules and rates.

b. If the premium for this policy is designated as aMINIMUM AND DEPOSIT PREMIUM, then theCom pany shall be en titled to retain that premium in full,notwithstanding any subsequent audit showing an earnedpremium to be less than the amount designated as the

MINIMUM AND DEPOSIT PREMIUM. In no event shall

(Page 10 of 14) OCCUR (ED . 12/00)




all or any part of a MINIMUM AND DEPOSIT PREM IUMbe returnable to any Nam ed Insured predicated upon theresults of any general audit or audit of payroll, receipts orsales. Notwithstanding the foregoing, a M INIMUM AND

DEPOSIT PREMIUM is subject to an upward adjustment ifan audit shows that the total earned premium exceeds theMINIM UM AND D EPOSIT PREM IUM. In that case, theamount by which the total earned premium exceeds theMINIMUM AND DEPOSIT PREMIUM shall be due andpayable on notice to the first Named Insured.

c. The first Named Insured must keep records of theinformation we need for the premium computation, andsend us copies at such times as we m ay request.

d. If the first Named Insured refuses to allow the Com panyaccess to its records sufficiently to conduct such au dit ofthe policy term, then the Company shall, at its solediscretion, have the option to pursue either one of the

following:

( I ) To initiate all available legal and/or equitable remed iesavailable in a court of proper jurisdiction to enforceand accomplish the subject audit; or

(2) To invoice the first Named Insured for an additionalpremium equal to THE GREATE R OF twenty-f ivepercent (25%) of the original minimum and depositpremium show n on the declarations page of this policyor five thousand dollars ($5,000).

e. •Additional premiums invoiced under option (2) of theabove Section IV, Paragraph 9.d. are due and payable onsuch invoicing to the first Named Insured. Interest allowedby the Insured's state laws, or if no such laws, then tenpercent (10%) interest, shall begin to accrue thirty (30) daysafter such invoicing on all amounts due from the first

Named Insured under said Section IV, Paragraph 9.d.above. The first Nam ed Insured further agrees to pay theCom pany, upon dem and, all reasonable attorneys' fees,collection costs, and court costs required by the Com panyto enforce its rights and remedies under either option (I) oroption (2) set forth in said Section IV, Paragraph 9.d.above,

f ,if the first Named Insured fails to pay the amountdetermined to be due and owing following invoicing by theCompany, the Com pany shall have the right to rescind thepolicy in its entirety. The first Named Insured will receivea return of the amount of premium owed less the total

earned premium, if no claim has been made under thepolicy. If a claim has been made under the policy, noamount of prem ium will be returned, and the policy will berescinded as of the date of receipt of the latest claim.

10. PREMIUMS

1. The first Named Insured shown in the declarations:

a. Is responsible for the paym ent of all premiums; and

b. Will be the payee for any return premiums we pay.

2. THIS POLICY SHALL NOT TAKE EFFECT UNLESSTHE DESIGNATED PREMIUM HAS BEEN PAID.FAILURE TO PAY THE DESIGNATED PREMIUM ACTSAS A RESCISSION OF THE POLICY AND ANY

BINDER THAT MAY HAVE BEE N ISSUED, PAYMENTOF THE DESIGNATED PREMIUM CONSTITUTESACCEPTANCE OF THE POLICY AND ALL OF ITSTERMS AND CONDITIONS.

11. REPRESENTATION S

By accepting this policy, you agree:

a. The statements in the Declarations are accurate andcomplete;

b. Those statements are based upon representations you madeto us; and

c. We have issued this policy in reliance upon yourrepresentations.

d. Your representations were ex press warranties.

e. A determination that your representations were false willresult in rescission of this agreement.

12. SEPARATION OF INSUREDS

Except w ith respect to the Limits of Insurance and any rights orduties specifically assigned in this Coverage Pan to the firstNamed 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 orsuit is brought.

13.TRANSFER OF RIGHTS OF RECOVERY AGAINSTOTHERS TO US

If any insured has the right to recover all or part of any paymen twe have made under this Coverage Part, those rights are

transferred to us. An insured must do nothing after loss to

impair these rights. At our request, an insured will bring suit ortransfer those rights to us and help us enforce them.

I 4.TRANSFER OF YOUR RIGHTS AND DUTIES UND ER THISPOLICY

Your rights and duties under this policy may not be transferredwithout our written consent except in the case of death of anindividual Named Insured.

If you die, your rights and duties under this policy will be

transferred to your legal representative, but only while actingwithin the scope of duties as your legal representative. Untilyour legal representative is appointed, anyone having p roper

temporary custody of your property will have your rights andduties, but only with respect to that property.

SECTION V -DEFINITIONS

I. Advertising injury means injury other than bodily injury orpersonal injury arising out of one or more of the followingoffenses committed in the course of and through the m eans of aninsured's advertising activities:a. Oral or written publication of material that slanders or libels

a person or organization;

(Page 11 of 14) OCCUR (ED. 12/00)




b. Oral or written publication of material that violates a

person's right of privacy;

2. Auto means a land m otor vehicle, trailer or semi-trailer designed •for travel on public roads, including any attached m achinery orequipment. Auto does not include mobile equipment

3. Bodily injury means physical injury, physical sickness orphysical disease sustained by any person, including deathresulting therefrom. Bo dily injury does not include shock oremotional, mental or psyc hological distress, injury, trauma oranguish, or other similar condition.

4. Claim or Claims means a request or a demand received by anyinsured or the Company for money or services, including theservice of suit or institution of arbitration proceedings againstany insured.

5. 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 ordamage does not occur in the course of travel ortransportation to or from any place not included in a. aboveO r

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 theterritory described in a. above; or

(b ) The activities of a person whose hom e is in theterritory described in a. above, but is away for ashort time on business; and

(2) The insured's responsibility to pay damages isdetermined in a suit on the merits, in the territory

described in a. above or in a settlement we agree to.

6. Damage means the estimated money equivalent for loss or

injury sustained.

7. Hazardous properties mean radioactive, toxic or explosive

properties:

8. Impaired property means tangible property, other than your

product or your work, that cannot be used or is less usefulbecause:

a. It incorporates your product or your work, that is known

or thought to be defective, deficient, inadequate ordangerous; or

b. You have failed to fulfill the terms of a contract oragreement;

if such property can be restored to use by:

a. The repair, replacement, adjustment or removal of your

product or your work; or

b. Your fulfilling the terms of the contract or agreement.

9. Insured contract means:

a. A lease of premises;

b. A sidetrack agreement;

c. Any easem ent or real estate license agreement, except inconnection with construction or demolition operations on orwithin 50 feet of a railroad;

d. An obligation, as required by ordinance, to indemnify amunicipality, except in connection with work for amunicipality;

e. An elevator maintenance agreement;

f. That part of any other contract or agreem ent pertaining toyour business (including an indemnification of amunicipality in connection with work performed for a

municipality) under which you assume the tort liability ofanother party to pay for bodily injury or property damageto a third person or organization, but only if such bodilyinjury or property damage is not ex cluded by the terms ofthe policy, and arises from your work performed during thepolicy period.

An insured contract does not include that part of any contractor agreement:

a. That indemnifies any person or organization for bodilyinjury or property damage arising out of construction ordemolition operations, within 50 feet of any railroadproperty and affecting any railroad bridge or trestle, tracks,roadbeds, tunnel, underpass or crossing;

b. That indemnifies an architect, engineer or surveyor forinjury or damage arising out of:

(1 ) Preparing, approving or failing to prepare or approvemaps, drawings, opinions, reports, surveys, changeorders, designs or specifications; or

(2 ) Giving directions or instructions, or failing to givethem, if that is the primary cause of the injury ordamage;

c. Under which the insured, if an architect, engineer or

surveyor, assumes liability for an injury or damage arisingout of the insured's rendering or failure to renderprofessional services, including those listed in b. above andsupervisory, inspection or engineering services; or

d. That indemnifies any person or organiza tion for damag e byfire to premises rented or loaned to you.

10. Loading or unloading means the handling of property:

a. After it is moved from the place wh ere it is accepted formovem ent into or onto an aircraft, watercraft or auto;

b. While it is in or on an aircraft, watercraft or auto; or

(Page 12 of 14) OCCUR (ED . 12/00)




c, While it is being moved from an aircraft, watercraft or

auto to the place w here it is finally delivered;

out loading or unloading does not include the movement ofproperty by means of a mechanical device, other than a handtruck, that is not attached to the aircraft, watercraft or auto.

I I. Mobile equipment means any o f the following types of landvehicles, including any attached machinery or eq uipment:

a. Bulldozers, farm m achinery, forklifts and other vehiclesdesigned for use principally off public roads;

b. Vehicles maintained for use solely on or next to premisesyou own or rent;

c. Vehicles that travel on crawler treads;

d. Vehicles, whether self-propelled or not, maintainedprimarily to provide mobility to permanently mounted:

(I) Power cranes, shovels, loaders, diggers or drills; or

(2) Road con struction or resurfacing equipm ent such asgraders, scrapers or rollers;

e. Vehicles no t described in a., b., c. or d. above that are notself-propelled and are maintained primarily to providemobility to permanently attached equipment of thefollowing types:

(I) Air compressors, pumps and generators, includingspraying, welding, building, cleaning, geophysicalexploration, lighting and well servicing equipment; or

(2) Cherry pickers and similar devices used to raise or

lower workers;

f. Vehicles not described in a., b., c. or d. above maintainedprimarily for purposes other than the transportation of

persons or cargo.

How ever, self-propelled vehicles with the following types ofpermanently attached equipment are not mobile equipment butwill be considered autos:

(I) Eq uipment designed primarily for:

(a ) Snow removal;

(b ) Road maintenance but not construction orresurfacing;

(c ) Street cleaning;

(2 ) Cherry pickers and similar devices mounted onautomobile or truck chassis and used to raise or lowerworkers; and

(3 ) Air compressors, pumps and generators, includingspraying, welding, building, cleaning, geophysicalexploration, lighting and well servicing equipment.

12. Nuclear facility means:

a. Any nuclear reactor;

b. Any equipment or device designed or used for:

(I) 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 atany time the total amount of such m aterial in the custodyof an insured at the premises where such equipm ent ordevice is located consists of or contains more than 25grams of plutonium or uranium 233 or any combinationthereof, or more than 250 grams of uranium 235;

d. Any structure, basin, excavation, premises or placeprepared or used for the storage or disposal of waste, andincludes the site on which any o f the foregoing is located,all operations conducted on such site and all premises usedfor such operations.

13. Nuclear Material means source material, special nuclearmaterial or by product m aterial.

14. Nuclear reactor means any apparatus designed or used tosustain nuclear fission in a self-supporting chain reaction or tocontain a critical mass of fissionable material.

15. Occurrence means an accident, including continuous orrepeated exposure to substantially the same general harm .

16. Personal Injury means injury, other than bodily injury, oradvertising injury arising out of one or more of the followingoffenses:

a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. Wrongful entry into, or physical eviction of a person from,a room, dwelling or premises by an insured;

d. Oral or written publication of material that slanders or libelsa person or organization; or

e. Oral or written publication of material that violates aperson's right of privacy.

17. Pollutant m e a n s any solid, liquid, gaseous or thermal irritantsor contaminants, including smoke, va por, soot, fumes, acids,

sulfates, sulfites, alkalis, chemicals, waste, biological m aterial,mold, mildew and intangibles which negatively affect the

health and w elfare of people, disrupt ecological balance, ordesecrate the environment and negatively impact plants andnon-human species.

Pollutant as used herein means any form of pollution asdefined above which forms the basis for liability, whether thepollution is said to cause physical injury or not, which by

volume or timing or any other factor is said to give rise toliability.

(Page 13 of 14) OCCUR (ED. 12/00)




18. a. Products-completed operations hazard includes all

bodily injury or property damage occurring away from

premises you own or rent and arising out of your product

or your work except:

b. Any other alternative dispute resolution proceeding in

which such damages are claimed and to which you submit

with our consent.•

(I) Products that are still in your physical possession; or

(2) Work that has not yet been completed or abandoned.

b. Your work will be deemed completed at the earliest of the

following times:

(I) When all of the work called for in your contract

has been completed.

(2 ) When all of the work to be done at the site has

been completed if your contract calls for work at

more than one site.

(3 ) When that part of the work done at a job site has

been put to its intended use by any person or

organization other than another contractor or

subcontractor working on the same project.

Work that may need service, maintenance, correction,

repair or replacement, but which is otherwise

complete, will be treated as completed.

c. This hazard 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 created by the loading or unloading of it;

(2 ) The existence of tools, uninstalled equipment or

abandoned or unused materials;

(3 ) Products or operations for which the

classification in this Coverage Part or in our

manual of rules includes products or completed

operations.

19 . Property damage means 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.

20 . Source material, special nuclear material and by-product

material have the meanings given them in the Atomic Energy

Act of 1954 and any amendment thereto.

21 . Spent fuel means any fuel element or fuel component, solid or

liquid, whichha s

been used or exposed to radiation in a nuclearreactor.

22 . Suit means a civil proceeding in which damage 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

23. Waste means any material:

a. Containing by-product material other than the tailings or

wastes produced by the extraction or concentration of

uranium or thorium from any or processed primarily for its

source material content;

b. Resulting from the operation by any person or

organization or any nuclear facility included under the

first two paragraphs of the definition of nuclear facility;

and

c. Any material or substances to be recycled, reconditioned

or reclaimed, and any substance or material produced as a

by-product or side effect of any process.

24. 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 -r.presentations made at an. .,me with

respect to the quality, durability, performance or

us e 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.

25. 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


milgard manufacturing inc v. illinois union insurance company plaintiff exhibits

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