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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA



ILLINOIS UNION INSURANCE
COMPANY
525 W. Monroe Street, Suite 400
Chicago, Illinois 60661

Plaintiff,

v.

HYDRO INTERNATIONAL, PLC,
94 Hutchins Drive
Portland, Maine 04102

HYDRO INTERNATIONAL
HOLDINGS, INC.,
2925 N.W. Aloclek Drive
Hillsboro, OR 97124

HIL TECHNOLOGY, INC.,
94 Hutchins Drive
Portland, Maine 04102

and

EUTEK SYSTEMS INC.
2925 N.W. Aloclek Drive
Hillsboro, OR 97124

Defenaants.



Civil Action
No.

COMPLAINT FOR DECLARATORY 1UDGMENT
PlaintiII Illinois Union Insurance Company ('IUIC), through its undersigned
counsel, hereby asserts this Complaint against DeIendants Hydro International PLC,
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Hydro International Holdings, Inc. ('Hydro), HIL Technology, Inc., and Eutek
Systems, Inc. (collectively, the 'DeIendants), and alleges as Iollows:
INTRODUCTION
1. This action concerns Policy Number G24151785 001 (the
'Policy) issued by IUIC to Hydro Ior the Policy Period oI August 1, 2010 to
August 1, 2011. DeIendants have demanded coverage under the Policy in connection
with an action Iiled in the Commonwealth oI Pennsylvania Court oI Common Pleas
District 45, styled Sewer Authority of the City of Scranton v. Fabcor, Inc. ana
Hyaro International, PLC, HIL Technology, Inc., ana Eutek, Inc., Case No. 11-CV-
3827 (the 'Underlying Action). A true and correct copy oI the complaint in the
Underlying Action is attached hereto as Exhibit B and is incorporated in this
complaint as iI Iully reproduced herein.
2. The plaintiII in the Underlying Action, the Sewer Authority oI the
City oI Scranton ('Authority) alleged in its complaint that the DeIendants
entered into a contract with Fabcor, the general contractor oI a project to improve
Scranton`s water treatment Iacility, under which DeIendants agreed to provide two
'Grit Snail units to remove grit Irom raw wastewater. The complaint alleges that the
DeIendants breached their contractual obligation to provide satisIactory Grit Snail units,
as the units allegedly Iailed to perIorm as promised. All told, the Authority demands
Case 3:12-cv-00511-RDM Document 1 Filed 03/20/12 Page 2 of 14

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compensatory damages in the amount oI $1,000,000 together with costs,
reasonable attorneys` Iees, and any other available remedies. Exhibit B at 8.
3. In this litigation, IUIC seeks a declaration that it has no obligation to
provide coverage (including any deIense or indemnity) under the Policy with respect to
the Underlying Action, and that the Court award to IUIC such other relieI as it may
deem just and proper.
PARTIES
4. PlaintiII Illinois Union Insurance Company is a stock insurance company,
organized and incorporated under the laws oI the State oI Illinois, with its principal
place oI business and administrative oIIice in Chicago, Illinois.
5. Upon inIormation and belieI, DeIendant Hydro International PLC is a
corporation organized and existing under the laws oI the United Kingdom, with its
principal United States place oI business located in the State oI Maine, and is the
parent corporation oI the remaining DeIendants.
6. Upon inIormation and belieI, DeIendant Hydro International Holdings,
Inc. is a corporation organized and existing under the laws oI the State oI Oregon, with
its principal place oI business located in the State oI Oregon.
7. Upon inIormation and belieI, DeIendant HIL Technology, Inc., is a
corporation organized and existing under the laws oI the State oI Maine, with its
principal place oI business located in the State oI Maine.
Case 3:12-cv-00511-RDM Document 1 Filed 03/20/12 Page 3 of 14

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8. Upon inIormation and belieI, DeIendant Eutek Systems Inc. is a
corporation organized and existing under the laws oI the State oI CaliIornia, with its
principal place oI business located in Hillsboro, Oregon.
1URISDICTION AND VENUE
9. This Court has jurisdiction over the subject matter oI this Complaint
pursuant to 28 U.S.C. 1332(a) and 28 U.S.C. 2201 and 2202. IUIC and
DeIendants are oI diverse citizenship and the amount in controversy exceeds
$75,000, exclusive oI interest and costs.
10. This Court has personal jurisdiction over each oI the DeIendants pursuant
to 42 Pa. Cons. Stat. 5322 because each oI the DeIendants has engaged in
transactions or business within this State Irom which this action arises.
11. Venue lies in this Iederal district pursuant to 28 U.S.C. 1391(a)
because a substantial part oI the events or omissions giving rise to IUIC`s claims
occurred in this judicial district.
FACTS
THE POLICY
12. IUIC issued the Policy Ior the Policy Period oI August 8, 2010 to August
8, 2011. The Policy provides a General Aggregate Limit oI $2,000,000 Ior all Claims
under all Liability Coverage Sections other than Products/Completed Operations. A
true and correct copy oI the Policy is attached as Exhibit A.
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13. Fabcor, Inc., the Iirst named deIendant in the underlying action, is not
an insured under the Policy, has not sought coverage under the Policy and is not
named as a deIendant in this Complaint.
14. The Policy was issued to Hydro International Holdings, Inc. as the
Named Insured. By endorsement to the Policy, HIL Technology, Inc. and Eutek
Systems Inc. are also Named Insureds.
15. Upon inIormation and belieI, Hydro International PLC, the second
named deIendant in the Underlying Action, is a stockholder oI one or more oI the
Named Insureds under the Policy.
16. Coverage A oI the Commercial General Liability ('CGL) Coverage
in the Policy, covering 'Bodily Injury and Property Damage Liability states in
pertinent part:
We will pay those sums that the insured becomes legally
obligated to pay as damages because oI 'bodily injury or
'property damage to which this insurance applies. We will
have the right and duty to deIend the insured against any
'suit seeking those damages. However, we will have no
duty to deIend the insured against any 'suit seeking
damages Ior 'bodily injury or 'property damage to which
this insurance does not apply. We may, at our discretion,
investigate any 'occurrence and settle any claim or 'suit
that may result.

17. Coverage A(1)(b) provides in pertinent part: 'This insurance applies
to bodily injury` and property damage` only iI (1) The bodily injury` or
Case 3:12-cv-00511-RDM Document 1 Filed 03/20/12 Page 5 of 14

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property damage` is caused by an occurrence` that takes place in the coverage
territory.`
18. 'Occurrence is deIined in Section VI oI the CGL Coverage as 'an
accident, including continuous or repeated exposure to substantially the same
general harmIul conditions.
19. 'Property damage is deIined in Section VI oI the CGL Coverage as
(a) Physical injury to tangible property, including all resulting loss
oI use oI that property. All such loss oI use shall be deemed to occur
at the time oI the physical injury that caused it; or
(b) Loss oI use oI tangible property that is not physically injured.
All such loss oI use shall be deemed to occur at the time oI the
'occurrence that caused it.
20. 'Your product is deIined in Section VI oI the CGL Coverage to
mean '(1) Any goods or products, other than real property, manuIactured, sold,
handled, distributed or disposed oI by: (i) You; (ii) Others trading under your
name; or (iii) A person or organization whose business or assets you have
acquired; and (2) Containers (other than vehicles), materials, parts or equipment
Iurnished in connection with such goods or products. It also includes: (1)
Warranties or representations made at any time with respect to the Iitness, quality,
durability, perIormance or use oI 'your product; and (2) The providing oI or
Iailure to provide warnings or instructions. It '|d|oes not include vending
machines or other property rented to or located Ior the use oI others but not sold.
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21. 'Your work is deIined in Section VI oI the CGL Coverage to mean
'(1) Work or operations perIormed by you or on your behalI; and (2) Materials,
parts or equipment Iurnished in connection with such work or operations. It also
includes '(1) Warranties or representations made at any time with respect to the
Iitness, quality, durability, perIormance or use oI 'your work, and (2) The
providing oI or Iailure to provide warnings or instructions.
22. 'Impaired property is deIined in Section VI oI the CGL Coverage to
mean 'tangible property, other than your product or your work`, that cannot be
used or is less useIul because (a) It incorporates your product` or your work` that
is known or thought to be deIective, deIicient, inadequate or dangerous; or (b) You
have Iailed to IulIill the terms oI a contract or agreement; iI such property can be
restored to use by: (a) The repair, replacement, adjustment or removal oI 'your
product or 'your work; or (b) Your IulIilling the terms oI the contract or
agreement.
23. The CGL Coverage has various exclusions in Section I.2. In pertinent
part, these state that 'This insurance does not apply to:
k. Damage To Your Product
Property damage` to your product` arising out oI it or any part oI it.

l. Damage To Your Work
'Property damage to 'your work arising out oI it or any part oI it
and included in the 'products-completed operations hazard.

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This exclusion does not apply iI the damaged work or the work out oI
which the damage arises was perIormed on your behalI by a
subcontractor.

m. Damage To Impaired Property Or Property Not
Physically Injured
'Property damage to 'impaired property or property that has
not been physically injured, arising out oI:

(1) A deIect, deIiciency, inadequacy or dangerous
condition in 'your product or 'your work;
or

(2) A delay or Iailure by you or anyone acting on
your behalI to perIorm a contract or agreement
in accordance with its terms.

This exclusion does not apply to the loss oI use oI other
property arising out oI sudden and accidental physical injury
to 'your product or 'your work aIter it has been put to its
intended use.

n. Recall OI Products, Work Or Impaired Property
Damages claimed Ior any loss, cost or expense incurred by you or
others Ior the loss oI use, withdrawal, recall, inspection, repair,
replacement, adjustment, removal or disposal oI:

(1) 'Your product;

(2) 'Your work; or

(3) 'Impaired property;

iI such product, work, or property is withdrawn or recalled Irom the
market or Irom use by any person or organization because oI a
known or suspected deIect, deIiciency, inadequacy or dangerous
condition in it.

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24. The Contractors Pollution Liability Coverage in the Policy does not
apply to the Underlying Action and, in any event, Exclusion 14 oI the Contractors
Pollution Liability Coverage bars coverage Ior ~b]odily injury or property
damage arising out oI your product.
1

25. The ProIessional Liability Coverage in the Policy does not apply to
the Underlying Action and, in any event, Exclusion 14 oI the ProIessional Liability
Coverage excludes coverage Ior 'Claim(s) arising out oI your product.
THE UNDERLYING ACTIONS
26. On June 21, 2011, the plaintiII in the Underlying Action Iiled its
complaint against Fabcor, Hydro International PLC and DeIendants HIL
Technology, Inc., and Eutek, Inc.
27. The complaint in the Underlying Action alleges that on or about
November 21, 2007, Fabcor and the Authority executed a contract 'whereby
Fabcor agreed to be the general contractor on the Authority`s wastewater treatment
Iacility Phase II Improvements. Exhibit B at 7.
28. Fabcor began work on the contract in November 2007 and continued
until the summer oI 2009. Ia. at 8, 14.
29. During execution oI the contract, Fabcor installed two Grit Snail units
manuIactured and supplied by Hydro through Eutek Systems, Inc. Ia. at 10.

1
Terms in bold type herein are used as deIined in the Policy.
Case 3:12-cv-00511-RDM Document 1 Filed 03/20/12 Page 9 of 14

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30. The complaint alleges that the Grit Snails did not perIorm in
conIormance with the contract speciIications by, among other deIiciencies, not
removing the proper amount oI grit Irom the wastewater and requiring substantial
additional manual labor to keep the Grit Snail units operating. Ia. at 15.
31. The complaint alleges that the Grit Snail units` components
experienced excessive wear, requiring replacement and repair Iar more Irequently
than is normal Ior this type oI wastewater equipment. Ia. at 16.
32. The complaint Iurther alleges that the DeIendants` Iailures have
damaged the plaintiII in the Underlying Action by requiring additional
expenditures to manage the required volume oI grit, preventing the Authority Irom
accepting and treating wastewater as it is required to do under Iederal and
Pennsylvania state law, Ior which the Authority may be subject to civil penalties;
incurring costs to hire engineers to advise the Authority on how to correct the grit
removal problems; and the additional costs that the Authority will incur in
designing and constructing changes in a corrective action program at these
Iacilities. Ia. at 17-19
33. Count II oI the complaint in the Underlying Action is the only count
that names the DeIendants. Count II speciIically alleges a 'BREACH OF
CONTRACT by DeIendants Ior Iailing to provide the equipment required by the
contract speciIications and requesting compensatory damages in the amount oI
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$1,000,000, along with costs, reasonable attorney`s Iees and other just remedies.
Ia. at 27-32.
34. Count II oI the complaint in the Underlying Action does not allege
negligence by any DeIendant.
35. On July 12, 2011, DeIendants inIormed IUIC by letter oI the
Underlying Action and requested coverage.
36. IUIC commenced an investigation concerning the availability oI coverage
under the Policy Ior the Underlying Action. By letter dated July 29, 2011 IUIC
inIormed Hydro oI IUIC`s coverage views and Iully reserved its rights.. The letter is
attached as Exhibit C.
37. IUIC is presently deIending DeIendants with respect to the Underlying
Action under a Iull reservation oI rights.
CLAIM FOR DECLARATORY RELIEF:
NO DUTY TO DEFEND OR INDEMNIFY WITH RESPECT TO
UNDERLYING ACTION
38. IUIC realleges and reincorporates by reIerence herein all oI the Ioregoing
allegations.
39. The Policy bars coverage Ior the breach oI contract alleged in the
Underlying Action as it is not an 'occurrence as deIined in the Policy.
40. Exclusions 2.k and 2.l. oI the CGL Coverage exclude 'property
damage to DeIendants` product ('your product) or DeIendants` work ('your
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work), which bars coverage Ior the Underlying Action based on the Authority`s
allegation that components oI the Grit Snail units experienced excessive wear
requiring repair and replacement at a Irequency that has caused the Authority
damages.
41. The Policy does not aIIord coverage Ior the Underlying Action
pursuant to Exclusion 2.m oI the CGL Coverage because the Authority alleges that
its wastewater treatment Iacility is less useIul because oI the inadequacy oI the Grit
Snail units since it is prevented Irom treating the volumes oI wastewater required
under Iederal and Pennsylvania law.
42. The Contractors Pollution Liability Coverage in the Policy does not
apply to the Underlying Action and, in any event, Exclusion 14 oI the Contractors
Pollution Liability Coverage bars coverage Ior ~b]odily injury or property
damage arising out oI your product.
43. The ProIessional Liability Coverage in the Policy does not apply to
the Underlying Action and, in any event, Exclusion 14 oI the ProIessional Liability
Coverage excludes coverage Ior 'Claim(s) arising out oI your product.
2

44. An actual and justiciable controversy exists between IUIC and DeIendants
with respect to the parties` rights and obligations under the Policy. In particular,

2
Because the Underlying Action is still developing, IUIC reserves the right
to raise additional policy provisions and coverage deIenses and expressly does not
waive any such rights and deIenses.
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DeIendants seek coverage under the Policy Ior the Underlying Action, and IUIC
contends, Ior the reasons set Iorth here and in its July 29, 2011 correspondence, that it is
not obligated to deIend or indemniIy DeIendants with respect to the Underlying Action
because one or more oI the Policy`s terms, conditions, exclusions or limitations bar
coverage Ior the Underlying Action.
45. The entry oI a declaratory judgment concerning the application oI the
Policy`s deIinition oI 'occurrence and its various Exclusions and other terms and
conditions is necessary and would be eIIective to resolve the controversy between
the parties and will clariIy the parties` legal relations.
46. For these reasons, IUIC requests that the Court enter judgment declaring
that IUIC is not obligated to deIend or indemniIy Hydro International PLC, Hydro
International Holdings, Inc., HIL Technology, Inc., or Eutek Systems, Inc. in
connection with the Underlying Action because the Policy does not aIIord coverage Ior
the Underlying Action.
WHEREORE, IUIC prays as Iollows:
(a) that the Court enter judgment declaring that the IUIC is not
obligated to deIend any DeIendant in the Underlying Action;
(b) that the Court enter judgment declaring that the Policy does not
aIIord coverage with respect to the Underlying Action;
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(c) that the Court enter judgment declaring that the Policy does not
aIIord indemnity coverage Ior any liability sustained by Hydro
International PLC, Hydro International Holdings, Inc., HIL Technology,
Inc., or Eutek Systems, Inc. with respect to the Underlying Action;
(d) that the Court grant IUIC such other and Iurther relieI as the
Court may deem appropriate.


Dated: March 13, 2012
/s David F. Abernethy
David F. Abernethy (PA Bar # 36666)
DRINKER BIDDLE & REATH LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
Phone: (215) 988-2503
Fax: (215) 988-2757
Email: David.Abernethydbr.com

Attorney for Plaintiff Illinois Union
Insurance Company

Case 3:12-cv-00511-RDM Document 1 Filed 03/20/12 Page 14 of 14
2JS 44 (Rev. 12/07)
CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided
by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating
the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)
I. (a) PLAINTIFFS DEFENDANTS
(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE
LAND INVOLVED.
(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
II. BASIS OF JURISDICTION (Place an X in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES(Place an X in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
u 1 U.S. Government u 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State u 1 u 1 Incorporated or Principal Place u 4 u 4
of Business In This State
u 2 U.S. Government u 4 Diversity Citizen of Another State u 2 u 2 Incorporated and Principal Place u 5 u 5
Defendant
(Indicate Citizenship of Parties in Item III)
of Business In Another State
Citizen or Subject of a u 3 u 3 Foreign Nation u 6 u 6
Foreign Country
IV. NATURE OF SUIT (Place an X in One Box Only)
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
u 110 Insurance PERSONAL INJURY PERSONAL INJURY u 610 Agriculture u 422 Appeal 28 USC 158 u 400 State Reapportionment
u 120 Marine u 310 Airplane u 362 Personal Injury - u 620 Other Food & Drug u 423 Withdrawal u 410 Antitrust
u 130 Miller Act u 315 Airplane Product Med. Malpractice u 625 Drug Related Seizure 28 USC 157 u 430 Banks and Banking
u 140 Negotiable Instrument Liability u 365 Personal Injury - of Property 21 USC 881 u 450 Commerce
u 150 Recovery of Overpayment u 320 Assault, Libel & Product Liability u 630 Liquor Laws PROPERTY RIGHTS u 460 Deportation
& Enforcement of Judgment Slander u 368 Asbestos Personal u 640 R.R. & Truck u 820 Copyrights u 470 Racketeer Influenced and
u 151 Medicare Act u 330 Federal Employers Injury Product u 650 Airline Regs. u 830 Patent Corrupt Organizations
u 152 Recovery of Defaulted Liability Liability u 660 Occupational u 840 Trademark u 480 Consumer Credit
Student Loans u 340 Marine PERSONAL PROPERTY Safety/Health u 490 Cable/Sat TV
(Excl. Veterans) u 345 Marine Product u 370 Other Fraud u 690 Other u 810 Selective Service
u 153 Recovery of Overpayment Liability u 371 Truth in Lending LABOR SOCIAL SECURITY u 850 Securities/Commodities/
of Veterans Benefits u 350 Motor Vehicle u 380 Other Personal u 710 Fair Labor Standards u 861 HIA (1395ff) Exchange
u 160 Stockholders Suits u 355 Motor Vehicle Property Damage Act u 862 Black Lung (923) u 875 Customer Challenge
u 190 Other Contract Product Liability u 385 Property Damage u 720 Labor/Mgmt. Relations u 863 DIWC/DIWW (405(g)) 12 USC 3410
u 195 Contract Product Liability u 360 Other Personal Product Liability u 730 Labor/Mgmt.Reporting u 864 SSID Title XVI u 890 Other Statutory Actions
u 196 Franchise Injury & Disclosure Act u 865 RSI (405(g)) u 891 Agricultural Acts
REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS u 740 Railway Labor Act FEDERAL TAX SUITS u 892 Economic Stabilization Act
u 210 Land Condemnation u 441 Voting u 510 Motions to Vacate u 790 Other Labor Litigation u 870 Taxes (U.S. Plaintiff u 893 Environmental Matters
u 220 Foreclosure u 442 Employment Sentence u 791 Empl. Ret. Inc. or Defendant) u 894 Energy Allocation Act
u 230 Rent Lease & Ejectment u 443 Housing/ Habeas Corpus: Security Act u 871 IRSThird Party u 895 Freedom of Information
u 240 Torts to Land Accommodations u 530 General 26 USC 7609 Act
u 245 Tort Product Liability u 444 Welfare u 535 Death Penalty IMMIGRATION u 900Appeal of Fee Determination
u 290 All Other Real Property u 445 Amer. w/Disabilities - u 540 Mandamus & Other u 462 Naturalization Application Under Equal Access
Employment u 550 Civil Rights u 463 Habeas Corpus - to Justice
u 446 Amer. w/Disabilities - u 555 Prison Condition Alien Detainee u 950 Constitutionality of
Other u 465 Other Immigration State Statutes
u 440 Other Civil Rights Actions
V. ORIGIN
Transferred from
another district
(specify)
Appeal to District
Judge from
Magistrate
Judgment
(Place an X in One Box Only)
u 1 Original
Proceeding
u 2 Removed from
State Court
u 3 Remanded from
Appellate Court
u 4 Reinstated or
Reopened
u 5 u 6 Multidistrict
Litigation
u 7
VI. CAUSE OF ACTION
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
Brief description of cause:
VII. REQUESTED IN
COMPLAINT:
u CHECK IF THIS IS A CLASS ACTION
UNDER F.R.C.P. 23
DEMAND $ CHECK YES only if demanded in complaint:
JURY DEMAND: u Yes u No
VIII. RELATED CASE(S)
IF ANY
(See instructions):
JUDGE DOCKET NUMBER
DATE SIGNATURE OF ATTORNEY OF RECORD
FOR OFFICE USE ONLY
RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE
ILLINOIS UNION INSURANCE COMPANY
Cook (IL)
David F. Abernethy, DRINKER BIDDLE & REATH LLP
One Logan Square, Ste. 2000, Philadelphia PA 19103-6996
HYDRO INTERNATIONAL, PLC, HYDRO INTERNATIONAL
HOLDINGS, INC., HIL TECHNOLOGY, INC., EUTEK SYSTEMS
INC.
Cumberland (ME)
28 U.S.C. 1332(a)
Declaratory judgment that plaintiff insurer is not obligated to defend or indemnify insureds in underlying action
None
03/13/2012 /s David F. Abernethy
Case 3:12-cv-00511-RDM Document 1-1 Filed 03/20/12 Page 1 of 2
JS 44 Reverse (Rev. 12/07)
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required
by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use
of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint
filed. The attorney filing a case should complete the form as follows:
I. (a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only
the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving
both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time
of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases,
the county of residence of the defendant is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section (see attachment).
II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.C.P., which requires that jurisdictions be shown in pleadings. Place an X in one
of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an X in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the
Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box
1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the
different parties must be checked. (See Section III below; federal question actions take precedence over diversity cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section
for each principal party.
IV. Nature of Suit. Place an X in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is sufficient
to enable the deputy clerk or the statistical clerks in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select
the most definitive.
V. Origin. Place an X in one of the seven boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. When the petition
for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict
litigation transfers.
Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. When this box
is checked, do not check (5) above.
Appeal to District Judge from Magistrate Judgment. (7) Check this box for an appeal from a magistrate judges decision.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes
unless diversity. Example: U.S. Civil Statute: 47 USC 553
Brief Description: Unauthorized reception of cable service
VII. Requested in Complaint. Class Action. Place an X in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the dollar amount (in thousands of dollars) being demanded or indicate other demand such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS 44 is used to reference related pending cases if any. If there are related pending cases, insert the docket numbers
and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.
Case 3:12-cv-00511-RDM Document 1-1 Filed 03/20/12 Page 2 of 2

(;+,%,7$
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 1 of 86
EXHIBIT A
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 2 of 86
General Policy
Information
Endorsement
Information
Page I of I
Fonn CC3R19 (7197)
General Endorsement
Named Insured: Hydro International Holdings, Inc.
Policy Symbol: GLW Policy Number: (;24151785 001
Endorsement Number: 003 Effective date of Endorsement: 12/27/2010
Policy Period: 08/0112010 to 08/0112011
Issued by: Illinois Union Insurance Company
(Name of InsUTance Company)
This Endorsement changes the policy - Please read it carefully
This endorsement modifies insurance provided under the following:
_______________ COVERAGE FORM
In consideration of an additianal premium of $2,500 it is agreed the following
endorsement is added per the attached:
Amendment of Coverage Territory - Worldwide Coverage
ENV-314S (10/07)
All other terms and conditions remain the same.
Authorized Representative
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 3 of 86
Named Insured Endorsement Number
Hydro International Holdings, Inc. 003
Policy Symbol
I Policy Number
I 0
Effective Date of Endorsement
GLW G24151785 001
TO
08/0112011 12/27/2010
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
Insert the number. The remainder of the Information is to be completed only when this endorsement Is Issued subsequent to .the preparation of tile policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
AMENDMENT OF COVERAGE TERRITORY - WORLDWIDE COVERAGE
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
CONTRACTOR'S POLLUTION LIABILITY COVERAGE PART
PROFESSIONAL LIABILITY COVERAGE PART
A. The following is added to General Conditions:
Expanded Coverage Territory
1. If a suit is brought in a part of the coverage territory that is outside the United States of America
(including its territories and possessions), Puerto Rico or Canada, and we are prevented by law, or
otherwise, from defending the insured, the insured will iniliate a defense of the suit. We will
reimburse the insured, under Supplementary Payments, for any reasonable and necessary expenses
incurred for the defense of a suit seeking damages to which this insurance applies, that we would
have paid had we been able to exercise our right and duty to defend.
If the insured becomes legally obligated to pay sums because of damages to which this insurance
applies in a part of the coverage territory that is outside the United States of America (including its
territories and possessions), Puerto Rico or Canada, and we are prevented by law, or otherwise, from
paying such sums on the insured's we will reimburse the insured for such sums.
2. All payments or reimbursements we make for damages because of judgments or settlements will be
made in U,S. currency at the prevailing exchange rate at the time the insured became legally
obligated to pay such sums. All payments or reimbursements we make for expenses under
Supplementary Payments will be made in U.S. currency at the prevailing exchange rate at the time
the expenses were incurred.
3. Any disputes between you and us as to whether there is coverage under this policy must be filed in
the courts of the United States of America (including Its territories and possessions), Puerto Rico or
Canada.
4. The insured must fully maintain any coverage required by law, regulation or other governmental
authority during the policy period, except for reduction of the aggregate limits due to payments of
claims, judgments or settlements.
Failure to maintain such coverage required by law, regulation or other governmental authority will not
invalidate this insurance. However, this insurance will apply as if the required coverage by law,
regulation or other governmental authority was in full effect.
B. The following is added to under the General Conditions, Other Insurance:
Excess Insurance
This insurance is excess over:
ENV-3145 (1!Ul7) Indudes copyrighted materi al of Insurance SelVices Offi ce, Inc. w1th its permission. Page 1 012
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 4 of 86
Any of the other insurance, whether primary, excess, contingent or on any other basis:
1. If the insured's liability to pay damages is determined in a suit brought outside the United
States of America (including its territories and possessions), Puerto Rico or Canada; or
2. That is coverage required by law, regulation or other governmental authority in a part of
the coverage territory that is outside the United States of America (including its
tenitories and possessions), Puerto Rico or Canada.
C. The definition entitled coverage territory is deleted its entirety and replaced with the following:
Coverage territory means anywhere in the world with the exception of any country or jurisdiction
which is subject to trade or other economic sanction or embargo by the United States of America.
ENV-3145 (1M?) Includes copyrighted material of Insurance Services Office, Inc. with its permission. Page 2 of2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 5 of 86
General Policy
Infonnation
Endorsement
Infonnation
Page 1 of I
FOlIn CC3R1 9 (7/91)
General Endorsement
Named Insured: Hydro International Holdings, Inc.
Policy Symbol: GLW Policy Number: G241S1785 001
Endorsement Number: 002 Effective date of Endorsement: 08/0112010
Policy Period: 08/0112010 to 08/0112011
Issued by: Illinois Union In.urance Compaoy
(Name of Insurance Company)
Tbis Endorsement changes tbe policy - PI se read it carefully
This endorsement modifies insurance provided under the following:
________ COVERAGE FORM
In consid.ratio. ortb. premium charged, it is agreed tbat Item No.1, Named
Insured's Address, of the Declarations is hereby amended to read as follows:
2925 NW Aloclek Drive, Suite 140
Hillsboro, OR 97124
All other terms & conditions remain the same.
Authorized Representative
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 6 of 86
General Policy
Information
Endorsement
Information
rllgt: I ofl
FOml CC-3RI 9 (7/97)
General Endorsement
Named Insured: Hydro International Holdings, Ine_
Policy Symbol: GLW Policy Number: G24151785 001
Endorsement Number: 1 Effective date of Endorsement: 08/0112010
Policy Period: 08/0112010 to 08/0112011
Issued by: Illinois Union Insurance Company
(Name of 111sura net: Compuny)
This Endorsement ebanges the policy - Please read it care Cully
This endorsement modifies insurance provided under the following:
_______ COVERAGEFORM
In consideration of no change in premium it is agreed tbe following endorsement
is added per the attached:
Additional Insured Endorsement-
Products-Completed Operations Hazard
ENV-3225 (10/08)
All other terms and conditions remain the same.
Authorized Representative
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 7 of 86
ADDITIONAL INSURED ENDORSEMENT - PRODUCTS-COMPLETED OPERATIONS HAZARD
Named Insured Endorsement Number
Hydro International Holdings, Inc. 1
Policy Symbol I Policy Number 1 Policy Period
Effective Date of Endorsement
GLW G24151785 001 08/01/2010 to 08/01/2011
08/01/2010
Issued By (Name of Insurance Company)
Illinois Union Surplus Lines Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
CONTRACTOR'S POLLUTION LIABILITY COVERAGE PART
SCHEDULE
Any person or organization that is an owner of real property or personal property on which you are performing
operations, or a contractor on whose behalf you are performing operations, and only at the specific written
request of such person or organization to you, wherein such request is made prior to commencement of
operations.
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
Section II - Who Is An Insured is amended to include as an additional insured the person(s) or organizaijon(s)
shown in the Schedule, but only with respect to liability for bodily injury or property damage caused, in whole or
in part, by your work performed for that additional insured and included in the products-completed operations
hazard.
All other terms and conditions remain the same.
ENV-3225 (10-08) Copyright 2008 ill Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 8 of 86
n Illinois Union
W INSURANCE COMPANY
Environmental General Liability
Policy Declarations
THE DECLARATIONS, TOGETHER Willi THE COMPLETED AND SIGNED APPLICATION, THIS POLICY AND ANY
ENDORSEMENTS OR SCHEDULES ATTACHED HERETO, CONSTITUTE THE INSURANCE POLICY.
Policy Number:
Item 1. Named Insured:
G24151785 001
Hydro International Holdi ngs, Inc.
2925 NW Aloclek Drive
Hillsboro, OR 97124
Renewal of: New
The Named Insured Is a: 0 Individual 0 Partnership 0 Limited Uab11ity Company ~ Corporati on OOther: __ _
Item Z. Producer:
Itom 3. Policy Period:
R T Specialty LLC
200 south Wacker Drive
Chicago, IL 60606
Inceplion Date: August 01, 2010 Explralion Date: August 01,2011
(12:01 AM. Standard time at ttl" address shown in Item 1.)
If "NOT INCLUDED" appears, Ihen no such Coverage is provided under this policy.
Item 4. Limits of Insurance:
Commercial General Liability Coverage
Each Occurrence Limit
General Aggregate Limit (Other than Products/Completed Operations)
Products/Completed Operations Aggregate Limit
Personal & Advertising Injury limit
Damage to Premises Rented to You
Medical Payments
Contractors Pollution Uability Coverage Part
ProfeSSional liability Coverage Part
Item 5. Deductible:
Iteri\6:--
.'\
.,.
Item 7.
ItemS.
Commercial General Liability Coverage
Contractors Polluti on Liability Coverage Part
ProfeSSional UabPlty Coverage Part
Advance Premium: $ 47,571
Rate: $ Flat I Not Audilable
(25% minimum earned)
Estimated Basis: $ 19,500,000 (Estimated Revenue)
ENV1521 (03-06)
$2,000,000
$2,000,000
$2,000,000
$2,000,000 Any One Person or Organization
$60,000 Any One Premises
$5,000 Any One Person
$2,000,000 EaCh Polution Condition
$2,000,000 Each Claim
$1.0,000 Each Occurrence
$10,000 Each Pollution Condition
$10,000 Each Claim
Page 1 012
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 9 of 86
n Illinois Union
W INSURANCE COMPANY
Environmental General Liability
Policy Declarations
Item 9. Retroactive Dato:
Commercial General Liability Coverage:
Contractors Pollution Liability Coverage Part:
Professional Liability Coverage Part:
See ENV-3179 (03/05)
See ENV-3179 (03/05)
See ENV-3179 (03/05)
10. Covered Locations: Not Applicable
Item 11.

Itom 12.
Forms and Endorsements:
CG 00 02 (10101 ) COllYl1ercial General Liabilily Coverage
ENV-l 104 (06/06) Contractors Pollution Liability Endorsement - cl aims Made Fonn
ENV_l l 05 (06/06) Professional Liability Endorsement
ENV-31oo (08104) Addmcnallnsured Endcrsemenl
ENV-3101 (08/04) Additional Insured Endorsement - Primary end Non-Contributory
ENV-3103 (08/04) All Known or Reported Incidents Exdusion
ENV-3107 (09104) Common Policy Cond,tions
ENV-3110 (09104) Deductible Liability Insurance Endorsement
ENV-3123 (08104) . Named Insured Endorsement
ENV-3143 (03105) Waiver of Transfer of Rghts of Recovery Against Others to Us
ENV-3179 (03105) Named Insured(s) Retroactive Date Endorsement
ENV-3201 (05108) Fungi, Mold, or Microbial Matter Exctll5ion
ENV-3230 (08109) Reliance Upon Other Carriers Application
ENV 5100 (08104) Asbestos Amendatory Endorsement
ENV-5102 (10104) Nudear Hazard Liability Excl usion
ENV-5106 (04ID6) Servioe of SUit
ENV-5519 (09/04) Eamed Premium Endorsement-25% Minimum Earned
ENV-Sl00 (08104) Construdon Management Professional Exclusion - General Liability Coverage
ENV-6101 (08104) Engineers, Architects and Surveyors Professional Exclusion - General Liability Coverage
ENV-$102 (08104) Inspedon, Appraisal and Survey Exdusion - General Liabilty Coverage
ENV-<lI03 (08/04) Testing or Consulting Professional Liability Exctusion - General Liability Coverage
ENV-<lI04 (08104) Total Pollution Exctusion - Generat Uabifity Coverage
ENV-<l105 (08104) Employment Related Practoes Exctusion
ENV-<l 106 (01105) Defined Words and Phrases Endorsement
TRIA 15c (01.108) Policyholder Disclosure Notice of Terrorism Insurance Coverage
ENV-9950 (01108) Exclusion of Certified Acts of Terrorism
(11/06) Trade or Economic Sanctions Endorsement
MA-<108255e (08109) Claims Directory EnvlronmentallUmbrelialExoess Casualty
LD5S23g (02105) Signature Endorsement
Date:
August 13, 2010
Authorized RepreS9nf<Jtive
ENV-1521 (03-00)
-!
' .;
Page 2 of2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 10 of 86
OREGON
NOTICE TO INSURED:
This insurance was procured and developed under the Oregon surplus
lines laws. It is NOT covered by provisions ofORS 734.510 to 734.710
relating to the Oregon Insurance Guaranty Association. If the insurer
issuing this insurance becomes insolvent, the Oregon Insurance
Guaranty Association has no obligation to pay claims under this
insurance.
SL OR 2008
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 11 of 86
ACE Producer Compensation
Practices & Policies
ACE believes that policyholders should have access to information about ACE's practices and policies related to
the payment of compensation to brokers and independent agents. You can obtain that information by accessing
our website at http://www.aceproducercompensation.com or by calling the following toll-free telephone number:
1-866-512-2862.
ALL-20887 (10/06)
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 12 of 86
IL POOl 01 04
U.S. TREASURY DEPARTMENT'S OFFICE OF FOREIGN
ASSETS CONTROL ("OFAC")
ADVISORY NOTICE TO POLICYHOLDERS
No coverage is provided by this Policyholder Notice nor can it be construed to replace any provisions of your
policy. You should read your policy and review your Declarations page for complete information on the coverages
you are provided.
This Notice provides information concerning possible impact on your insurance coverage due to directives issued
by OFAC. Please read this Notice carefully.
The Office of Foreign Assets Control (OFAC) administers and enforces sanctions policy, based on Presidential
declarations of "national emergency". OFAC has identified and listed numerous:
Foreign agents;
Front organizations;
Terrorists;
Terrorist organizations; and
Narcotics traffickers;
as "Specially DeSignated Nationals and Blocked Persons". This list can be located on the United States Treas
ury's web site - http/lWww.l reas.gov/ofac.
In accordance with OFAC regulations, if it is determined that you or any other insured, or any person or entity
claiming the benefits of this insurance has violated U.S. sanctions law or Is a Specially Designated National and
Blocked Person, as identified by OFAC, this insurance will be considered a blocked or frozen contract and all
provisions of this insurance are immediately subject to OFAC. When. an insurance policy is considered to be such
a blocked or frozen contract, no payments nor premium refunds may be made without authorization from OFAC.
Other limitations on the premiums and payments also apply.
IL P 0010104 ISO Properties, Inc., 2004 Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 13 of 86
COMMERCIAL GENERAL LIABILITY
CG 00 0210 01
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
COVERAGES A AND B PROVIDE
CLAIMS-MADE COVERAGE
PLEASE READ THE ENTIRE FORM CAREFULLY
Various provisions in this policy restrict coverage.
Read the entire policy carefully to determine rights,
duties and what is and is not covered.
Throughout this policy the words "you" and "your"
refer to the Named Insured shCl'Ml in the Declara-
tions, and any other person or organization qualifying
as a Named Insured under this policy. The words
"we" I "us" and "our" refer to the Company providing
this insurance.
The word flinsured" means any person or organization
qualifying as such under Section II - Who Is An In-
sured.
Other words and phrases that appear in quotation
marks have special meaning. Refer to Section VI -
Definitions.
SECTION 1- COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY
DAMAGE LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured be-
comes legally obligated to pay as damages
because of "bodily inj ury" or "property dam-
age" to which this insurance applies. We will
have the right and duty to defend the insured
against any "suit" seeki ng those damages.
However, we will have no duty to defend the
insured against any "suit" seeking damages for
"bodily injury" or "property damage" to which
this insurance does not apply. We may, at our
discretion, investigate any "occurrencetl and
settle any claim or "suit" that may result. But:
(1) The amount we will pay for damages is
limited as described in Section lit - Limits
Of Insurance; and
(2) Our right and duty to defend ends when we
have used up the applicable limit of insur-
ance in the payment of judgments or set-
tlements under Coverages A Or B or medi-
cal expenses under Coverage C.
No other obligation or liability to pay sums or
periorm acts or services is covered unless ex-
plicitly provided for under Supplementary
Payments - Coverages A and B.
b. This insurance applies to "bodily injury" and
"property damage" only if:
(1) The "bodily injury" or "property damage" is
caused by an "occurrence" that takes p l ~ c e
in the "coverage territory";
(2) The "bodi ly injury" or "property damage" did
not occur before the Retroactive Date, if
any, shown in the Declarations or after the
end of the policy period; and
(3) A claim for damages because of the "bodily
injury" or "property damage" is first made
against any insured, in accordance with
Paragraph c. below, during the policy pe-
riod or any Extended Report ing Period we
provide under Section V - Extended Re-
porting Periods.
c. A claim by a person or organizati on seeking
damages will be deemed to have been made
at the earlier of the following times:
(1) When notice of such claim is received and
recorded by any insured or by us, which-
ever comes fi rst; or
(2) When Vie make settlement in accordance
with Paragraph 1.a. above.
All clai ms for damages because of "bodily In-
jury" to the same person, including damages
claimed by any person or organization for care,
loss of services, or death resulting at any time
from the "bodily injury", will be deemed to
have been made at the time the first of those
Claims is made against any insured.
All claims for damages because of "property
damage" causing loss to the same person or
organization will be deemed to have been
made at the time the first of those claims is
made against any insured.
2. Exclusions
This insurance does not apply to:
a. Expected Or Intended Injury
"Bodily injury" or property damage" expected
or intended from the sl andpoint of the insured.
This exclusion does not apply to "bodi ly injury"
resulting from the use of reasonable force to
protect persons or property.
CG 00 021001 ISO Properties, Inc.. 2000 Page 1 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 14 of 86
b, Contractual Liability
"Bodily injury" or "property damage" for which
Ihe insured is obligated to pay qamages by
reason of the assumption of liability in a con-
tract or agreement. This exclusion does not
apply to liability for damages:
(1) That the insured would have In the absence
of the contract or agreement; or
(2) Assumed in a contract or agreement Ihat is
an "insured contract", provided the "bodily
injury" or "property damage" occurs subse-
quent to the execution of the contract or
agreement. Solely for the purposes of li-
ability assumed in an "insured contract" I
reasonable attorney fees and necessary
liligalion expenses incurred by or for a
party other than an insured are deemed to
be damages because of "bodily injury" or
"property damage", provided:
(a) Liability .to such party for, or for the cost
of, that party's defense has also been
assumed in. the same "insured contrace;
and
(b) Such attorney fees and litigation ex-
penses are for defense of that party
against a civil or alternative dispute
resolution proceeding in which damages
to which this insurance applies are al-
leged.
c, Liquor Liability
.. Bodily injury" or "property damage" for which
any insured may be held liable by reason of:
(1) Causing or contributing to the intoxication
of any person;
(2) The furnishing of alcoholic beverages to a
person under the legal drinking age or un-
der the Influence of alcohol; or
(3) Any statute, ordinance or regulation relating
to the sale, gift, distribution or use of alco-
holic beverages.
This .excluslon applies only if you are in the
business of manufacturing, distributing, selling,
serving or furnishing alcoholic beverages.
d, Workers' Compensation And Similar Laws
Any obligation of the insured under a workers'
compensation, disability benefits or unem-
ployment compensation law or any similar law.
e, Employer'. LI.bility
"Bodily injury" to:
(1) An "employee" of the insured arising out of
and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct
of the insured's business; or
(2) The spouse, child, parent, brother or sister
of that "employee" as a consequence of
Paragraph (1) above.
This exclusion applies:
(1) Whether the insured may be liable as an
employer or in any other capacity; and
(2) To any obligation to share damages with or
repay someone else who must pay dam
ages because of the injury,
This excl usion does not apply to liability as-
sumed by the insured under an "insured con
tract".
f, Pollution
(1) "Bodily injury" or "property damage" arising
out of the actual, al leg.ed or threatened dis-
charge, dispersal, seepage, migration, reo
lease or escape of "pollutants":
(a) At or from any premises, site or loealion
which is or was at any time owned or
occupied by, or rented or loaned to, any
insured. However, this subparagraph
does not apply to:
(i) "Bodily injury" if sustained \lithin a
building and caused by smoke,
fumes, vapor or soot from equip
ment used to heat that building;
(Ii) "Bodily injury" or "property damage"
for which you may be held liable, if
you are a contractor and the owner
or lessee of such premises, site or
location has been added to your
policy as an additional insured wi th
respect to your ongoing operations
performed for that additional insured
at that premises, site or location and
such premises, site or locatiOn .is not
or never was owned or occupied by,
or rented or loaned to, any insured,
other than that additional insured; or
(iii) "Bodily injury" or "property damage"
arising out of heat, smoke or fumes
from a "hostile fire";
(b) At or from any premises, site or location
which is or was at any time used by or
for any insured or others for the han-
dl ing, storage, disposal, processing or
treatment of waste;
(e) Which are or were at any time trans-
ported, handled, stored, treated, di s-
posed of, or processed as waste by or
for:
(i) Any insured; or
Page 2 of 16 ISO Properties, Inc., 2000 CG 00 0210 01 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 15 of 86
(ii) Any person or organization for whom
you may be legally responsible; or
(d) At or from any premises, site or location
on which any insured or any contractors
or subcontractors working directly or in-
directly on any insured's behalf are
performing operations if the "pollutants"
are brought on or to the premises, site
or location in connection with such op-
erations by such insured, contractor or
subcontractor. However, this subpara-
graph does not apply to:
(I) "Bodily injury" or "property damage"
arising out of the escape of fuels, lu-
bricants or other operating fluids
which are needed to perform the
normal electrical, hydraulic or me-
chanical functions necessary for the
operation of "mobile eqUipment" or
its parts, if such fuels, lubricants or
other operating fluids escape from a
vehicle part designed to hold, store
or receive them. This exception
does not apply if the "bodily injury"
or "property damage" arises out of
the intentional discharge, dispersal
or release of the fuels, lubricants or
other operating fluids, Or if such fu-
els, lubricants or other operating
fluids are brought on or to the prem-
ises, site or location with the intent
that they be discharged, dispersed or
released as part of the operations
being performed by such insured,
contractor or subcontractor;
(ii) "Bodily injury" or "property damage"
sustained within a building and
caused by the release of gases,
fumes or vapors from materials
brought into that building in connec-
tion with operations being performed
by you or on your behalf by a con-
tractor or subcontractor; or
(iii) "Bodily injury" or "property damage"
arising out of heat, smoke or fumes
from a "hostile fire".
(e) At or from any premiSes, Site or location
on which any insured or any contractors
or subcontractors working directly or in-
directly on any insured's behalf are
performing operations if the operations
are to test for, monitor, clean up, re-
move, contain, treat, detoxify or neu-
tralize, or in any way respond to, or as-
sess the effects of, "pollutants".
(2) Any loss, cost or expense ariSing out of
any:
(a) Request, demand, order or statutory or
regulatory requirement that any insured
or others test for, monitor, clean up, re-
move, contain, treat, detoxify or neu
tralize, or in any way respond to, or as-
sess the effects of, "pollutants"; or
(b) Claim or suit by or on behalf of a gov-
ernmental authority for damages be-
cause of testing for, monitoring, clean-
ing up, removing, containing, treating,
detOXifying or neutralizing, or in any way
responding to, or assessing the effects
of, "pollutants".
However, this paragraph does not apply to
liability for damages because of "property
damage" that the insured would have in the
absence of such request, demand, order or
statutory or regulatory requirement, or such
claim or "suit" by or on behalf of a govern-
mental authority.
g, Aircraft, Auto Or Watercraft
"Bodily injury" or "property damage" arising out
of the ownership, maintenance, use or en-
trustment to others of any aircraft, "auto" or
watercraft owned or operated by or rented or
loaned to any insured, Use includes operation
and "loading or unloading".
This exclusion applies even if the claims
against any insured allege negligence or other
wrongdoing in the supervision, hiring, em-
ployment, training or monitoring of others by
that insured, if the "occurrence" which caused
the "bodily injury" or "property damage" in-
volved the ownerShip, maintenance, use or
entrustment to others of any aircraft, "auto" or
watercraft that is owned or operated by or
rented or loaned to any insured.
This exel usion does not apply to:
(1) A watercraft while ashore on premises you
own or rent;
(2) A watercraft you do not own that is:
la) Less than 26 feet long; and
(b) Not being used to carry persons or
property for a charge;
(3) Parking an "auto" on, or on the ways next
to, premises you own or rent, provided the
"auto" is not owned by or rented or loaned
to you or the insured;
(4) Liability assumed under any "insured con-
tract" for the ownership, maintenance or
use of aircraft or watercraft; or
CG 00 02 10 01 ISO Properties, Inc., 2000 Page 3 of 16 o
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(5) "Bodily injury" or "property damage" arising
out of the operation of any of the equip-
ment listed in Paragraph 1.(2) or f.(3) of the
definition of "mobile equipment".
h. Mobile Equipment
"Bodily injury" or "property damage" arising out
of:
(1) The transportation of "mobile equipment"
by an "auto" owned or operated by or
rented or loaned to any insured; or
(2) The use of "mobile equipment" in. or while
in practice for, or while being prepared for,
any prearranged racing. speed. demolition.
or stunting activity.
i. War
"Bodily injury" or "property damage" due to
war, whether or not declared, or any act or
condition incident to war. War includes civil
war, insurrection, rebellion or revolution. This
exclusion applies only to liability assumed un-
der a contract or agreement.
j. Damage To Property
"Property damage" to:
(1) Property you own, rent. or occupy. includ-
ing any costs or expenses incurred by you,
or any other person, organization or entity,
for repair. replacement. enhancement.
restoration or maintenance of such property
for any reason, including prevention of in-
jury to a person or damage to another's
property;
(2) Premises you sell, give away or abandon, If
the "property damage" arises out of any
part of those premises;
(3) Property loaned to you;
(4) Personal property in the care, custody or
control of the insured;
(5) That particular part of real property on
which you or any contractors or subcon-
tractors working directly or indirectly on
your behalf are performing operations, if
the "property damage" arises out of those
operations; or
(6) That particular part of any property that
must be restored, repaired or replaced be-
cause "your work" was incorrectly per-
formed on it.
. Paragraphs (1), (3) and (4) of this exclusion do
not apply to "property damage" (other than
damage by fire) to premises, including the
contents of such premises, rented to you for a
period of 7 or fewer consecutive days. A sepa-
rate limit of insurance applies to Damage To
Premises Rented To You as described in Sec-
tion III - Limits Of Insurance.
Paragraph (2) of this exclusion does not apply
if the premises are "your work" and were never
occupied, rented or held for rental by yoU.
Paragraphs (3), (4), (5) and (6) of this exclu-
sion do not apply to liability assumed under a
sidetrack agreement.
Paragraph (6) of this exclusion does not apply
to "property damage" included in the "prod-
ucts-com pleted operations hazard",
k. Damage To Your Product
"Property damage" to "your product" ariSing
out of it or any part of it.
I. Damage To Your Work
"Property damage" to "your work" arising out of
it or any part of it and included in the "prod-
ucts-completed operations hazard".
This exclusion does not apply if the damaged
work or the work out of which the damage
arises was performed on your behalf by a sub-
contractor.
m. Damage To Impaired Property Or Property
Not Physically Injured
"Property damage" to "impaired property" or
property that has not been physically injured,
arising out of:
(1) A defect, deficiency, inadequacy or dan-
gerous condition in "your product" or "your
work"; or
(2) A delay or failure by you or anyone acting
on your behalf to perform a contract or
agreement in accordance with its terms.
This exclusion does not apply to the loss of
use of other property arising out of sudden and
accidental physical injury to "your product" or
"your work" after it has been put to its intended
use.
n. Recall 01 Products, Work Or Impaired
Property
Damages claimed for any loss, cost or ex-
pense incurred by you or others for the loss of
use, withdrawal, recall, inspection, repair, re-
placement, adjustment, removal or disposal of:
(1) "Your product";
(2) "Your work"; or
(3) "Impaired property";
if such product, work, or property is withdrawn
or recalled from the market or from use by any
person or organization because of a known or
suspected defect, deficiency, inadequacy or
dangerous condition in it.
Page 4 of 16 ISO Properties, Inc., 2000 CG 00021001 o
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o. Personal And Advertising Injury
"Sodily injury" arising out of "personal and ad-
vertising injury".
Exclusions .c. through n. do not apply to damage
by fire to premises while rented to you or tempo-
rarily occupied by you IMth permission of the
owner. A separate limit of insurance applies to this
coverage as described in Section III - Limits Of
Insurance,
COVERAGE B PERSONAL AND ADVERTISING
INJURY LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured be-
comes legally obligated to pay as damages
because of "personal and advertising injury" to
which this insurance applies. We will have the
right and duty to defend the insured against
any "suit" seeking those damages. However,
we will have no duty to defend the insured
against any "suit" seeking damages for "per-
sonal and advertising injury" to which this in-
surance does not apply. We may, at our dis-
cretion, investigate any offense and settle any
claim or "suitll that may result. But:
(1) The amount we will pay for damages is
limited as described in Section III - Limits
Of Insurance; and
(2) Our right and duty to defend end when we
have used up the applicable limit of insur-
ance in the' payment of judgments or set-
tlements under Coverages A or B or medi-
cal expenses under Coverage C.
No other obligation or liability to pay sums or
perform acts or services is covered unless ex-
plicitly provided for under Supplementary
Payments - Coverages A and B.
b. This insurance applies to "personal and adver-
tising injury" caused by an offense arising out
of your business, but only if:
(1) The offense was committed in the "cover-
age territory";
(2) The offense was not committed before the
Retroactive Date, if any, shown in the
Declarations or after the end of the policy
period; and
(3) A claim for damages because of the "per-
sonal and advertising injury" is first made
against any insured, in accordance IMth
Paragraph c. below, during the policy pe-
riod or any Extended Reporting Period we
provide under Section V - Extended Re-
porting Periods.
c. A claim made by a person or organization
seeking damages will be deemed to have been
made at the earlier of the foliolMng times:
(1) When notice of such claim is received and
recorded by any insured or by us, which-
ever comes first; or
(2) When we make settlement in accordance
with Paragraph 1.8. above.
All claims for damages because of "personal
and advertising injury" to the same person or
organization as a result of an offense IMII be
deemed to have been made at the time the
first of those claims is made against any in-
sured.
2. Exclusions
This insurance does not apply to:
a. Knowing Violation Of Rights Of Another
"Personal and advertising injury" caused by or
at the direction of the insured with the knowl-
edge that the act would violate the rights of
another and would inflict "personal and adver-
tising injuryll.
b. Material Published With Knowledge Of
Falsity
tlpersonal and advertising injury" arising out of
oral or written publication of material, if done
by or at the direction of the insured with knowl-
edge of its falsity.
c. Material Published Prior To Policy Period
"Personal and advertising injury" arising out of
oral or written publication of material whose
first publication took place before the Retroac-
tive Date, if any, shown in the Declarations.
d. Criminal Acts
"Personal and advertising injury" arising out of
a criminal act committed by or at the direction
of the insured.
e. Contractual Liability
"Personal and advertising injury" for which the
insured has assumed liability in a contract or
agreement. This exclusion does not apply to li-
ability for damages that the insured would
have in the absence of the contract or agree-
ment.
CG00021001 ISO Properties, Inc., 2000 Page 5 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 18 of 86
f. Breach Of Contract
"Personal and advertising injury" arising out of
a breach of contract. except an implied con-
tract to use advertising idea in your
tladveriisement",
g. Quality Or Perfomnance Of Goods - Failure
To Confomn To Statements
"Personal and advertising injury" arising out of
the failure of goods. products or services to
conform with any statement of quality or per-
formance made in your Uadvertisement",
h. Wrong Description Of Prices
"Personal and advertising injury" ariSing out of
the wrong description of the price of goods.
products or services stated in your "advertise-
ment".
i. Infringement Of Copyright, Patent,
Trademark Or Trade Secret
"Personal .and advertising injury" arising out of
the infringement of copyright, patent, trade-
mark. trade secret or other intellectual property
rights.
However. this exclusion does not apply to in-
fringement, in your 'advertisement", of copy-
right, trade dress or slogan.
j. Insureds In Media And Internet Type
Businesses
"Personal and advertising injury" committed by
an insured whose business is:
(I) Advertising, broadcasting, publishing or
telecasting;
(2) Designing or determining content or web-
sites for others; or
(3) An Internet search, access, content or
seNies provider.
However, this exclusion does not apply to
Paragraphs 14.a., b. and c. of "personal and
advertising injury" under the Definitions Sec-
tion.
For the purposes of this exclusion. the placing
of frames, borders or links, or advertising, for
you or others anywhere on the Internet, is not
by Itself. considered the business of advertis-
ing, broadcasting, publishing or telecasting.
k. Electronic Chatrooms Or Bulletin Boards
''Personal and advertising injury' arising out of
an electronic chatroom or bulletin board the in-
sured hosts, owns, or over which the insured
exercises control.
I. Unauthorized Use Of Another's Name Or
Product
"Personal and advertiSing injury' arising out of
the unauthorized use of another's name or
product in your e-mail address. domain name
or meiatag. or any other similar tactics to mis-
lead another's potential customers.
m. Pollutlo"
"Personal and advertising injury" arising out Of
the actual. alleged or threatened discharge,
dispersal, seepage, migration, release or es-
cape of "pollutants" at any time.
n. Pollution-Related
Any loss. cost or expense arising out of any:
(1) Request . demand or order that any insured
or others test for, monitor, clean up, re-
move. contain, treat. detoxify or neutralize.
or in any way respond to, or assess the ef-
fects of. "pollutants"; or
(2) Claim or suit by or on behalf of a govem-
mental authority for damages because of
testing for, monitOring. cleaning up, re-
moving. containing, treating. detOXifying or
neutralizing. or in any way responding to, or
assessing the effects of, "pollutants".
COVERAGE C MEDICAL PAYMENTS
1. Insuring Agreement
B. We will pay medical expenses as described
below for "bodily injury" caused by an accident:
(1) On premises you own or rent;
(2) On ways next to premises you own or rent;
or
(3) Because of your operations;
provided that:
(1) The accident takes place in the "coverage
territory" and during the policy period;
(2) The expenses are incurred and reported to
us ..,;thin one year of the date of the acci-
dent; and
(3) The injured person submits to examination.
at our expense, by physicians of our choice
as often as we reasonably require.
b. We will make these payments regardless of
fault. These payments will not exceed the ap-
plicable limit of insurance. We will pay reason-
able expenses for:
(1) First aid administered at the time of an
accident;
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(2) Necessary medical, surgical, x-ray and
dental services, including prosthetic de-
vices; and
(3) Necessary ambulance, hospital, profes-
sional nursing and funeral services.
2. Exclusions
We will not pay expenses for "bodily injury":
a. Any Insured
To any insured, except "volunteer
b. Hired Person
To a person hired to do work for or on behalf of
any insured or a tenant of any insured.
c. Injury On Normally Occupied Premises
To a person injured on that part of premises
you own or rent that the person normally occu-
pies.
d. Workers Compensation And Similar Laws
To a person, whether or not an "employee" of
any insured, if benefits for the "bodily injury"
are payable or must be provided under a
workers' compensation or disability benefits
law or a similar law.
e. Athletics Activities
To a person injured while taking part in athlet-
ics.
f. Products-Completed Operations Hazard
Included within the "products-completed op-
erations hazard".
g. Coverage A Exclusions
Excluded under Coverage A.
h. War
Due to war, whether or not declared, or any act
or condition incident to war. War includes civil
war, insurrection, rebellion or revolution.
SUPPLEMENTARY PAYMENTS - COVERAGES A
AND B
1. We will pay, with respect to any claim we investi-
gate or settle or any "suit" against an insured we
defend:
a. All expenses we incur.
b. Up to $250 for cost of bail bonds required
because of accidents or traffic law violations
alising out of the use of any vehicle to which
the Bodily Injury Liability Coverage applies.
We do not have to furnish these bonds.
c. The cost of bonds to release attachmenls, but
only for bond amounts within the applicable
limit of insurance. We do not have to furnish
these bonds.
d. All reasonable expenses incurred by the in-
sured at our request to assist us in the investi-
gation or defense of the claim or "suit", in-
cluding actual loss of earnings up to $250 a
day because of time off from work.
e. All costs taxed against the insured in the "suit".
f. Prejudgment interest awarded against the
insured on that part of the judgment we pay. If
we make an offer to pay the applicable limit of
insurance, we will not pay any prejudgment
interest based on that period of time after the
offer.
g. All interest on the full amount of any judgrnent
that accrues after entry of the judgment and
before we have paid, offered to pay, or depos-
ited in court the part of the judgment that is
within the applicable limit of insurance.
These payrnents will not reduce the limits of in-
surance.
2. If we defend an insured against a "suit" and an
indemnitee of the insured is also named as a party
to the "suit", we will defend that indemnitee if all of
the following conditions are met:
a. The "suit" against the indemnitee seeks dam-
ages for which the insured has assumed the li-
of the indemnitee in a contract or
agreement that is an "insured contract";
b. This insurance applies to such liability as-
sumed by the insured;
c. The obligation to defend, or the cost of the
defense of, that indemnitee, has also been as-
sumed by the insured in the same "insured
contract
l
';
d. The allegations in the "suit" and the informa-
tion we know about the "occurrence" are such
that no conflict appears to exist between the
interests of the insured and the interests of the
indemnitee;
e. The indemnitee and the insured ask us to
conduct and control the defense of that indem-
nitee against such "suit" and agree that we can
assign the same counsel to defend the insured
and the indernnitee; and
f. The indemnitee:
(1) Agrees in writing to:
(a) Cooperate with us in the investigation,
settlement or defense of the "suit";
(b) Immediately send us copies of any
demands, notices, summonses or legal
papers received in connection with the
"suit";
CG 00 0210 01 ISO Properties, Inc., 2000 Page 7 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 20 of 86
(e) Notify any other insurer whose coverage
is available to the indemnitee; and
(d) Cooperate with us with respect to coor-
dinating other applicable insurance
avai lable to the indemnitee; and
(2) Provides us with written authorization to:
(a) Obtain records and other information
related to the "suit"; and
(b) Conduct and control the defense of the
indemnitee in such "suit",
So long as the above conditions are met, attor-
neys' fees incurred by us in the defense of that in-
demnitee, necessary l itigation expenses incurred
by us and necessary litigation expenses incurred
by the indemnitee at our request will be paid as
Supplementary Payments. Nol1Mthstanding the
provisions of Paragraph 2.b.(2) of Section I -
Coverage A - Bodily Injury And Property Damage
Uability, such payments will not be deemed to be
damages for "bodily injury" and "property damage"
and will not reduce the limits of insurance.
Our obligation to defend an Insured's Indemnitee
and to pay for attorneys' fees and necessary lili-
gation expenses as Supplementary Payments
ends when:
a. We have used up the applicable limit of insur
ance in the payment of judgments or settle-
ments; or
b. The conditions set forth above, or the terms of
the agreement described in Paragraph f.
above, are no longer met.
SECTION II - WHO IS AN INSURED
1. If you are deSignated in the Declarations as:
a. An individual, you and your spouse are in
sureds, but only with respect to the conduct of
a business of which you are the sole owner.
b. A partnership or Joint venture, you are an in-
sured. Your members, your partners, and their
spouses are also insureds, but only IMth re-
spect to the conduct of your business.
c. A limited liability company, you are an insured.
Your members are also insureds. but only with
respect to the conduct of your business. Your
managers are insureds, but only IMth respect
to their duties as your managers.
d. An organization other than a partnership, joint
.. venture or limited liability cOmpany, you are an
Insured. Your "executive officers" and directors
are insureds, but only IMth respect to their du-
ti es as your officers or directors. Your stock-
holders are also insureds, but only with respect
to their liability as stockholders.
e. A trust, you are an insured. Your trustees are
also insureds, but only IMth respect to their du-
ties as trustees.
2. Each of the following is also an insured:
. Your "volunteer workers" only whil e performing
duties related to the conduct of your business,
or your "employees", other than either your
"executive officers" (if you are an organization
other than a partnership, joint venture or lim-
ited liability company) or your managers (If you
are a limited liability company) , but only for
acts within the scope of their employment by
you or while performing duties related to the
conduct of your business. However, none of
these "employees" or "volunteer workers" are
insureds for:
(1) "Bodily injury" or "personal and advertising
injury":
(a) To you, to your partners or members (if
you are a partnership or Joint venture).
to your members (if you are a limited li-
ability company), to a co-"employee"
while in the course of his or her em-
ployment or performing duties related to
the conduct of your buSiness, or to your
other "volunteer workers" while per-
forming duties related to the conduct of
your business;
(b) To the spouse, child, parent, brother or
sister of that co-"employee" or "volun-
teer worker" as a consequence of Para-
graph (1 )(a) above;
(c) For which there is any obligation to
share damages with or repay someone
else who must pay damages because of
the injury described in Paragraphs (1 )(a)
or (b) above; or
(d) Arising oul of his or her providing or
failing to provide professional health
care services.
(2) "Property damage" to property:
(a} Owned, occupied or used by,
(b} Rented to, in the care, custody or con-
trol of, or over which physical control is
being exerCised for any purpose by .
you, any of your "employees", "volunteer
workers", any partner or member (if you are
a partnership or joint venture), or any
member (if you are a limited liability com
pany).
b. Any person (other than your "employee" or
"volunteer worken or any While
acting as your real estate manager.
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c. Any person or organization having proper
temporary custody of your property if you die,
but only:
(1) With respect to liability arising out of the
maintenance or use of that property; and
(2) Until your legal representative has been
appointed.
d. Your legal representative if you die, but only
with respect to duties as such. That represen-
tative will have all your rights and duties under
this Coverage Part.
3. With respect to "mobile equipment" registered in
your name under any motor vehicle registration
law. any person is an insured while drivi ng such
equipmenl along a public highway wi th your per-
mission. Any other person or organization respon-
sible for the conduct of such person is also an in-
sured, but only wilh respect to liability arising out
of the operation of the equipment, and only if no
olher insurance of any kind is available to that
person or organization for this liability. However,
no person or organization is an insured with re-
spect to:
a. "Bodily injury" to a co-"employee" of the per-
son driving the equipment; or
b. "Property damage" to property owned by,
rented to, in the charge of or occupied by you
or the employer of any person who is an in-
sured under this provision.
4. Any organization you newly acquire or form, other
than a partnership, joint venture or limited liabil ity
company, and over which you maintain ownership
or majority Interest, \/\/ill qualify as a Named In-
sured if there is no other similar insurance avail-
able to that organization. However:
a. Coverage under this provision is afforded only
until the 90th day after you acquire or form the
organization Or the end of the polley period,
whichever is earlier;
b. Coverage A does not apply to "bodily injury" or
"property damage" that occurred before you
acquired or formed the organization; and
c. Coverage B does not apply to "personal and
advertising injury" arising out of an offense
committed before you acquired or formed the
organization.
No person or organization is an insured with respect
to the conduct of any current or past partnership, joint
" ventureor liability company that is not shown
as a Named Insured in the Declarati ons.
SECTION 111- LIMITS OF INSURANCE
1. The Limits of Insurance shown in the Declarations
and the rules below fix the most we will pay re-
gardless of the number of:
D. Insureds;
b. Claims made or "suits" brought; or
c. Persons or organizations making claims or
bri nging "suits".
2. The General Aggregate Li mit is the most we will
pay for the sum of:
a. Medical expenses under Coverage C;
b. Damages under Coverage A, except damages
because of "bodily injury" or ' property dam-
age" included in the "products-completed op-
erations hazard
l1
; and
c. Damages under Coverage B.
3. The Products-Completed Operations Aggregate
Limit is the most we will pay under Coverage A for
damages because of "bodily injury" and "property
damage" included in the "products-completed op-
erations hazard".
4. Subject to 2. above, the Personal and Advertising
Injury Limit is the most we pay under Cover-
age B for the sum of all damages because of all
"personal and advertising injury" sustained by any
one person or organization.
6. Subject to 2. or 3. above, whichever applies, the
Each Occurrence Limit is the most we will pay for
the sum of:
a. Damages under Coverage A; and
b. Medical expenses under Coverage C
because of all "bodily injury' and "property dam-
age" arising out of anyone "occurrence".
6. Subject to 6. above, the Damage To Premises
Rented To You Limit is the most we will pay under
Coverage A for damages because of "property
damage" to anyone premises, while rented to
you, or in the case of damage by fire, while rented
to you or temporarily occupied by you with per-
mission of the owner.
7. Subject to $. above, the Medical Expense Limit is
the most we will pay under Coverage C for all
medical expenses because of "bodily injury" sus-
tained by anyone person.
The Limits of Insurance of this Coverage Part apply
separately to each consecutive annual period and to
any remaining period of less than 12 months, starting
with the beginning of the policy period shown in the
Declarations, unless the policy period is extended
after issuance for an additional period of less than 12
months. In that case, the additional period will be
deemed part of the last preceding period for purposes
of determining the Limits of Insurance.
CG 00021001 ISO Properties, Inc., 2000 Page 9 of 16 o
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SECTION IV - COMMERCIAL GENERAL
LIABILITY CONDITIONS
1. Bankruptcy
Bankruptcy or Insolvency of the insured or of the
insured's estate will not relieve us of our obliga-
tions under thi s Coverage Part.
2. Duties In The Event Of Occurrence, Offense,
Claim Or Suit
8 . You must see to it that we are notified as soon
as practicable of an "occurrence" or offense
wh.lch may result in a claim. To the extent pos-
sible, notice should include:
(1) How, when and where the "occurrence" or
offense took place;
(2) The names and addresses of any injured
persons and witriesses; and
(3) The nature and location of any injury or
damage arising out of the "occurrence" or
offense.
Notice of an "occurrence" or offense is not no-
tice of a claim.
b. If a claim is received by any insured, you must:
(1) Immediately record the specifics of the
claim and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written no-
tice of the claim as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any de-
mands, notices. summonses or legal pa-
pers recei ved in connection with the claim
or a "suit";
(2) Authorize us to obtain records and other
information;
(3) Cooperate with us in the investigation or
settlement of the claim or defense against
the "suit"; and
(4) Assist us, upon our request, in t he en-
forcement of any right against any person
or organization winich may be liable to the
insured because of injury or damage to
which this insurance may also apply.
d. No insured will, except at that insured's own
cost, voluntarily make a payment, assume any
obligation, or incur any expense, other than for
first aid,without our consent
3. Legal Action Against Us
No person or organization has a right under this
Coverage Part:
a. To join us as a party or otherwise bri ng us into
a "suit" asking for damages from an insured: or
b. To sue us on this Coverage Part unless al l of
its terms have been fully compli ed with.
A person or organization may sue us to recover
on an agreed settlement or on a final Judgment
against an insured; but we will not be liable for
damages that are not payable under the terms of
this Coverage Part or that are in excess of the ap-
plicable limit of insurance. An agreed settlement
means a settlement and release of liability signed
by us, the insured and the claimant or the claim-
ant's legal representative.
4. Other Insurance
If other valid and collactible insurance is available
10 the insured for a loss we cover under Cover-
ages A orB of this Coverage Part, our obligations
are li mited as follows:
a. Primary Insurance
This insurance is primary except winen b. be
low applies. If this insurance is primary, our
obligations are not affected unless any of the
other insurance is also primary. Then, we will
share with all that other insurance by the
method described in c. below.
b. Excess Insurance
This insurance is excess over:
(1) Any of the other insurance, winether pri-
mary, excess, contingent or on any other
basis:
(8) That is effective prior to the beginning
of the policy period shown in the Decla
rations of this insurance and applies to
"bodily injury" or "property damage" on
other than a claims-made basis. if:
(i) No Retroactive Date is shown in the
Declarations of this insurance; or
(ii) The other insurance has a policy
period which continues after the Ret-
roactive Date shown in the Declara-
tions of this insurance;
(b) That is Fire, Extended Coverage. Build-
ers' Risk, Installation Risk or simi lar
coverage for "your work";
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(c) That is Fire insurance for premises
rented to you or tem porarily occupied by
you with permission of the owner;
(d) That is insurance purchased by you to
cover your liability as a tenant for
"property damage" to premises rented
to you or temporarily occupied by you
with perm issi on of the owner; or
(e) If the loss arises out of the maintenance
or use of aircraft, "autos" or watercraft
to the extent not subject to Exclusion g.
of Section I - Coverage A - Bodily In-
jury And Property Damage Liability,
(2) Any other primary insurance available to
you covering liability for damages arising
out of the premises or operations for which
you have been added as an additional in-
sured by attachment of an endorsement.
When this insurance is excess, we will have no
duty under Coverages A or B to defend the in-
sured against any "suit" if any other insurer has
a duty to defend the insured against that "suit".
If no other insurer defends, we will undertake
to do so, but we will be entitled to the insured's
rights against all those other insurers.
When this insurance is excess over other in-
surance, we will pay only our share of the
amount of the loss, if any, that exceeds the
sum of:
(1) The total amount that all such other insur-
ance would pay for the loss in the absence
of this insurance; an'd
(2) The total of all deductible and self-insured
amounts under all that other insurance.
We will share the remaining loss, if any, with
any other insurance that is not described in this
Excess Insurance provision and was not
bought specifically to apply in excess of the
Limits of Insurance shown in the Declarations
of this Coverage Part.
c. Method Of Sharing
If all of the other insurance permits contribu-
tion by equal shares, we will follow this method
also. Under this approach each insurer con-
tributes equal amounts until it has paid its ap-
plicable limit of insurance or none of the loss
remains, whichever comes first
If any of the other insurance does not permit
contribution by equal shares, we will contribute
by limits. Under this method, each insurer's
share is based on the ratio of its applicable
limit of insurance to the total applicable limits
of insurance of all insurers.
5. Premium Audit
a. We will compute all premiums for this Cover
age Part in accordance with our rules and
rates.
b. Premium shown in this Coverage Part as ad-
vance premium is a deposit premium only. At
the close of each audit period we will compute
the earned premium for that period and send
notice to the first Named Insured. The due
date for audit and retrospective premiums is
the date shown as the due date on the bill. If
the sum of the advance and audit premiums
paid for the policy period is greater than the
earned premium, we will return the excess to
the first Named Insured.
c, The first Named Insured must keep records of
the information we need for premium compu
tation, and send us copies at such times as we
may request.
6. Representations
By accepting this policy, you agree:
a. The statements in the Declarations are accu-
rate and com plete;
b, Those statements are based upon representa-
tions you made to us; and
c. We have issued this policy in reliance upon
your representations.
7. Separation Of Insureds
Except with respect to the Limits of Insurance,
and any rights or duties specifically assigned in
this Coverage Part to the first Named Insured, this
insurance applies;
a. As if each Named Insured were the only
Named Insured, and
b. Separately to each insured against whom
claim is made or "suit" is brought.
8. Transfer Of Rights Of Recovery Against
Others To Us
If the insured has rights to recover all or part of
any payment we have made under this Coverage
Part, those rights are transferred to us. The in-
sured must do nothing after loss to impair them.
At our request, the insured will bring "suit" or
transfer those rights to us and help us enforce
them.
9. When We Do Not Renew
If we decide not to renew this Coverage Part, we
will mail or deliver to the first Named Insured
shown in the Declarations written notice of the
nonrenewal not less than 30 days before the expi-
ration date.
If notice is mailed, proof of mailing will be suffi-
cient proof of notice.
CG 00 02 1001 ISO Properties, Inc., 2000 Page 11 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 24 of 86
10. Your Right To Claim And "Occurrence"
Information
We will provide the first Named Insured shown in
the Declarations the following information relating
to this and any preceding general liability claims-
made Coverage Part we have issued to you dur-
ing the previous three years:
a. A list or other record of each "occurrence". not
previously reported to any other insurer, of
which we were notified in accordance with
Paragraph 2.a. of the Section IV - Duties In
The Event Of Occurrence, Offense. Claim Or
Suit Condition. We will include the date and
brief description of the "occurrence" if that in-
formation was in the notice we received.
b. A summary by policy year. of payments made
and amounts reserved. stated separately. un-
der any applicable General Aggregate Limit
and Products-Completed Operations Aggre-
gate Limit.
Amounts reserved are based on our judgment.
They are subject to change and should not be re-
garded as ultimate settlement values.
You must not disclose this information to any
claimant or any claimant's representative without
our consent.
If we cancel or elect not to renew this Coverage
Part, we will provide such information no later
than 30 days before the date of policy termination.
In other circumstances. we will provide this infor-
mation only if we receive a written request from
the first Named Insured within 60 days after the
end of the policy period. In this case, we will pro-
vide this information within 45 days of receipt of
the request.
We compile claim and "occurrenceu information for
our own business purposes and exercise reasonable
care in doing so. In providing this information to the
first Named Insured, we make no representations or
warranties to insureds, insurers, or others to whom
this information is furnished by or on behalf of any
insured. Cancellation or non-renewal will be effective
even if we inadvertently provide inaccurate informa-
tion.
SECTION V - EXTENDED REPORTING PERIODS
1. We will provide one or more Extended Reporting
Periods, as described below, if:
a. This Coverage Part is canceled or not re-
newed; or
b. We renew or replace this Coverage Part with
insurance that:
(1) Has a Retroactive Date later than the date
shown in the Declarations of this Coverage
Part; or
(2) Does not apply to "bodily injury", "property
damage" or "personal and advertising in-
jury" on a claimsmade basis.
2. Extended Reporting Periods do not extend the
policy period or change the scope of coverage
provided. They apply only to claims for:
a. "Bodily injury" or "property damage" that oc
curs before the end of the policy period but not
before the Retroactive Date, if any, shown in
the Declarations; or
b. "Personal and advertising injury" caused by an
offense committed before the end of the policy
period but not before the Retroactive Date. if
any, shown in the Declarations.
Once in effect, Extended Reporting Periods may
not be canceled.
3. A Basic Extended Reporting Period is automati-
cally provided without additional charge. This pe-
riod starts with the end of the policy period and
lasts for:
a, Five years with respect to claims because of
"bodily injury" and "property damage" arising
out of an "occurrence" reported to us, not later
than 60 days after the end of the policy period.
in accordance with Paragraph 2.a. of the Sec-
tion IV - Duties In The Event Of Occurrence,
Offense, Claim Or Suit Condition;
b. Five years with respect to claims because of
"personal and advertising injury" arising out of
an offense reported to us, not later than 60
days after the end of the policy period, in ac-
cordance with Paragraph 2.a. of the Section IV
- Duties In The Event Of Occurrence, Offense,
Claim Or Suit Condition; and
c. Sixty days with respect to claims arising from
"occurrences!! or offenses not previously re-
ported to us.
The Basic Extended Reporting Period does not
apply to clai ms that are covered under any subse-
quent insurance you purchase. or that would be
covered but for exhaustion of the amount of in-
surance applicable to such claims.
4. The Basic Extended Reporting Period does not
reinstate or increase the limits of Insurance.
Page 12 of 16 ISO Properties, Inc.. 2000 CG 00 02 10 01 D
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 25 of 86
5. A Supplemental Extended Reporting Period of
unlimited duration is available, but only by an en-
dorsement and for an extra charge. This supple-
mental period starts when the Basic Extended
Reporting Period, set forth in Paragraph 3. above,
ends.
You must give us a written request for the en-
dorsement within 60 days after the end of the
poli cy period. The Supplemental Extended Re-
porting Period will not go into effect unless you
pay the additional premium promptly when due.
We will determine the additional premium in ac-
cordance with our rules and rates. In doing so, we
may take into account the following:
. The exposures ins .... ed;
b. Previous types and amounts of insurance;
c. Limits of Insurance available under this Cov-
erage Part for future payment of damages; and
d. Other related factors.
The additional premium will not exceed 200% of
the annual premium for this Coverage Part.
This endorsement shall set forth the terms, not in-
consistent with this Section, applicable to the
Supplemental Extended Reporting Period, in-
cluding a provision to the effect that the insurance
afforded for claims first received during such pe-
riod is excess over any other valid and collectible
insurance available under policies in force after
the Supplemental Extended Reporting Period
starts.
6. If the Supplemental Extended Reporting Period is
in effect, we will provide the supplemental aggre-
gate limits of insurance described below, but only
for claims first received and recorded during the
Supplemental Extended Reporting Period.
The supplemental aggregate limits of insurance
will be equal to the dollar amount shown in the
Declarations in effect at the end of the policy pe-
riod for such of the following limits of Insurance for
which a dollar amount has been entered:
General Aggregate Limit
Products-Completed Operations Aggregate Limit
Paragraphs 2. and 3. of Section III - Limits Of In-
surance will be amended accordingly. The Per-
sonal and Advertising Injury Limit, the Each Oc-
currence Limit and the Damage To Premises
Rented To You Limit shown in the Declarations
continue to apply, asset forth in Para-
graphs 4., 5. and 6. of that Section.
SECTION VI - DEFINITIONS
1. "Advertisement" means a notice that is broadcast
or published to the general public or specific mar
ket segments about your goods, products or servo
ices for the purpose of attracting customers or
supporters. For the purposes of this definition:
a. Notices that are published include material
placed on the Internet or on similar electronic
means of and
b. Regarding web-sites, only that part of a web
site that is about your goods, products or
services for the purposes of attracting custom
ers or supporters is considered an advertise
ment.
2. "Auto' means a land motor vehicle, trailer or
semitrailer designed for travel on public roads, in
eluding any attached machinery or equipment. But
"auto" does not include "mobile equipment".
3. "Bodily injury" means bOdily injury, sickness or
disease sustained by a person, including death re-
SUlting from any of these at any time.
4. "Coverage territory" means:
a. The United States of America (induding its
territories and possessions), Puerto Rico and
Canada;
b. International waters or airspace, but only if the
injury or damage occurs in the course of travel
or transportation between any places included
in a. above; or
c. All other parts of the world if the injury or dam
age arises out of:
(1) Goods or products made or sold by you in
the territory described in a. above;
(2) The activities of a person whose home Is in
the territory described in a. above, but is
away for a short time on your business; or
(3) "Personal and advertising injury" offenses
that take place through the Internet or
similar electronic means of communication
provided the insured's responsibility to pay dam-
ages is determined in a "suit" on the merits, in the
territory described in a. above or in a settlement
we agree to.
5. "Employee" includes a "leased worker". "Em
ployee" does not include a "temporary worker".
CG 00 0210 01 ISO Properties, Inc., 2000 Page 13 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 26 of 86
6. "Executive officer" means a person holding any of
the officer positions created by your charter, con-
stitution, by-laws or any other similar governing
document.
7. "Hostile fire" means one which becomes uncon-
trollable or breaks out from where it was intended
to be.
a. "Impaired property" means tangible property,
other than "your product" or "your work", that can-
not be used or is less useful because:
a. It incorporates "your product" or lIyour work
l1
that is known or thought to be defective, defi-
cient, inadequate or dangerous; or
b. You have failed to fulfill the terms of a contract
or agreement;
if such property can be restored to use by:
a. The repair, replacement, adjustment or re-
moval of "your producf' or "your work"; or
b. Your fulfilling the terms of the contract or
agreement.
9. "Insured contract" means:
a. A contract for a lease of premises. However,
that portion of the contract for a lease of
premises that indemnifies any person or or-
ganization for damage by fire to premises
while rented to you or temporarily occupied by
you with permission of the owner Is not an "in-
sured contract
l1
;
b. A sidetrack agreement;
c. Any easement or license agreement, except in
connection with construction or demolition op-
erations on or within 50 feet of a railroad;
d. An obligation, as required by ordinance, to
indemnify a municipality, except in connection
with work for a municipality;
e. An elevator maintenance agreement;
f. That part of any other contract or agreement
pertaining to your business (including an in-
demnification of a municipality in connection
with work performed for a municipality) under
which you assume the tort liability of another
party to pay for "bodily injury" or "property
damage" to a third person or organization. Tort
liability means a liability that would be imposed
by law in the absence of any contract or
agreement.
Paragraph f. does not include that part of any
contract or agreement:
(1) That indemnifies a railroad for "bodily in-
jury" or "property damage" arising out of
construction or demolition operations,
within 50 feet of any railroad property and
affecting any railroad bridge or trestle,
tracks, road-beds, tunnel, underpass or
crossing;
(2) That indemnifies an architect, engineer or
surveyor for injury or damage ariSing out
of:
(a) Preparing, approving, or failing to pre-
pare or approve, maps, shop drawings,
opinions, reports, surveys. field orders,
change orders or drawings and specifi-
cations; or
(b) Giving directions or instructions, or
failing to give them, if that is the primary
cause of the injury or damage; or
(3) Under which the insured, if an architect,
engineer or surveyor, assumes liability for
an injury or damage arising out of the in-
sured's rendering or failure to render pro-
fessional services, including those listed in
(2) above and supervisory, inspection, ar-
chitectural or engineering activities.
10. "Leased worker" means a person leased to you by
a labor leasing firm under an agreement between
you and the labor leasing firm, to perform duties
related to the conduct of your business. "Leased
w o r k e ~ ' does not include a "temporary worker".
11."Loading or unloading" means the handling of
property:
a. Afier it is moved from the place where it is
accepted for movement into or onto an air-
craft, watercraft or "auto";
b. While it is in or on an aircraft, watercraft or
lIautoll; or
c. While it is being moved from an aircrafi, wa-
tercraft or "auto" to the place where it is finally
delivered;
but "loading or unloading" does not include the
movement of property by means of a mechanical
device, other than a hand trUCk, that is not at-
tached to the aircraft, watercraft or "auto".
Page 14 of 16 ISO Properties, Inc., 2000 CG00021001 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 27 of 86
12. "Mobile equipment" means any of the following
types of land vehicles, including any attached mao
chinery or equipment:
a, Bulldozers, farm machinery, forklifts and other
vehicles designed for use principally off public
roads;
b, Vehicles maintained for use solely on or next
to premises you own or rent;
c. Vehicles that travel on crawler treads;
d, Vehicles, whether self-propelled or not, main-
tained primarily to provide mobility to perma-
nently mounted: .
(1) Power cranes, shovels, loaders, diggers or
drills; or
(2) Road construction or resurfacing equipment
such as graders, scrapers or rollers;
e, Vehicles not described in a . b., c. or d. above
that are not self-propelled and are maintained
primarily to provide mobility to permanently
attached equipment of the following types:
(1) Air compressors, pumps and generators,
including spraying, welding, building
cleaning, geophysical exploration, lighting
and well servicing equipment; or
(2) Cherry pickers and similar devices used to
raise or lower workers;
f. Vehicles not described in a., b . c. or d. above
maintained primarily for purposes other than
the transportation of persons or cargo.
However, self-propelled vehicles with the fol-
lowing types of permanently attached equip.
ment are not "mobile equipment" but will be
considered "autos":
(1) Equipment designed primarily for:
(a) Snow removal;
(tI) Road maintenance, but not construction
or resurfacing; or
(c) Street cleaning;
(2) Cherry pickers and similar devices
mounted on automobile or truck chassis
and used to raise or lower workers; and
(3) Air compressors, pumps and generators,
including spraying, welding, building
cleaning, geophysical exploration, lighting
and well serviCing equipment.
13.1l0ccurrence" means an . accident, including con-
tinuous or repeated exposure to substantially the
same general harmful condi tions.
14. "Personal and advertising injury" means injury,
including consequential "bodily injury", arising out
of one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry
into, or invasion of the right of private occu-
pancy of a room, dwelling or premises that a
person occupies, committed by or on behalf of
its owner, landlord or lessor;
d. Oral or written publication, in any manner, of
material that slanders or libels a person or or
ganization or disparages a person's or organi.
zation's goods, products or services;
e. Oral or written publication, in any manner, of
material that violates a person's right of pri
vacy;
f. The use of another's advertising idea In your
"advertisement"; or
g. Infringing upon another's copyright, trade dress
or slogan in your "advertisement".
IS. "Pollutants" mean any solid, liquid, gaseous or
thermal irrilant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis, chemicals and
waste. Waste includes materials to be recycled,
or reclaimed.
16. "Products-completed operations hazard":
P. Includes all "bodily injury" and "property dam-
age" occurring away from premises you own or
rent and arising out of ' your product" or "your
work" except:
(1) Products that are still in your physical pos-
session; or
(2) Work that has not yet been completed or
abandoned. However, "your work" will be
deemed completed at the earliest of the
following times:
(a) When all of the work called for in your
contract has been completed.
(b) When all of the work to be done at the
Job site has been completed if your
contract calls for work at more than one
job site.
(c) When that part of the work done at a job
site has been put to its intended use by
any person or organization other than
another contractor or subcontractor
working on the same project.
Work that may need service, maintenance,
correction, repair or replacement , but which
is otherwise complete, will be treated as
completed.
CG 000210 01 ISO Properties, Inc., 2000 Page 15 of 16 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 28 of 86
b. Does not include "bodily injury" or "property
damage" arising out of:
(1) The transportation of property, unless the
injury or damage arises out of a condition
in or on a vehicle not owned or operated by
you. and that condition was created by the
"loading or unloading" of that vehicle by
any insured;
(2) The existence of tools, uninstalled. equip-
ment or abandoned or unused materials; or
(3) Products or operations for which the classi-
fication, listed in the Declarations or in a
policy schedule. states that products-
completed operations are subject to the
General Aggregate Limit.
17. "Property damage" means:
a. Physical injury to tangible property, including
all resulting loss of use of that property. All
such loss of use shall be deemed to occur at
the time of the physical injury that caused it: or
b, Loss of use of tangible property that is not
physically injured. All such loss of use shall be
deemed to occur at the time of the "occur-
rence" that caused it.
For the purposes of this insurance, electronic data
is not tangible property.
As used in this definition, electronic data means
information, facts or programs stored as or on,
created or used on, or transmitted to or from,
computer software, including systems and appli-
cations software, hard or floppy disks, CD-ROMS,
tapes, drives, cells, data processing devices or
any other media which are used with electronically
controlled equipment.
18. "Suit" means a civil proceeding in which damages
because of "bodily injury", "property damage" or
"personal and advertising injury" to which this in-
surance applies are aJleged. "Suit" includes:
. a. An arbitration proceeding in which such dam-
ages are claimed and to which the insured
must submit or does submit with our consent;
or
b, Any other alternative dispute resolution pro-
ceeding in which such damages are claimed
and to which the insured submits with our con-
sent.
19. "Temporary w o r k e ~ ' means a person who is fur-
. nished to you to substitute for a permanent "em-
ployee" on leave or to meet seasonal or short-
term workload conditions.
20, "Volunteer worker" means a person who is not
your "employee", and who donates his or her work
and acts at the direction of and within the scope of
duties determined by you, and is not paid a fee,
salary or other compensation by you or anyone
else for their wort< performed for you.
21. ''Your product":
a, Means:
(1) Any goods or products, other than real
property, manufactured, sold, handled, dis-
tributed or disposed of by:
(a) You;
(b) Others trading under your name; or
(e) A person or organization whose busi-
ness or assets you have acquired; and
(2) Containers (other than vehicles), materials,
parts or eqUipment furnished in connection
with such goods or products.
b. Includes:
(1) Warranties or representations made at any
time with respect to the fitness, quality, du-
rability, performance or use of "your prod-
uct"; and
(2) The providing of or failure to provide
warnings or instructions.
c. Does not include vending machines or other
property rented to or located for the use of
others but not sold.
22. "Your work":
a. Means:
(1) Work or operations performed by you or on
your behalf; and
(2) Materials, parts or equipment furnished in
connection with such work or operations.
b. Includes:
(1) Warranties or representations made at any
time with respect to the fitness, quality, du-
rability, performance or use of "your work"
and
(2) The providing of or failure to provide
warnings or instructions.
Page 16 of 16 ISO Properties, Inc., 2000 CG 00 02 10 01 o
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 29 of 86
Namr:d Insured Endorsement Number
Hydro International Holdings, Inc.
Policy Symbol
I PollctNlJmber 1 Poley Period
Effed.iw Dale of Endorsemenl
GLW G24151785 001 08/01/2010
TO
08/01/2011
Issued 8y (Name of InSurance Company)
Illinois Union Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
THIS IS A CLAIMS-MADE POLICY WHICH COVERS ONLY CLAIMS FIRST MADE AGAINST THE INSURED
AND REPORTED TO THE INSURER, IN WRITING, DURING THE POLICY PERIOD OR EXTENDED
REPORTING PERIOD, IF ANY.
In consideration of the premium charged, it is hereby agreed the following coverage is added to the policy:
COVERAGES CONTRACTORS POLLUTION LIABILITY
A. Insuring Agreement
1. We will pay those sums in excess of the deductible shown in the Declarati ons that the
insured becomes legally obligated to pay as damages because of bodily injury or
property damage to which this insurance applies. We shall have the right and duly to
defend the Insured against any claim or suit seeking those damages. However, we shall
have no duty to defend the Insured against any claim or suit seeking damages for
bodily injury or property damage to which this insurance does not apply.
We may, at our discretion, investigate any loss and selUe any claim(s) or suit(s) that
may result. But the amount we will pay for damages is limited as described in the LIMITS
OF INSURANCE AND DEDUCTIBLE Section; and our right and duty to defend ends
when the applicable limit of insurance has been exhausted in the payment of judgments.
settlements or supplementary payments under all attached Coverage Parts and all
Supplementary Payments which reduce the Limit of Insurance.
2. This insurance applies to a loss only if:
a. The loss takes place in the coverage territory arising out of your work; and
b. Your work did not occur before the Retroactive Date, if any. shown in the
Declaration or after the end Of the policy periOd; and
c. The clalm(s) or sult(s) is first made against any Insured, in accordance with
Paragraph 3. below, during the policy period or any Extended Reporting Period
we provide under the Extended Reporting Periods Section.
3. A claim or suit by a person or organization seeking damages will be deemed to have
been made at the earlier of the following times:
a. When notice 01 such claim or suit is received and recorded by any Insured or by
us. whichever comes first; or
b. When we make a settlement in accordance with Paragraph 1. above.
All clalm(s) or sult(s) lor damages because of a loss to the same person, including damages
claimed by any person or organization for care, loss of services, or death resulting at any time
from the loss, will be deemed to have been made at the time the first of those clalm(s) or suit(s)
is made against any Insured.
ENV-1104 (0606)
Copyright @ 2006 iI
Page 1 of 12
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 30 of 86
B. Exclusions
This insurance does not apply to:
1. Contractual Liability
Bodily injury or property damage arising out of any liabilrty of others assumed by the
insured through contract or agreemem. This exdusion shall not apply to liability for
damages:
a. That would have otherwise attached to the insured in the absence of suCh
contract or agreement; or
b. Assumed In a contract or agreement that is an insured contract. provided the
bodily Injury and property damage occurs subsequent to the execution of the
contract or agreement. Solely for the purpose of liability assumed in an Insured
contract, reasonable attomey fees and necessary litigati on expenses incurred
by or for a party other than an Insured are deemed to be damages because of
bodily injury and property damage provided:
(1) Liability to such party for , or for the cost of, that party's defense has also
been assumed in the same insured contract; and
(2) Such attomey fees and litigation expenses are for defense of that party
against a civil or altemative dispute resolution proceeding in which
damages to which this insurance applies are alleged.
2. Damage to Your Work
Property damage to your work arising out of it or any part of it and included in the
products-completed operations hazard.
This exclusion does not apply if the damaged work or the work out of which the damage
arises was performed on your behalf by a subcontractor.
3. Employer's Liability
Bodily injury to:
ENV-1 104 (06,06)
a. An Insured or an employee of the Insured, its parent, subsidiary or affiliate:
(1) Arising out of and in the course of employment; or
(2) While performing duties related to the conduct of the Insured's business.
b. The spouse, child, parent, brother or sister of that employee of the insured, its
parent, subsidiary or affiliate as a consequence of Paragraph a. above.
This exclusion applies:
a. Whether the Insured may be liable as an employer or in any other capacity; and
b. To any obligation to share damages with or repay someone else who must pay
damages because of such bodily Injury.
Copyright@ 2006 a
Page2of12
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 31 of 86
This exclusion does not apply to liability assumed by the insured under an
insured contract.
4. Executive Officer
Bodily injury or property damage arising from your services andl or capacity as an
executive officer. director. partner. trustee or employee of a business enterprtse not
named in the Declarations.
5. Expected or Intended Injury
Bodily injury or property damage expected or intended from the standpoint of the
insured.
6. Fines and Penalties
Any fines or penalties Imposed on the insured. or any clalm(s) seeking payment for
punitive. exemplary or multiplied damages, or injunctive reli ef artsing out of any insured's
knowing. willful or deliberate noncompliance with any statute. regulation. ordinance or
admi nistrative complaint. This exclusion also applies to any legal COSIS associated with
such fines or penalties.
7. Insured's Internal Expenses
Claim(s) arising from expenses incurred by the insured for services performed by the
salaried staff and employees of the insured.
8. Impaired Property
Any suit(s) or clalm(s) anslng out of property damage to Impaired property or
property that has not been physically injured. arising out of:
a. A defect. deficiency, inadequacy or dangerous condition in your product or your
work; or
b. A delay or failure by you or anyone acting on your behalf to perform a contract or
agreement in accordance with its terms.
This exclusion does not apply to the loss of use of other properly arising out of sudden
and accidental physical injury to your product or your work after ~ has been put to its
intended use.
9. tnsured's Real Property
Bodily Injury or property damage artsing from the insured's ownership. rental , lease,
maintenance, operation, use, repair. voluntary or involuntary sale. transfer, exchange,
gift. abandonment. or condemnation of real property.
10. Intentional Acts
ENV-ll O-! (OS.()6)
. Bodily injury or property damage based upon or arisingfrorn ahy acts olthe insured
whioh are based upon or otherwise attributed to the Insured's dishonest, intentional ,
fraudulent, malicious, w i l ~ u l . del iberate or knowingly wrongful act or non-compliance wi th
any statute. regulation, ordinance. administrative complaint, notice of violation, notice
letter. executive order. or instruction of any governmental agency or body prior to or after
inception of this policy.
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11. Non-Owned Disposal Sites
Bodily injury or property damage based upon or arising from any malerial or waste
transported beyond the boundaries of job sites where your work is being performed or
has ever been performed. This exclusion does not apply to water or wastewater'
discharged from the jobsite in compliance with penmits or instructions issued by a
governmental agency or body either before or after policy inception.
12. Other Enterprises
Bodily injury or property damage anslng out of any business enterprise owned,
operated or managed by the insured or its parent company or the affiliate, successor or
assignee of such company not named in the Declarations.
13. Other Named Insureds
Bodily injury or property damage arising out of clalm!s) against you by any other
Named Insured,
14. Products Liability
Bodily injury or property damage arising out of your product.
15. Professional Liability
Bodily injury or property damage arising from or in any way related to the rendering of
or failure to render professional services by tihe insured or any contractor or
subcontractor working on the insured's behaW. Professional services include, but are not
limited to, recommendations, opinions, and strategies rendered for architectural,
consulting, design and engineering work, such as drawings, designs, maps, reports,
surveys, change orders, plan specifications, assessment work, site maintenance,
equipment selection, and related construction management, supervisory, inspection or
engineering services.
16. Vehicles
Bodily injury or property damage arising from the use, maintenance, entrustment to
others, or operation of any auto, aircraft, watercraft or other conveyance. This exclusion
does not apply to bodily injury or property damage arising out of the use, maintenance,
entrustment to others, or operation of any auto, aircraft, watercraft or other conveyance
within tihe boundaries of the job site Where your work Is being performed.
17. War or Hostile Acts
Bodily injury and property damage based upon, arising out of any consequence,
whether direct or indirect, of war, Invasion, act of foreign enemy, hostilities (whether
declared or not), hostile acts, civil war, rebellion, revolution, insurrection or military or
usurped power, strike, riot, or civil commotion.
18. W:orkers' Compensation
ENV1104 (06-06)
Claim(5) or suites) arising as a result of any obligation of any insured under any workers
compensation, disabilily benefits, or unemployment compensation law or any similar law.
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C. Supplementary Payments
We will pay. with respect to any claim(s) we investigate or settle. or any suit(s) against an
insured we defend:
1. All expenses we Incur.
2. All premiums on appeal bonds or bonds to release attachments, but only for bond
amounts within the applicable limit of insurance. The company does not have the
obligation to apply or fumish these bonds,
3, All reasonable expenses incurred by the insured at our request to assist us in the
in'vestigation or defense of the claim(o) or suit{s), including actual loss of earnings up to
$250 a day because of ti me off of work.
4. All costs taxed against the Insured in the suit(s).
5. Pre-judgment interest awarded against the insured on that part of the judgment lVe pay,
If we make an offer to pay the applicable Limit of Insurance, we will not pay any pre-
judgment interest based on that period of Ume after the offer,
6. All interest on the full amount of any Judgment that accrues after entry of the judgment
and before we have paid, offered to pay, or deposited in court the part of the judgment
Ihat is wilhin the applicable Limil of Insurance.
These payments will reduce the Limits of Insurance shown in the Declarations.
LIMITS OF INSURANCE AND RETENTION
For the purposes of this endorsement it is agreed that Ihe following cendilions are added to the
COMMERCIAL GENERAL UABILITY POLICY, SECnON III. LIMITS OF INSURANCE:
The Contraclors Pollution Liability Limit shown in the Declarations is the most we will pay for the sum of
all damages because of a loss arising out of anyone pollution condition under this Policy. The most we
will pay w ~ h respect to any pollution condition that continues during the policy periods of more than one
Pollution Liability Policy is the Contractors Pollution Liability Limit shown in the Declarations applicable to
tlie first policy period during which the pollution condition commenced.
The General Aggregate Limit will be amended to include damages and Supplementary Payments under
the Contractors Pollution Liability coveraga part. The General Aggregate Limit shown in the Declarations
is the most we will pay for the sum of damages under all Coverage Parts and Supplementary Payments
afforded by this Policy.
The Limits of Insurance shown in the Declarations will apply separately to each consecutive annual period
and to any remaining period of less than twelve (12) months. starting with the beginning of the policy
period shown in the Declarations, unless the policy period is extended after issuance for an addilional
period of less than twelve months. In that case, the additional period will be deemed part of the last
preceding period for the purpose of determining the Limits of Insurance.
The deductible amount stated on the Declarations is applicable to each pollution condition, The
deducti ble amount applies once to each pollution condition and applies to defense expenses,
investigation, settlement compromise, or indamnification.
We, at our sale alection and option, may either:
ENV11IH (06-06)
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1, Pay any part of the deductible emount to effect settlement or expense of any claim, and upon
notification of the action taken, you shall promptly reimburse us for such part of the deductible
amount that has been paid by us; or
2, Simultaneously upon receipt of notice of any claim or at any time thereafter, call upon you to pay
or deposit with us all or any part of the deductible amount, to be held and applied by us at our
sale discretion,
GENERAL CONDITIONS
For the purposes of this endorsement. it is agreed that the following conditions are added to the
COMMERCtAL GENERAL LtABILtTY POLICY, SECTION IV, - COMMERCIAL GENERAL LIABILITY
CONDITIONS:
Inspection
With reasonable notice to the insured, the Insurer shell be permitted, but not obligated, to inspect the
insured's premises, equipment, andlor operations, Neither the Insurer's right to make inspections nor the
making thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the
insured or others, to determine or werrant that such property or operations are safe or in compliance with
any applicable law, regulation or rule, Any recommendations or information provided is not intended es a
substitute for advice from a safety expert or legal counsel you may retain for your own purposes, It is not
intended to supplant any legal duty you may have to provide a safe premises, workplace, product or
operation,
Headings
The descriptions in the headings and sub-headings of this policy are inserted solely for convenience and
do not constitute any part of the terms or conditions hereof,
DEFINITIONS
For the purposes this endorsement, it is agreed that the following definitions will apply:
A. Auto means a land motor vehicle, trailer or semi-trailer designed for travel on public roads,
including any attached machinery or equipment. But auto does not include mobile equipment,
B, Bodily Injury means physIcal Injury, illness or disease, mental anguish or emotional distress,
sustained by any person, including death resulting therefrom.
C, Ctalm means any written demand, notice, request for defense, request for indemnrty, or other
legal or equitable proceeding against any insured by a person, entity or asserted class for loss.
D, Cleanup costs means expenses incurred in the investigation, evaluation, monitoring, testing,
removal , containment, treatment, response, disposal, remediation, detoxification or neutralization
of any pollutIon condItIons to the exlent required by applicable environmental laws.
E. Coverage territory means:
1, The United States of America, its territories and posseSSions, Puerto Rico and Canada.
2, International waters or airspace, but only if the injury or damage occurs in the course of
travel or transportation between any places included in Item 1, above.
ENV-1104 (06-06)
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F. Employee includes temporary andlor leased staff working on behalf of and under direct
supervision by you, but only for your work.
G. Environmental laws mean federal, state, provincial, municipal or other local laws, statutes,
ordinances, regulations, and all amendments thereto, including state voluntary cleanup or risk-
based corrective acUon guidance, governing the liability of the Insured with respect to pollution
conditions.
H. Executive officer means a person holding any of the officer positions created by your charter,
constitution, by-laws or any other similar governing document.
I. Hostile acts mean:
1. Use or threat of force or violence; or
2. The commission of or threat to commit a dangerous act; or
3. Commission of or threat of an act that interferes with or disrupts an electronic,
communication, information, or mechanical system; or
4. Intimidation or coercion of a government or Civilian population or any segment thereof, or
the disruption of the economy, or any segment of the economy; or
5. The release of pathogenic or poisonous biological or chemical materials, if such rel ease
was intentionally caused.
J. Impaired property means tangible property, other than your product or your work, that cannot
be used or is less useful because: .
1. It incorporates your product or your work that is known or thought to be defective,
deficient, inadequate or dangerous; or
2. You have failed to fulfill the terms of the contract or agreement;
W such property can be restored to use by:
1. The repair, replacement, adjustment or removal of your product or your work; or
2. Your fulfilling the terms of the contract or agreement.
K. Insured contract means:
1. A sidetrack agreement;
2. Any easement or ilcense agreement, except in connection with construction or demolition
operations on or within 50 feet of a railroad;
3. An obligation, as required by ordinance, to indemnify a municipality, except in connection
with work for a municipality;
.. 4. An elevator maintenance agreement;
5. That part of any other contract or agreement pertaining to your business (including an
indemnifi cation of a municipality in connection with work performed for a municipality)
under which you assume the tort liability of another party to pay for bodily injury or
property damage to a third person or organization. Tort liability means a liability that
would be Imposed by law in the absence of any contract or agreement.
ENV-11 04 (06 06)
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Paragraph S. does not include that part of any contract or agreement:
a. That indemnifies a railroad for bodily injury or property damage arising out of
constiuctioii Oi demolition opeiations, within 50 feet of any rniliOad piOperty and
affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or
crossing;
b, That indemnifies an architect, engineer or surveyor for injury or damage arising
out of:
(1) Preparing, approving, or failing to prepare or approve, maps, shop
drawings, opinions, reports, surveys, field orders, change orders or
drawings and specifications; or
(2) Giving directions or instructions, or failing to give them, if that is the
primary cause of the injury or damage; or
c, Under which the Insured, if an architect, engineer or surveyor, assumes liability
for an injury or damage arising out of the Insured's rendering or failure to render
professional services, including those listed in S.b. above and supervisory,
inspection, architectural or engineering activities.
L, Loss means bodily injury or property damage, neither expected nor intended from the
standpoint of the insured, caused by or resulting from a pollution condition and which results in
a claim or suit.
M. Mobile equipment means any of the following types of land vehicles, including any attached
machinery or equipment:
1. Bulldozers, farm maChinery, forklifts and other vehicles designed for use principally off
public roads;
2. Vehicles maintained for use solely on or next to premises you own or rent;
3. Vehicles that travel on crawler treads;
4. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to
permanently mounted:
a, Power cranes, shovels, loaders, diggers or drills; or
b, Road construction or resurfacing equipment such as graders, scrapers or rollers;
5. Vehicles not described in 1., 2., 3. or 4. above that are not self-propelled and are
maintained primarily to provide mobility to permanently attached eqUipment of the
following types:
a. Air compressors, pumps and generators, including spraying, welding, building
cleaning, geophysical exploration, lighting and well servicing eqUipment; or
b. Cherry pickers and similar devices used to raise or lower workers;
6. . Vehicles not descrtbed in 1., 2., 3. or 4. above maintained primarily for purposes other
than the transportation of persons or cargo.
However, self-propelled vehicles with the following types of permanently attached equipment are
not mobile eqUipment but will be considered auto:
ENV-1104 (06-06)
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a. Equipment designed primarily for:
(1) Snow removal ;
(2) Road mainlenance, bul nol conslruction or resurfacing; or
(3) Sireet cleaning;
b. Cherry pickers and similar devices mounled on auto or Iruck chassis and used 10
raise or lower workers; and
c. Air compressors, pumps and generators, including spraying, welding, building
cleaning, geophysical exploration, lighting and wel l servicing equipment.
N. Named Insured means Ihe person or enlily shown in lIem 1. of Ihe Declarations.
o. Natural resource damage means damage for, injury 10, deslruction of, or loss of fish, wildlife,
biota, land, air, water, groundwater, drinking waler supplies, and other similar resources
belonging to, managed by, held in Irusl by, appertaining to, or otherwise conlrolled by the United
States, and state or local government, any foreign government. or any Indian Tribe, including the
reasonable costs of assessing such injury, destruction or loss resulting Iherefrom.
P. Pollution condition means the discharge, dispersal, release, escape, migration, or seepage of
any solid, liquid, gaseous or thermal, material matter, ionlanl or contamlnanl. including smoke.
soot, vapors. fumes, acids. alkalis. chemicals, hazardous substances, hazardous malenals, or
wasle materials, on, in, inlo, or upon land and slruclures Ihereupon, Ihe atmosphere, surface
waler or groundwater.
Q. Products completed operations hazard:
1. Includes all bodily injury and property damage occurring away from premises you own
or renl and caused by pollution condiUons arising out 01 your product or your work
except:
a. Products Ihat are still in your physical possession; or
b. Work that has not yel been completed or abandoned. However, your work will
be deemed completed at Ihe earliesl of Ihe following times:
(1) When all of the work cal led for in your contract has been completed.
(2) When all of the work to be done al the job sile has been completed W
your conlract calls for work at more Ihan one job site.
(3) When that part of the work done al a job site has been put to its intended
use by any person or organization olher than another contraclor or
subconlractor working on the same project.
Work thatmay need service, maintenance, correction. repair or replacemenl, but which is
olherwise complele, will be trealed as completed.
2. Does not indude bodily injury or property damage arising out of
ENV1104 (0606)
a. The Iransportalion 01 property, unless Ihe injury or damage arises oul of a
condilion in or on a vehicle nol owned or operated by you, and Ihal condilion was
created by Ihe loading or unloading of that vehicle by any Insured;
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b. The existence of tools, uninstalled equipment or abandoned or unused materials.
R, Property damage means:
1. 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 physical injury that caused it; or
2. Loss of use of tangible property that is not physically injured. All such loss of use shall be
deemed to occur at the time of the loss; or
3. Cleanup costs.
4. Natural Resource Damage.
s. Suit means a civil proceeding in which damages because of bodily injury or property damage
to which this insurance applies are alleged. Suit includes:
1. An arbitration proceeding in which such damages are claimed and to which the Insured
must submit or does submit with our consent; or
2. Any other alternative dispute resolution proceeding in which such damages are claimed
and to which the Insured submits with our consent.
T. Your product:
1. 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.
2. Includes:
a. Warranties or representations made at any time with respect to the fitness.
quality, durability, performance or use of your product; and
b. The providing of or failure to provide warnings or instructions.
3. Does not include vending machines. or other property rented to or located for the use of
others but not sold.
U. Your work:
1. Means:
a. Work or operations perfonned by you or on your behalf; and
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b. Materials, parts or equipment fumished in connection wtth such work or
operations.
2. Includes:
a. Warranties or representations made at any time with respect to the fitness,
quality, durability, performance or use of your work; and
b. The providing of or failure to provide warnings or instructions.
EXTENDED REPORTING PERIOD
In the event that t his policy is cancelled or non-renewed by the insured or the Company, for any reason,
except for non-payment of premi um or deductible amounts, the following shall apply:
A. Automatic Extended Reporting Period
1. We shall provide the insured at no additional premium an Automatic Extended
Reporting Period of sixty (60) days for any claim(s) or suit(s) first made
against the insured during this automatic extended reporting period provided:
a. The claim(s) or suit(s) arises out of a loss 10 which this insurance applies; and
b. The loss commenced on or after the Retroactive Date shown in the Declarations
and before the expiration or cancellation date of the policy; and
c. The claim(s) or suit(s) are reported in writing to us within sixty (60) days
immediately following the expiration or cancellation date of the pol icy in
accordance with GENERAL CONDITIONS, B. Duties in the Event of a Claim
or Suit, Item 2.
2. The Automatic Extended Reporting Period shall become effective on the expiration or
cancellation date of the policy.
3. The Automalic Extended Reporting Peri od shall not reinstate or increase the Limits of
Insurance, nor shall it extend the policy period or change the scope of the coverage
provided.
4. The Automalic Extended Reporting Period shall not be provided if the insured has
purchased other insurance to replace the coverage provided under this policy
B. Optional Extended Reporting Period
1. The Named Insured, upon payment of an additional premium of 200% of Ihe annual
policy premium, shall be entitl ed to purchase an Optional Extended Reporting Period of
thirty-four (34) months for any clolm(s) or suit(s) first made against the insured during this
optional extended reporting period or the automatic extended reporting period provided:
ENV1104 (06-061
a. The clalm!s) or suit(s) arises out of a loss to thisinsurance applies; and
b. The loss commenced on or after the Retroactive Date shown in the Declarations
and before the expiration or cancellation date of the policy; and
c. The clalm!s) or suites) are reported in to us within the thirty-si x (36)
months immediately following the expiration or cancellation date of the policy in
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accordance with GENERAL CONDITIONS, B. Duties in the Event of a Claim
or Suit. item 2.
2. A wriiten request for the Optional Extended Reporting Period must be received by us
within thirty (30) days immediatety following the expiration or cancellation date of the
policy.
3. Upon payment of the additional premium. the Optional Extended Reporting Period may
not be cancelled and no return premiums will be provided.
4. The Optional Extended Reporting Period shall become effective on the expiration date of
the Automatic Extended Reporting Period.
5. The Optional Extended Reporting Period shall not reinstate or increase the Limits of
Insurance. nor shall it extend the policy period or change the scope of the coverage
proVided.
ENV.1104 (06-06)
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Insured Endorsement Nlmber
Hydro International Holdings, Inc.
---_ ..
Policy Symbol
I Policy Number I Policy Period
t:ffective oi
GLW G24151765 001 06/01/2010
TO
08/01 /2011
Issueo By (Name of Insurance Company)
Illinois Union InSUrance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
THIS IS A CLAIMS-MADE POLICY WHICH COVERS ONLY CLAIMS FIRST MADE AGAINST THE INSURED
AND REPORTED TO THE INSURER, IN WRITING, DURING THE POLICY PERIOD OR EXTENDED
REPORTING PERIOD, IF ANY.
In consideration of the premium charged, it is hereby agreed the following coverage is added to the polley:
COVERAGES PROFESSIONAL LIABILITY
A. Insuring Agreement
1. We will pay those sums in excess of the retention(s) shown in the Declarations that the
insured becomes legally obligated to pay as damages because of clalm(s) that result from
the rendering or failure to render professional services for others to which this insurance
applies. We shall have the right and duly to defend the insured against any suit(s)
seeking those damages. However, we have no duties to pay damages as a result of
claim(s) nor shall we have any duty to defend the insured against any suit(s) seeking
damages that result from rendering or failure to render professional services to which
this insurance does not apply.
We may, at our discretion, investigate any alleged act, error, or omission and settle any
claim(s) that may result. But the amount we will pay for damages is limited as described
in the UMITS OF INSURANCE AND RETENTION Section; and our right and duty to
defend ends when the applicable limit of insurance has been exhausted in the payment of
judgments, settlements or supplementary payments under all attached Coverage Paris
and all Supplementary Paymenls which reduce the Limit of Insurance.
2. This insurance applies to clalm(s) that result from the rendering or failure to render
professional services only if:
a. The alleged act. error, or omission takes place after the Retroactive Date, if any,
shown in Ihe Declarations and before the end of the policy period; and
b. The damages are caused by an alleged act, error, or omiSSion that takes place in
the coverage territory; and
c. The claim(s) are first made against any insured, in accordance with Paragraph
3. below, during the policy period or any Extended Reporting Period we provide
under the EXTENDED REPORTING PERIOD Section.
3, A claim by a person seeking damages will be deemed to have been
made at the earlier of the following times:
ENV 1105 (06-06)
a. When a notice of such claim is received and recorded by any insured or by us,
whichever comes first; or
b. When we make a settlement in accordance with Paragraph 1. above.
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If additional claims are subsequently made which arise OUI of the same specific set of
facts as a claim already made in accordance with Paragraph 2. above, then all such
additional claims shall be deemed first made within the policy year or extended reporting
period in which the earliest claim arising out of such specific set of facts was made, and
all such claims shall be subject to the same Limit of Insurance.
B. Exclusions
This insurance does not apply to:
1. Contractual Liability
Claim(s) based upon or arising from any liability of others assumed by the insured
through contract or agreement. This exclusion shall not apply to li ability:
a. That the insured would have in the absence of a contract or agreement; or
b. That would result from the rendering or failure to render professional services.
2. Employer's Liability
Claim(s) based upon or arising from the Injury to any present or former employee or
executive officer of any insured, including but not li mited to wrongful termination,
discrimination, or any unfair employment practices.
3. Executive Officer
Claim(s) based upon or arising from your services andlor capacity as an executive
officer, director, partner, trustee or employee of a business enterprise not named in the
Declarations.
4. Expressed Warranties and Guarantees
Claim(s) based upon or arising from express warranties and guarantees.
5. Fines and Penalties
Any fi nes or penalties imposed on the insured, or any clalm(s) seeking payment for
punitive, exemplary or multiplied damages, or injunctive relief arising out of any insured's
knowing, willful or deliberate noncompliance with any statute, regulation, ordinance or
administrative complaint. This exclusion also applies to any legal costs associated with
such fines or penalties.
6. Faulty Workmanship
Claim(s) based upon or arising from the cost to repair or replace any faulty workmanship.
construction or work not performed, executed, or completed in accordance with your
professional services.
7. .. tnsured's Property
ENV1105 (0606)
Claim(s) based upon or arising from the insured's ownership, rental, lease, maintenance,
operation, use, repair, voluntary or involuntary sale, transfer, exchange, gift,
abandonment, or condemnation of real or personal property.
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8. Insurance and Suretyship
Claim(s) arising from. or in any way related to your advising or requiring others, or the
failure to advise or require others, to maintain any form of insurance, suretyship or bond.
9. Insured's Internal Expenses
Clalm(s) based upon or arising from expenses incurred by the insured for services
performed by the salaried staff and employees of the insured.
10. Intentional Acts
Claim(s) based upon or arising from any acts of the insured which are based upon or
otherwise attributed to the insured's dishonest, intentional, fraudulent, malicious, willful,
deliberate or knowingly wrongful act or non.compliance with any statute, regulation,
ordinance, administrative complaint, notice of violation, notice letter, executive order, or
instruction of any governmental agency or body prior to or after inception of this policy.
11. Non-Owned Disposal Sites
Claim(s) based upon or arising from any material or waste transported beyond the
boundaries of job sites where your work is being performed or has'ever been performed.
This exclusion does not apply to water or wastewater discharged from the jobsite in
compliance with permits or instructions issued by a governmental agency or body either
before or after policy inception.
12. Other Enterprises
Claim(s) based upon or arising form any business enterprise owned, operated or
managed by the insured or its parent company or the affiliate, successor or assignee of
such company not named in the Declarations.
13. Prior Claims
Claim(s) made against you prior to the inception of this policy.
14. Products Liability
Claim(s) arising out of your product.
15. Vehicles
Bodily injury or property damage arising from the use, maintenance, entrustment to
others, or operation of any auto, aircraft, watercraft or other conveyance. This exclusion
does not apply to bodily injury or property damage arising out of the use, maintenance,
entrustment to others, or operation of any auto, aircraft, watercraft or other conveyance
within the boundaries of the job site where your work is being performed.
16. Workers' Compensation
Claim(s) arising as a result of any obligation of any insured under any workers
compensation, disability benefits, or unemployment compensation law or any similar law.
C, Supplementary Payments
We Witt pay, with respect to any claim(s) we investigate or settle, or any suit(s) against an
insured we defend:
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1. All expenses we incur.
2. Ail premiums on appeai bonds or bonds to rei ease attachments, bui only for bond
amounts within the applicable Limit of Insurance. The company does not have the
obligation to apply for or furnish these bonds.
3. All reasonable expenses incurred by the tnsured at our request to assist us in the
investigation or defense of the claim(s) including actual loss of earnings up to $250 a day
because of time off of work.
4. All costs taxed a ~ a l n s t the insured in the sutt(s).
5. Prejudgment interest awarded against the insured on that part of the judgment we pay. If
we make an offer to pay the applicable Limit of Insurance, we will not pay any
prejudgment interest based on that period of time after the offer.
6. All interest on the full amount of any judgment that accrues after entry of the judgment
and before we have paid, offered to pay, or depOSited in court the part of the judgment
that is within the applicable Limit of Insurance.
These payments will reduce the Limits of Insurance shown in the Declarations.
LIMITS OF INSURANCE AND RETENTION
For the purpose of this endorsement, it is hereby agreed that the fol lowing is added to COMMERCIAL GENERAL
LIABILITY COVERAGE FORM, SECTION III, LIMITS OF INSURANCE:
The General Aggregate Limit shown in the Declarations is the most we will pay for the sum of damages under all
Coverage Parts and Supplementary Payments afforded by this pol icy.
The Limits of Insurance shown in the Declarations will apply to each consecutive annual period and to any
remaining period of less than twelve (12) months, starting with the beginning of the policy period shown in the
Declarations, unless the policy period is extended after issuance for an additional period of less than twelve
months. In that case, the additional period will be deemed part of the last preceding period for the purpose of
determining the Limits of Insurance.
The Professional Liability Coverage Limit shown in the Declarations is the most we will pay for the sum of
damages including Supplementary Payments under this policy because of all ctaim(s) arising out of any alleged
act, error, or omission.
We will pay covered claim(s) or losses in excess of the retention amount shown on the Declarations page.
The retention amount stated on the Declarations is applicable to each claim. The retention amount applies once
to each claim and can be applied either for defense expenses, investigation, settlement, compromise, or
indemnification.
We, at our sale election and option, may either:
1. Pay any part of the retention' al11()untto effect settlement or expense of any claim, and 'upon
notification of the actiOn taken, you shall promptly reimburse us for such part of the retention
amount that has been paid by us: or
2. Simultaneously upon receipt of notice of any claim or at any time thereafter, call upon you to pay
or deposit with us all or any part of the retention amount, to be held and applied by us at our sale
discretion.
ENV-1105 (06-06)
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GENERAL CONDITIONS
For the purpose of this endorsement, it is hereby agreed that the following is added to COMMERCIAL GENERAL
LIABILITY COVERAGE FORM, SECTION IV. - COMMERCIAL GENERAL LIABILITY CONDmONS:
Inspection
With reasonable noUce to the insured, the Insurer shall be permitted, but not obligated, to Inspect the
insured's premises, equipment, and/or operations. Neither the Insurer's right to make inspections nor the
making thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefrt of the
insured or others, to determine or warrant that such property or operations are safe or in compliance with
any applicable law, regulation or rule. Any recommendations or information provided is not intended as a
substitute for advice from a safety expert or legal counsel you may retain for your own purposes. It is not
intended to supplant any legal duty you may have to provide a safe premises, workplace, product or
operation.
Headings
The descriptions in the headings and sub-headings of this policy are inserted solely for convenience and
do not constitute any part of the terms or conditions hereof.
DEFINITIONS
For the purpose of this endorsement the following definitions apply:
A. Auto means a land motor vehicle, trailer or semi-trailer designed for travel on public roads,
including any attached machinery or equipment. But auto does not include mobile equipment.
B. Claim(s) means a request or a demand received by you or us for money or services, including
the institution of suit, seekng damages arising from an act, error, or omission in the rendering or
failure to render professional services.
C. Coverage territory means:
1. The United States of America, its territories and possessions, Puerto Rico and Canada.
2. International waters or airspace, but only If the Injury or damage ooeurs in the course of
travel or transportation between any places included in Item 1, above.
D. Employee includes temporary andlor leased staff working on behalf of and under direct
supervision by you, but only for your work.
E. Environmental laws mean federal , state, provincial, municipal or other local laws, statutes,
ordinances, regulations, and all amendments thereto, including state voluntary cleanup or risk-
based corrective action guidance, governing the l i a b l l ~ y of the Insured with respect to pollution
conditions.
F. Executive officer means a person holding any of the officer positions created by your charter,
constitLltion, by-laws or any other similar governing document.
G. Mobile equipment means any of the following types of land vehicles, including any attached
machinery or equipment:
1. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off
public roads;
ENV-11 05 (06-06)
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 46 of 86
2. Vehicles maintained for use solely on or next to premises you own or rent;
3. Vehicles that travel on crawler treads;
4. Vehicles, whether self-propelled or not, maintained primarily to provide mobil ity to
permanently mounted:
a. Power cranes, shovels, loaders, diggers or drills; or
b. Road construction or resurfacing equipment such as graders, scrapers or rollers;
5. Vehicles not described in items 1., 2., 3. or 4. above that are not self-propelled and are
maintained primarily to provide mobility to permanently attached equipment of the
following types:
a. Air compressors, pumps and generators, including spraying, welding, building
cleaning, geophysical exploration, lighting and well servicing equipment; or
b. Cherry pickers and similar devices used to raise or lower workers;
6, Vehicles not described In items 1_, 2., 3, or 4, above maintained primarily lor purposes
other than the transportation of persons or cargo.
However, self-propelled vehicles with the following types of permanently attached
eqUipment are not mobile equipment but will be considered auto:
a. Equipment designed primarily for:
(1) Snow removal;
(2) Road maintenance, but not construction or resurfacing; or
(3) Street cleaning;
b. Cherry pickers and similar devices mounted on auto or truck chassis and used to
raise or lower workers; and
c. Air compressors, pumps and generators, including spraying, welding, building
cleaning, geophysical exploration, lighting and well servicing equipment.
H. Named Insured means the person or entity shown in item 1. olthe Declarations.
I. Professional services mean those archilectural , engineering, project management or
construction management services that are performed by you or on your
J. Suit(s) means a civil proceeding in which damages because of any acts, errors, or omissions to
which this insurance applies are alleged. Suit includes:
1. An arMration proceeding in which such damages are claimed and to whim the Insured
must submit or does. submit with our consent; or
2. Any other alternative dispute resoluti on proceeding in which such damages are claimed
and to which the Insured submits witln our consent.
K. Your product:
1. Means:
(06.Q6)
Copyright@ 2000 13
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 47 of 86
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.
2. Includes:
a. Warranties or representations made at any time with respect to the fitness,
quality, durability, performance or use of your product; and
b. The providing of or failure to provide warnings or Instructions.
3. Does not incl ude vending machines or other property rented to or located for the use of
others but not sold.
L. Your work
1. Means:
a. Work or operations performed by you or on your behalf; and
b. Material s, parts 'or equipment furnished in connection with such work or
operations.
2. Includes:
a. Warranties or representations made at any time with respect to the fitness,
quality, durability, performance or use of your work; and
b. The providing of or failure to provide warnings or instructions.
EXTENDED REPORTING PERIOD
In tihe event that this policy is cancelled or non-renewed by the insured or the Company, for any reason, except
for non-payment of premium or retenlion amounts. the following shall apply:
A. Automatic Extended Reporting Period
1. We shall provide the Insured at no additional premium an Automatic Extended Repcrting
Period of sixty (60) days for any cloim(s) first made against the insured during this
autoinatic exiendedreporting periodpibvided:
ENV-ll05 (06-06)
a. The clalm(s) arises out of a professional servlce(s) to which this insurance
applies; and
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 48 of 86
b. The professional service(s) commence on or after the Retroaclive Date shown
in the Declarations and before the expiration or cancellation date of the policy;
and
c. The claim(s) is reported in writing to us within sixty (60) days immediately
foll owing the expiration or cancellation date of the policy in accordance with
GENERAL CONDITIONS, B. Duties In the Event of a Claim or Suit, Item 2.
2. The Automatic Extended Reporting Period shall become effective on the expiration or
cancellation date of the policy.
3. The Automatic Extended Reporting Period shall not reinstate ortncrease the Limits of
Insurance, nor shall tt extend the policy period or change the scope of the coverage
provided.
4. The Automatic Extended Reporting Period shall not be provided if the insured has
purchased other insurance to replace the coverage provided under this policy
B. Optional Extended Reporting Period
1. The Named Insured, upon payment of an additional premium of 200% of the annual
policy premium, shall be entitled to purchase an Optional Extended Reporting Period of
thirty-four (34) months for any clalm(s) fi rst made against the insured during this optional
extended reporting period or the automatic extended neporting period provided:
a. The claim(s) arises out of a professional servlce(s) to which this insurance
applies; and
b. The professional service(s) commence on or after the Retroactive Date shown
in the Declarations and before the expiration or cancellation date of the policy;
and
c. The claim(s) is reported in writing to us wi thin lhe Ihirty-six (36) months
immediately following the expiration or cancellation date of the policy in
accordance with GENERAL CONDITIONS, B, Duties in the Event of a Claim
or Suit, item 2.
2. A written request for the Optional Extended Reporting Period must be received by us
within thirty (30) days immediately following the expiration or cancellation date of the
policy.
3. Upon payment of the addilional premi um, the Optional Extended Reporting Period may
not be cancelled and no return premiums will be provided.
4. The Optional Extended Reporting Period shall become effective on the expirati on date of
the Automatic Extended Reporti ng Period.
5. The Optional Extended Reporting Period shall not reinstate Dr increase the Limits of
Insurance, nor shall it extend the policy penod or change the scope of the coverage
provided.
ENV-1105 (06-06)
Copyright ~ 2006 m
Page 8 of 8
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 49 of 86
Named Insured Endorsement Number
Hydro International Holdings, Inc.
Policy Symbol
I 001
I
E!foMive Date of Endorsement
GLW TO 08101/2011
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
Insert tile policy number. The remainder oflhe information is to be completed only when this endorsement is issued subsequent 10 the prepelralion of the policy,
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED ENDORSEMENT
OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE
CONTRACTOR'S POLLUTION LIABILITY COVERAGE
SCHEDULE:
Name of Person or Oraani2at1on'
Any person or organization that is an owner of real property or personal property on which you are
performing operations, or a contractor on whose behalf you are performing operations, and only at the
specific written request of such person or organization to you, wherein such request is made prior to
commencement of operations.
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
A. SECTION II - WHO IS AN INSURED is amended to include as an insured the person or organization
shown in the Schedule, but only with respect to liability arising out of your ongoing operations
performed for that insured.
B. With respect to the insurance afforded to these additional insureds, the following exclusion is added:
2. Exclusions
This insurance does not apply to bodily injury or property damage occurring after:
(1) All work, including materials, parts or eqUipment furnished in connection with such
work, on the project (other than service, maintenance or repairs) to be performed by or
on behalf of the additional insured(s) at the site of the covered operations has been
completed; or
(2) That portion of your work out of which the injury or damage arises has been put to its
intended use by any person or organization other than another contractor or
subcontractor engaged in performing operations for a principal as a part of the same
project.
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 50 of 86
--
Named Insured Endorsement Number
Hydro International Holdings, Inc.
POlicy Symbol
I. PaiCY Number
1 POlicy Period
Cffec'Jve Dsle of
GLW G24151 785 001 0810112010 TO 0810112011
By (Name d l nsul'arl(;e Compeoy)
Illinois Union Insurance Company
Insert the policy number. The remainder of the information is to be completed only when this endorsement Is issued to the preparation of the policy.
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED ENDORSEMENT - OWNERS, LESSEES OR CONTRACTORS
(PRIMARY AND NON-CONTRIBUTORY)
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE
CONTRACTOR'S POLLUTION LIABILITY COVERAGE
SCHEDULE:
Name of Person o.r Organi7.ation:
Any person or organization that is an owner of real property or personal property on which you are
performing operations, or a contractor on whose behalf you are performing operations, and only at
the speCific written request of such person or organization to you, wherein such request is made
prior to commencement of operations.
(If no entry appears above, information reqUired to complete this endorsement will be shown in the Declarations
as applicable to this endorsement. )
SECTION II - WHO IS AN INSURED is amended to include:
A. SECTION II - WHO IS AN INSURED is amended to include as an insured the person or organization
shown in the Schedule, but only with respecl to liability arising out of your ongoing operations
performed for that insured.
B. With respect to the insurance afforded to these additional insureds, the following exclusion is added:
2. Exclusions
This insurance does not apply to bodily Injury or property damage occurring after:
(1) All work, including materials, parts or equipment furnished in connection wi th such
work, on the project (other than service, maintenance or repairs) to be performed by or
on behalf of the additional insured(s) at the site of the covered operations has been
completed; or
.. (2) That portion of your work out of which the inj uryordamagealises has been put to tts
intended use by any person or organization other than another contractor or
subcontractor engaged in performing operations for a principal as a part of the same
project.
C. The coverage provided hereunder shall be primary and not contributing wrrh any other insurance
available to those deSignated above under any other third party liability policy.
ENV-3101 (0804) Indudes copyrighted material of Insurance Services Office, Inc. with Its permission Page 1 of I
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 51 of 86
NClmed Insured Endorsemeni Number
Hydro International Holdings, Inc,
Policy Symbol
--'"I POl icy Number I Policy Period
Effective Date of t:ntiorsemert
GLW G24151785 001 08/01/2010 TO 08/0112011
Issued By (Name c:ll nsurance Company)
Illinois Union Insurance Company
Insert the pol icy number. The ramainder of the Information is to be completed only when this endorsement is issued subsequent to th& preparation 01 the policy.
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY,
ALL KNOWN OR REPORTED INCIDENTS EXCLUSION
ThiS insurance does not apply to bodily Injury. property damage. personal and advertising Injury. or
pollution conditions from any incident. claim, suit. act. error. omission; or accident of which the insured is
aware. or reasonably should have been aware. committed by. alleged to have been commit1ed by, occurring or
reported to the insured. his agent, broker or insurance company prior to the inception date of this policy are
excluded from coverage under this policy,
All other terms and conditions remain the same.
ENV31 03 (08-04) Page 1 011
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 52 of 86
Named Insured Er,dorsement Number
Hydro International Holdings, Inc.
Policy Symbol
I 001 I
Effective Date of Endorsement
GLW TO 08/01/2011
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
Insert the policy number. The remainder of the Information Is to be completed only when this endorsemellt Is Issued subsequent to the preparation of the policy
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
COMMON POLICY CONDITIONS
All Coverage Parts included in this pelicy are subject to the following conditions:
A. Cancellation
1. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering
to us advance written notice of cancellation.
2. We may cancel this policy by mailing or delivering to the first Named Insured written notice of
cancellation at least:
a. Ten (10) days before the effective date of cancellation if we cancel for nonpaymenl of
premium; or
b. Thirty (30) days before the effective date of cancellation if we cancel for any other
reason.
3. We will mail or deliver our notice of cancellation to the first Named Insured's last mailing address
known to us.
4. Notice of cancellation will state the effective date of cancellation. The policy period will end on
that date.
5. If Ihls policy is cancelled, we will send the first Named Insured any premium refund due. If we
cancel, the refund will be pro rata. lIthe first Named Insured cancels, the refund may be less Ihan
pro rata. The cancellation will be effective even if we have not made or offered a refund.
6. If notice is mailed, proof of mailing will be sufficient proof of notice.
B. Changes
This pelicy contains all the agreements between you and us concerning the insurance afforded. The first
Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with
our consent This policy's terms can be amended or waived only by endorsement issued by us and made
a part 01 this policy.
C. Examination of Your Books and Records
We may examine and audit your books and records as they relate to this policy at any time.
D. Inspections and Surveys
1. We have the right to:
a. Make inspections and surveys at any time;
ENV-3107 (0904) Includes copyrighted material of Insurance Services Office, Inc. with Its permission Page 1 of2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 53 of 86
b. Give you reports on the conditions we find; and
c. Recommend changes.
2. We are not obligated to make any inspections, surveys, reports or recommendations and any
such actions we do undertake relate only to insurability and the premiums to be charged. We do
not make safety inspections. We do not undertake to perform the duty of any person or
organization to provide for the health or safety of workers or the public. And we do not warrant
that aanditions:
a. Are safe or healthful; or
b. Comply with laws, regulations, codes or standards.
3. Paragraphs 1. and 2. of this condition apply not only to us, but also to any rating, advisory, rate
service or similar organization which makes insurance inspections, surveys, reports or
recommendations.
E. Premiums
The first Named Insured shown in the Declarations:
1. Is responsible for the payment of all premiums; and
2. \Nill be the payee for any return premiums we pay;
3. Is responsible for the prompt payment of all deductibles under this policy.
F. Transfer afYaur Rights and Duties Under This Policy
Your rights and duties under this policy may not be transferred without our written consent except in the
case of death of an individual named insured.
If you die, your rights and duties will be transferred to your legal representative but only while acting
within the scope of dulies as your legal representative. Until your legal representative is appointed,
anyone having proper temporary custody of your property will have your rights and duties but only with
respect to that property.
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 54 of 86
Named Insured Endorsement Number
Hydro International Holdings, Inc.
1-'00iCY S)'mbOi
I Pelley Number I POlicy Period
t: ffedive Dale of Endofsement
GLW G24151785 001 08/01 /2010 TO
08/011201 1
Issued By (Name oI ln$\Jronce Company)
Illi nois Union Insurance Company
Insert the policy number, The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation Of the policy,
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY,
DEDUCTIBLE LIABILITY INSURANCE ENDORSEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE
SCHEDULE
Coverage Per Claim Deductible Per Occurrence Deductible
Bodily Injury & Property Damage Liability Combined
Not Applicable $10,000.00
A. Our obligation under the Bodily Injury Liabi lity and Property Damage Liability coverage parts to pay
damages on your behalf applies only to the amount of damages in excess of any Deductible amounts
stated In the Schedule above, as applicable to such coverage.
B. Deductible amounts may be on either a Per Claim or Per Occurrence basis. The Deductibl e amount
stated in the Schedule above applies as foll ows:
1. Per Claim Basis
If the Deductible amount indicated in the Schedule above is on a Per Claim basis that Deductibl e
amount applies to all damages sustained by any one person because of:
a. bodily injury; or
b. property damage; or
c. bodily injury and property damage combined as the result of any ona occurrence.
If damages are claimed for care, loss of services or death resulting at any time from bodily
Injury, a separate Deductible amount will be applied to each person making a claim for such
damages.
With respect to property dalT\age; the definition of person includes an organization.
2. Per Occurrence Basis
ENV3110 (0904)
If the Deductible amount indicated In the Schedule above is on a Per Occurrence basts that
Deductible amount applies to all damages because of:
a. bodily injury; or
Page 1 of 2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 55 of 86
b. property damage; or
c. bodily injury and property damage combined as the result of anyone occurrence,
regardless of the number of persons or organizations who sustain damages because of
that occurrence.
C. The terms of this insurance, including those with respect to:
1. Our light and duty to defend the Insured against any claim(s) or sult(s} seeking those damages;
and
2. Your duties in the event of an occurrence, claim or suit,
apply irrespective of the application to the Deductible amount.
D. We may pay any part, or all, of the Deductible amount to effect settlement of any claim or suit and, upon
notification of the action taken, you shall promptly reimburse us for such part of the Deductible amount as
has been paid by us,
All other terms and conditions remain the same.
ENV-31 1 0 (09-04)
Page 2 of2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 56 of 86
Named Insured Endorsemenl Number
Hydro International Holdings, Inc.
Policy Symbol
I. Policy Number I. Policy Period
Effective C a ~ of endorsement
GLW G24151765 001 08/0112010
TO
06/01/2011
Issued 6y (Name of kuurance -Company)
Illinois Union Insurance Company
,
Insert the pdicy number. The remainder of the ilfoonation is to be completed only when this endorsement is Issued subsequert to the preparation of the poIiGY.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NAMED INSURED ENDORSEMENT
SCHEDULE
Eutek Systems, Inc.
HIL Technology, Inc.
(If not entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
SECTION 11- WHO IS AN INSURED is amended to include as a Named Insured the person(s) or
organization(s) shO'Ml in the Schedule above.
ENV3123 (0804) lndudes copyrIghted material of Insurance Services Office, Inc. with Its permission Page 1 of 1
i
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 57 of 86
Insured Endorsement Number
Hydro International Holdings, Inc.
Policy Symbol
I Poley Number" 1 Policy Penod
I:riecli vt: D<:Iie ui Endu(semenl
GLW G24151785 001 08/01 /2010 TO 08/01/2011
Issued By (Name or Insurance Canpany)
Ill inois Union Company
Insert lho policy number. The remainder of the Information Is to be completed onl y when this endorsement is issued subseQuent to the preparation of the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US
This endorsement modifies provided the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
CONTRACTORS POLLUTION LIABILITY COVERAGE PART
SCHEDULE
Name of Person or Qrganl zation:
Any person or organization that Is an owner of real property or personal property on which are
performing operations. or a contractor on whose behalf you are performing operations, and onl y at the
specific written request of such person or organization to you, wherein such request is made prior to
commencement of operations.
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as
applicable to this
The TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US Condition is amended by the
addition of the following:
We waive any right of recovery we may have against the person or organizalion shown in the Schedule above
because of payments we make for injury or damage arising out of your ongoing operations or your work done
under a contract with that person or organization and included in the products-completed operations hazard.
This waiver applies only to the person or organization shown in the Schedule above.
All other terms and conditions remain the same.
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Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 58 of 86
Named In:!jured Endorsement Number
Hydro International Holdings, Inc.
Po!!cy Symbo!
I 001 I 0
Effective Date of ..nent
GLW TO 0810112011
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NAMED INSURED(S) RETROACTIVE DATE ENDORSEMENT
This insurance is amended to include the following named insured(s) and applicable retroactive date(s):
NAMED INSURED(S) RETROACTIVE DA TE(S)
General Contractor's Professional
Liability Pollution Liability
Eutek Systems, Inc. 1012311986 10123/2002 1012312002
Hydro International Holdings, Inc. 10123/1986 07/3012008 0713012008
HIL Technology, Inc. 1012311986 0713012008 0713012008
ENV-3179 (03-05)
Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 59 of 86
FUNGI, MOLD OR MICROBIAL MATTER EXCLUSION
Named Insured . Endorsement Number
Hydro International HOl dings, Inc.
Policy :;;ymbol
I Policy Number I Policy Pertod
Effective Dote or Endorsement
GLW G24151785 001 08/01/2010
to 08/01/2011
IsSued By (Name of Insurance-Company)
Illinois Union Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This insurance does not apply to loss(es), claim(s) or suit(s) arising out of or in anyway related to, in whole or
part, the actual, alleged, or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or
presence of any microbial matter, mold, mildew, bacteria, viruses, spores or fungi or mold condition(s),
regardless of whether any other cause, event, material, or product contributed concurrenHy or in any sequence to
such 10$$ or damage.
This exclusion shall also apply to any loss(es), clatm(s), sult(s), cost(s) or expense(s) arising out of the testing
for, monitoring, cleaning up, remOVing, containing, treating, detoxifying, neutralizing, remediation of, or disposing
of, or in any way responding to or assessing the effects of microbial matter, mold, mildew, bacteria, viruses,
spores or fungi or mold condition(s) by any insured or by any other person or entity.
For the purpose of this endorsement, the following addrtional DEFINITIONS apply to all Coverage Parts:
1. Fungi or fungus means any of numerous eukaryotic organisms of the kingdom Fungi, which lack
chlorophyll and vascular tissue and range in form from a single cell to a body mass of branched
filamentous hyphae that produce specialized fruiting bodies.
2. Microbial matter means fungi , mold, bacteria or viruses which reproduce through the splitting of
cells, the release of spores or by any other means, whether or not such microbial matter is living.
3. Mold means any of the various fungi responsible for the diSintegration of organic or inorganic
matter, or the growth of such fungi;
4. Mold condition means the discharge, dispersal, seepage, migration, growth, release or escape of
microbial matter, mold, mi ldew, bacteria, viruses, spores or fungi into or within any structure on
land, provided such conditions are not naturally occurring in the environment in the amounts and
concentrations discovered. Mold conditions shall Include microbial matter, mold, mildew, bacteria,
viruses, spores or fungi in any structure on land and the atmosphere contained within that
structure.
5. Structure means a roofed and walled bui lding built for permanent use.
All other terms and conditions remain the same.
ENV-3201 (05-08) COPyright @2008 m Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 60 of 86
RELIANCE UPON OTHER CARRIER'S APPLICATION
Named Insured Endorsement Number
Hydro International Holdings, Inc.
Pcey S y m ~
I Po!icy Number I POlicy Period
Effective Date of Endorsement
GLW G24151785 001 08/0112010
to
08101/2011
!
rssllI'!d By (Name of Insurance Company)
Illinois Union Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
It is agreed that the following provision is added to the GENERAL CONDITIONS, Representations section of the
policy:
RELIANCE UPON OTHER CARRIER'S APPLICATION
In the absence of an application from the company providing this insurance, the Insurer has relied upon the
statements, representations, warranties (if any) and information contained in the application referenced below
(induding any malerials submitted therewith and attachments submitted thereto, and, if such application is a
renewal application, all previous policy applications for which this policy is a renewal or succeeds in time, and
any matarials submitted therewith and attachments submitted thereto as being accurate and complete (all
such applications and materials are collectively referred to hereinafter as ' Subject Application'). It is agreed
that the Insured represents to the Insurer that the statements, representations, warranties (if any) and
informati on contained in the Subject Application were accurate on the date thay were so given. The Insured
hereby reaffirms each and every statement, representation and warranty (if any) made in the Subject
Application to the insurance carrier listed below as accurate as of the effective date such statement,
representation and warranty was made as if they were made to the Insurer on such date. All such
statements, representations, warranties (if any) and information shall be deemed to ba material to the
acceptance of the risk or hazard assumed by the Insurer, are the basis of this policy and are incorporated into
and constitute a part of this policy.
TITLE OF APPLICATION: Contractors and Consultants Application
INSUR.ANCE CARRIER: Markel
DATE SIGNED: 07/29/2010
All other terms and conditions remain the same.
ENV3230 (08'()9) Copyright (0 2009 m Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 61 of 86
Named Endorsemetl1 Nurrtler
Hydro International Holdings, Inc.
Poli::y Symbol
I Pclie'J I Pe!le:.'
E!! ..... ivc Do!e of Endor:;cmcr.t
GLW G24151785 001 08/0112010 TO 06/01 /2011
1Si>uel:l By (Name of Insurance Company)
Ill inois Union Insurance Company
Insert tho pcjlcy number. The remainder ofthe informt.liion is to be completed only when this endorsement is issued $I.b$equent to the preparation cI the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ASBESTOS AMENDATORY ENDORSEMENT
This insurance does not apply to bodily injury or property damage at any time arising out of the manufacture
of, mining of, sale of, installation of, or distribution of asbestos products, asbestos fibers or asbestos dust, or to
any obligation of the insured to indemnify any party because of damages arising out of such bodily injury or
property damage at any time as a resu" of the manufacture of, mining of, sate of, installation of, or distribution
of asbestos products, asbestos fibers or asbestos dust.
Furthermore, the Company shall not be obligated to defend any claim or suit against any insured alleging
bodily Injury or property damage resulting from or contributed to, by any and all manufacture of, mining of,
sales of, installation of, or distri bution of asbestos products, asbestos fibers or asbestos dust.
For the purpose ofthis endorsement, bodily injury shall indude disability, disease, occupational disease,
sickness, and shock.
ENVS100 (060.) Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 62 of 86
Named Insured Endorsemenl Number
Hydro International Holdings, Inc.
Policy Symbol
I Policy Number -- I "POlicy Period
Effective Date of Endorsement
GLW G24151785 001 06/01/2010 TO 06/0112011
Issued By (Name d Insutance Company)
Illinois Uni on Insurance Company
Insert the policy number. The rcmtl inder of the information is to be completed only when this endorsement is issued to the preparation 01 the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NUCLEAR HAZARD LIABILITY EXCLUSION
This insurance does not apply to:
A Bodily injury or property damage:
1. With respect to which the Insured under the policy is also an Insured under a nuclear
energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual
Atomic Energy Liability Underwriters, or Nuclear Insurance Association of Canada. or
would be an Insured under any such policy but for its termination upon exhaustion of its
limits of Insurance;
2. Resutting from the hazardous properties of nuclear material and with respect to Which:
(a) Any person or organization is required to maintain financial protection pursuant to
the Atomic Energy Act of 1954, or any law amendatory thereof; or
(b) The Insured is, or had this policy not been issued would be, entitled to indemnity
from the United States of America, or any agency thereof, under any agreement
entered into by the United States of America, or any agency thereof, with any
person or organization.
B. Resulting from the hazardous properties of nuclear material, if:
1. The nuclear material
(aJ Is at any nuclear facility owned by, or operated by or on of the Insured;
or
(bJ Has been discharged or dispersed therefrom;
2. The nuclear material is contained in spent fuel or waste at any time possessed,
handled, used, processed, stored, transported or disposed of by or on behalf of the
Insured; or
3. The bodily Injury or property damage arises out of the furnishing by the Insured of
services, materials, parts or equipment in connection with the planning, construction,
maintenance, operation or use of any nuclear facility, located wHhin the United States of
America. its territories or possessions or Canada.
C. As used in this excl usion:
ENV-5102 (10-04)
1. Hazardous properties include radioactive, toxic, or explosive properties.
2. Nuclear material means source material, special nuclear material, or byproduct
material .
Includes copyrighted material of InlilXsnce Services Office, Inc. wit h its permission Page 1 012
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 63 of 86
ENV-S102 (1()-j)4)
3. Source material, special nuclear material, and byproduct material have the meanings
given them in the Atomic Energy Act of 1954 or in any law amendatory thereof.
4. Spent fuel means any fuel element or fuel component, solid or liquid, which has been
used or exposed to radiation in a nuclear reactor.
5. Waste means any waste material:
(a) Containing byproduct material other than the tailings or wastes produced by the
extraction or concentration of uranium or thorium from any ore processed
primarily for its source material content;
(b) Resulting from the operation by any person or organization of any nuclear facility
Included under the first two paragraphs of the definition of nuclear facility;
6. Nuclear facility means:
(a) Any nuclear reactor;
(b) Any equipment or device designed or used for:
I. Separating the isotopes of uranium or plutonium;
ii. Processing or utilizing spent fuel; or
IIi. Handling, processing or packaging waste;
(c) Any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the Insured at the premises where such equipment or device is
located consists of or contains more than 25 grams of plutonium or uranium 233
or any combination thereof, or more than 250 grams of uranium 235;
(d) Any structure, basin, excavation. premises, or place prepared or used for the
storage or disposal of waste;
(e) The site on which any of the foregoing is located, all operations conducted on
such s ~ e and all premises used for such operations.
7. Nuclear reactor means any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reacUon or to contain a critical mass of fissionable material .
8. Property damage includes all forms of radioactive contamination of property.
Indudes copyrighted malerial of Insurance Services Omce. Inc. with its pefmission Page 2 of 2
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 64 of 86
r Named Insured
! Hydro International Holdings, Inc.
1 001
TO 0810112011
Erdorsernenl Number
I Issued By (Name Cf Insurance COlll>any)
I Illinois Union Insurance Company
Insert the policy nLXnOer. The remainder of the information is to be completed only wncn thi s endorsement is issued subsequent to the preparation of tho policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SERVICE OF SUIT ENDORSEMENT
Information about service of suits upon us Is given below. Service of process of suit against us may be made
upon the following person . or another person we may designate:
Saverio Rocca, Assistant General Counsel
ACE USA Companies
436 Walnut Street WA04K
Philadelphia, PA 19106
The person named above is authorized and directed to accept service of process on our behalf in any action. suit
or proceeding instituted against us. If you request. we will give you a written promise that a general appearance
will be entered on our behalf if a suit is brought.
If you request. we will submit to the jurisdiction of any court of competentjuflsdiction. We will accept the final
decisi on of that court or any Appellate Court in the event of an appeal.
The laws of some jurisdictions of the United States of America require that the Superintendent. Commissioner or
Director of Insurance (or their successor in office) be deSignated as our agent for service of process.
In these jurisdictions. we designate the Director of Insurance as our true and lawful attorney upon whom service
of process on our behalf may be made. We also authorize the Director of Insurance to mail process received on
our behalf to the company person named above.
If you are a resident of Canada, you may also serve suit upon us by serving the government official deSignated
by the law of your province.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY. ALTER. WAIVE OR EXTEND ANY OF THE
TERMS, CONDITIONS, OR LIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT IS ATIACHED
OTHER THAN AS ABOVE STATED.
ENV51 06 (04-06)
Paga 1 0f 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 65 of 86
i Named Insured Endorsement Number
i Hydro International Holdings, Inc.
i
Policy Period Effect!':e Di;:te of Endorsement
I
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
08/01/2010 TO 08/01/2011
Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequenllo the preparation of the fXllicy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EARNED PREMIUM ENDORSEMENT - 25% MINIMUM EARNED
The Minimum Earned Premium due for this policy shall be calculated in accordance with the following:
1. In the event of cancellation of this policy by the first Named Insured the minimum earned premium due if
this policy remains in effect for ninety (90) days or less shall be twenty-five percent (25%) of the amount
entered as advance premium on the Declarations of this policy; and
2. In the event of cancellation of this policy by the first Named Insured after this policy has been in effect for
more than ninety (90) days, the return premium due, if any, shall be computed at a rate equal to ninety
percent (90%) of the pro-rata unearned policy premium, subject, however, to final premium adjustment in
accordance with our rules, rates and the Premium Audit provisions of this policy; and
3. In the event of cancellation of this policy by the Company for reasons other than non-payment of
premium, the earned premium for this policy shall be computed on a pro-rata basis, subject, however, to
final premium adjustment in accordance with our rules, rates and Premium Audit provisions of this policy;
and
4. The following supersedes any provision to the contrary contained in the policy to which this endorsement
is attached:
The premium entered in the Declarations of this policy as advance premium is a provisional premium only
and is subject to adjustment in accordance with our rules, rates and the Premium Audit provisions of this
policy. Premium adjustments effected as a result of premium audits will be done after the policy is no
longer in effect but may be done by the Company while the policy is in effect. Premium audit adjustment
calculations will be made to determine additional premiums only. The first Named Insured agrees that
there will be no downward adjustment of the advance premium resulting from the Premium Audit
provisions of this policy. You agree that we may examine and audit your books and records as they relate
to this policy at any time during the policy period and up to three (3) years afterward.
All other terms and conditions remain the same.
ENV-5519 (09-04) Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 66 of 86
Named Insured Endorsement fIl.lmber
Hydro International Holdings, Inc.
Poli cy Symbol
1 POlicy Numblti' I Policy Period -
--..
Effective Date 01 Endorsement
GLW G24151 785 001 08101/2010 TO 08/01/2011
Issued By (Name of Insurance Company)
Illinois Union Insurance Company
Insert the policy number. The remainder of the informotion is 10 be COI"T'91eted only when thi s endorsement is issued subsequent to the preparation of the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
CONSTRUCTION MANAGEMENT PROFESSIONAL EXCLUSION - GENERAL LIABILITY COVERAGE
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
The following exclusion is added to SECTION 1- COVERAGE A - BODILY INJURY AND PROPERTY DAMAGE
LIABILITY, 2. Exclusions and SECTION I - COVERAGE B - PERSONAL AND ADVERTISING tNJURY
LIABILITY, 2. Exclusions:
Construction Management
The coverage afforded by this policy does not apply to bodily injury, property damage or
personal and advertising injury arising out of:
(1) The preparing, approving, or failure to prepare or approve, maps, shop drawing, opinions,
reports, surveys, field orders, change orders or drawing and specifications by any
architect, engineer or surveyor performing services on a project on winich you serve as
construction manager; or
(2) Inspection, supervision, quality control, architectural or engineering activities down by or
for you on a project on which you serve as construction manager.
This exclusion does not apply to bodily injury or property damage arising out of
construction work or demolition work done by you, your employees, or yoor
subcontractors.
All otiner terms and conditions remain tine same.
ENV-61 00 (08-04) Indudes copYrl!;lhted material of Insurance Services Office, Inc. with Its permission Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 67 of 86
Named Number
Hydro Inlernational Holdings, Inc.
Po!ky Symbol
I 001 I 0
01 5ndor:.omont
GLW TO 0810112011
issued 8y (Name cI Insurance Company)
Illinois Union Insurance Company
the poli cy nLrnber. The remainder of the informlltion is to be completed onl y when this endorsement is issued subsequent to the preparation of the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ENGINEERS, ARCHITECTS AND SURVEYORS PROFESSIONAL EXCLUSION -
GENERAL LIABILITY COVERAGE
This endorsement modifies insuranoe provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
The following exclusion is added to SECTION 1- COVERAGE A - BODILY INJURY AND PROPERTY. DAMAGE
LIABILITY, 2, Exclusions and SECTION I - COVERAGE B - PERSONAL AND ADVERTISING INJURY
LIABILITY, 2, Exclusions:
Engineers, Architects or Surveyors
The coverage afforded by this policy does not apply to bodily injury, property damage or
personal and advertising injury arising out of the rendering of, or failure 10 render, any
professional services by you or your engineer, architect Dr surveyor who is either employed by
you or performing work on your behalf in such capacity.
Professional services include:
(1) The preparing, approving, or failure to prepare or approve maps, shop drawing, opinions,
reports, surveys, field orders, change orders or drawings and specifications; and
(2) Supervisory, inspection, architectural or engineering activities.
All other terms and conditions remain the same.
ENV-6101 (08-04) Indudes copyrighted materi al of Insurance Services Office. Inc. wiUl its permission Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 68 of 86
Named Insured Endorsemt:nl Number
Hydro International Holdings, Inc.
POlicy Symbol
I Policy Numbei
I
Et!'odi'lo Date of Endorsems::!
GLW G24151785 001 TO 0810112011
Issued By (Name of Insurance Company)
illinois Union Insurance Company
Insert the policy nurl1ler. The remaInder of the information Is 10 be almpleted (lilly when lIlis endorsemen1 is aurnequent to the preparation d the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
INSPECTION, APPRAISAL AND SURVEY EXCLUSION - GENERAL LIABILITY COVERAGE
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
The followi ng exclusion is added to SECTION 1- COVERAGE A - BODILY INJURYAND PROPERTY DAMAGE
LIABILITY, 2. Exclusions and SECTION I - COVERAGE B - PERSONAL AND ADVERTISING INJURY
LIABILITY, 2. Exclusions:
Inspection, Appraisal and Survey
The coverage afforded by this policy does not apply to bodily injury, property damage or
personal and advertising Injury for which the Insured may be held liable because of the
rendering or fai lure to render professional services in the performance of any claim, investigation,
adjustmenl, engineering, inspection, appraisal, survey, or audit services.
All other terms and conditions remain the same.
ENV.{;102 (OS04) Includes copyrighled material of Insurance Services Office, Inc. with its permission Page 1 of 1
,
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 69 of 86
Named IOSlJfeQ Endorsement Number
Hydro International Holdings, Inc.
Policy Symbol I Policy Number ._.,- ' j 'POliCY Period Effective Date of Endorsement '
GLW G24151765 001 06/01/2010 TO 06/01/2011
Issued By (Name d Insurance CompanYJ
illinois Union Insurance Company
Insert the poli cy numOCf". The remainder of 1he Informati on is to be complafed only when this is issued subSeQuent to the preparati on of the policy
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
TESTING OR CONSULTING PROFESSIONAL LIABILITY EXCLUSION - GENERAL LIABILITY COVERAGE
This endorsement modifies insurance provided under the foll owing:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
The following exclusion is added to SECTION I COVERAGE A BODILY INJURY AND PROPERTY DAMAGE
LIABILITY, 2. Exclusions and SECTION I COVERAGE B - PERSONAL AND ADVERTISING INJURY
LIABILITY, 2. Exclusions:
Testing or Consulting
The coverage afforded by this pclicy does not apply to bodily injury, property damage or
pensonol and advertising injury arising out of:
(1) An error, omission. defect or deficiency in:
(a) Any test performed; or
(b) Any evaluation, consultation or advice given by or on behalf of any Insured:
(2) The reporti ng of or reli ance upon any such test, evaluation, consultation or advice; or
(3) An error, omission, defect or deficiency in experi mental data or the insured's
interpretation of such data.
All o.ther terms and condi tions remain the same.
ENV6103 (08-04) Includes copyrighled malenal 0' Insurance Services Office. Inc. with ils permi ssion Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 70 of 86
Named Insured Endorsement NLrI'Iber
Hydro International Holdings, Inc.
Policy Symbol
I 001
i DO P'
Effeetlve Date of Cnooi3ement
GLW
. 1 0
TO 0810112011
Issued By (Name or Insurance Company)
Illi nois Union Insuranoe Company
Insert Ihe policy nutrbet. The remellindef of the information Is lo be completed when this endorsement is i ssued subsequent to ttle preparauon Of the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
TOTAL POLLUTION EXCLUSION - GENERAL LIABILITY COVERAGE
This endorsement insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
Exclusions, f. under Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury and Property
Damage liability, is deleted in its enti rety and replaced by the following:
This insurance does not apply to:
f. Pollution
(1 ) Bodily injury or property damage which would nol have occurred In whole or part but
for the actual, alleged or threatened discharge, dispersal , seepage, migration, release or
escape of pollutants at any time.
(2) Any loss, cost or expense arising out of any:
(a) Request, demand, order or statutory or regulatory requirement that any insured
or others test for, monitor, clean up, remove, contain, treat, detoxify or
neutralize, or in any way respond to, or assess the effects of pollutants; or
(b) Claim or suit by or on behalf of a governmental authority for damages because
oftesting for, monitOring, cleaning up, removing, containing, treating, detoxifyi ng
or neutral izing, or in any way responding to, or assessing the effects of,
pollutants.
All other terms and conditions remain the same.
ENV61 04 (08-04) Indudes copyrighted material of Insurance Services OffICe. Inc. with its permissIon Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 71 of 86
Named Insured . Endorsement NLmDer
Hydro International Holdings, Inc.
.--.-
?oIi&y Symbol
I 001
I Policy Period
Effective Date 01 El\docsemeilt
GlW 06101/2010 TO 0610112011
Issued 8y (Name of Insurance Companv)
Illinois Union Insurance Company
Insert the polley number. The rt:meinder of the information is to be c:ompleled only when thi s endorsement is Issued subsequent to the preparation of the policy.
THIS ENDORSEMENT CHANGES THE POUCY. PLEASE READ IT CAREFULLY.
EMPLOYMENT RELATED PRACTICES EXCLUSION
This insurance does not apply to bodily Injury or personal InJury arising out of:
(1) Any refusal to employ; or
(2) Any termination of employment; or
(3) Any coercion, demotion, performance evaluation, reassignment, discipline, defamation,
harassment, humiliation, discriminati on or other employment related practice, policy, act or
omission; or
(4) Consequential bodily injury or personal Injury as a result of (1), (2) or (3) above.
This exclusion applies whether the insured may be held liable as an employer or in any other capacity and to any
obligation to share damages with or to repay someone else who must pay damages because of the bodily injury.
All other terms and conditions remain the same.
ENV-6105 (08-04) Includes copyrightod materiill of Insurance Services Office. Inc. with its permission Page 1 of 1
,
I
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 72 of 86
Named InsLlred Endorsement Number
Hydro Inlemational Holdings, Inc,
Polky Symbd
I Poli cy NlIl1ber I POl iCY PellOd
Ef'feciive Daie oi
GLW G24151785 001 08/0112010 TO 08/01/2011
Issued By (Name of InsLlrance Company)
Illinois Union Insurance Company
THIS ENDORSEMENT CHANGES THE rOUCY, PLEASE READ IT CAREFl' LLY.
DEFINED WORDS AND PHRASES ENDORSEMENT
This endorsement modifies insurance provided under the fol lowing:
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
The fourth paragraph in the preamble of form CG 00 01, COMMERCIAL GENERAL LIABILITY COVERAGE
FORM, is deleted and replaced as follows:
Other words and phrases appearing in quotation marks or in bold have special meaning, Refer to Section V
- Definitions, Words and phrases appearing in bold print in endorsements attached hereto are subject to the
definitions in Section V unless specifically defined within the endorsement.
All other tenns and conditions remain the same,
ENV 61 06 (01-05) page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 73 of 86
Illinois Union Insurance Company
Insurance Company
Hydro International Holdings, Inc.
Policyholder
G24151 785 001
Policy Number
R T Specialty LLC
Broker/Producer
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM INSURANCE COVERAGE
You were notified that under the Terrorism Risk Insurance Act, as amended, that you have the right to purchase
Insurance coverage for losses resulting from acts of terrOrism, as defined In Section 102(1) of the Ad: The term "act
of terrorism" meens any act that is certified by the Secretary of the Treasury--in concurrence with the Secretary of
State, and the Attorney General of the United States--to be an act of terrorism; to be a violent act or an act that is
dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside
the United States in the case of certain air carriers or vessels or the premises of a United States mission; and to
have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United
States or to influence the policy or affect the conduct of the United States Government by coerci on.
YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED FOR LOSSES RESUL liNG FROM CERTIFIED
ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW, HOWEVER, SUCH POLICIES MAY
CONTAIN OTHER EXCLUSIONS WHICH MIGHT AFFECT COVERAGE, SUCH AS AN EXCLUSION FOR
NUCLEAR EVENTS. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY
REIMBURSES 85% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED
DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM FOR
THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF
LOSS THAT MAY BE COVERED BYTHE FEDERAL GOVERNMENT UNDER THE ACT,
YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A
$100 BILLION CAP THAT UMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' LIABIITY
FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH
LOSSES IN ANY ONE CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES
FOR ALL INSURERS EXCEED $100 BILLION, COVERAGE MAY BE REDUCED,
.y.ou elected NOT to purchase terrorism coverage under the Act allhe pri ce indicated. ACCORpINGLY,WE WILL
NOT PROVIDE THIS COVERAGE AND YOU DO NOT OWE THE ADDITIONAL PREMIUM FOR THAT
COVERAGE INDICATED BELOW.
Terrorism coverage described by the Act under your policy was made available to you for
additional premium in the amount of $ 2379 , however you elected to decline such coveraQe.
TRIA1 5c(Ol /0S)
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 74 of 86
EXCLUSION OF CERTIFIED ACTS OF TERRORISM
Nmed Insured Endorsement Number
Hydro International Holdings, Inc.
Poli cy Symbol
I Policy N\ mber I Policy Period
Effective Date or EndorSement
GLW G24151785 001 08/01/2010
to
08/0112011
tSSijElCl BY (Name Of Insurance -company)
Illinois Union Insurance Company
Insert the poliCY number. The remafnder of the InformOition I ~ to bo oomple,ed only when thiS endorsement IS Issued subsequent 10 the preparatIOn of the policy.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
A. The following exclusion is added to all coverage
parts:
This insurance does not apply to:
TERRORISM
Any injury or damage arising, directly or indi-
rectly, out of a certified act of terrorism.
B. The follOWing definitions are added:
1. For the purposes of this endorsement, "any
injury or damage means any injury or damage
covered under this Policy or any Coverage Part
to which this endorsement is applicable, and
includes but is not li mited to bodily Injury,
property damage, personal and advertising
injury, corrective action costs or cleanup
costs as may be defined in any applicable
Coverage Part.
ENV-9950 (01108)
Copyright @ 2008 m.
2. Certified act of terrorism means an act
that is certified by the Secretary of the
Treasury. in concurrence with the Secre-
tary of State and the Attorney General of
the United States, to be an act of terror-
ism pursuant to the federal Terrorism
Risk Insurance Act. The criteria contained
in the Terrorism Risk Insurance Act for a
certified act of terrorism include the fol-
lowing:
a. The act resulted in insured losses in
excess of $5 million in the aggregate,
attributable to all types of insurance
subject to the Terrorism Risk Insur-
ance Act; and
b. The act is a violent act or an act that
is dangerous to human life, property
or infrastructure and is committed by
an indivi dual or individuals as part of
an effort to coerce the civilian popula-
tion of the United States or to influ-
ence the policy or affect the conduct
of the Uniled Slates Government by
coercion,
Page 1 of 1
Includes copyrighted material of Insurance Services Offi co, Inc., with its permission
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 75 of 86
TRADE OR ECONOMIC SANCTIONS ENDORSEMENT
Named insured Endon;:ement Number
Hydro International Holdings, Inc.
PoliCy Symbol
I POlicy Number
I 0
Effective Date 01 Endorsement
GLW G24151785 001
to
08/01/2011
By (Name of Insurance Col'l1lany)
Illinois Union Insurance Company
the policy number. The remainder or the Information Is to be completed when Ihls endorsement is issued subsequent to tho preparation of the poli cy,
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ThiS insurance does not apply to the extent that trade or economic sanctions or other laws or regulations prohibit
us from providing insurance, including, but not limited to, the payment of daims. All other terms and conditions of
policy remain unchanged.
Authorized Agent
ALL21101 ( 11/06) Ptd. in U.S.A. Page I of1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 76 of 86
Claims Directory
Umbrella/Excess CasualtylEnvironmental
Claims or Loss Notices related to this policy should be reported to the following:
Claim Office Email and Fax Location
ACE First Notices Email: P.O. Box5119
Westchester WSGUMB-LTECLAlMS@ACEGROUP.COM Scranton, P A
Claims 18505-0549
First Notices Fax:
215.640.5055 or
1.877.518.3494
General Correspondence Fax:
1-866-635-5688
MA-608255e (08/09)
Page 1 of 1
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 77 of 86
I Named Insured
, Hydro International Holdings, Inc.
Issued By (Name of Insurance Company)
Ill inois Union Insurance Company
SIGNATURE ENDORSEMENT
I
Policy Period
08/0112010 08/01/2011
I Endorsement Number
I
I Effective Date
Inser1lhe poley number. Tile remainder of tho informaiicn is 10 be completed only when this endorsement is issued subsequent to the pl'eparaiion of the paiey,
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 counte",igned by our
authorized representative .
. ,
ILLINOIS UNION INSURANCE COMPANY
525 W. Monroe Street, Suite 400, Chicago, Illinois 60661
D. MULLIGAN, S,mtary
WESTCHESTER SURPLUS LINES INSURANCE COMPANY
500 Colonial Center Parkway, Suite 200, Roswen, GA 30076
, D. MULLIGAN, S.m,,,y
DENNIS A. CROSBY, JR . President
Authorized Agent
(2105) ptd. m U.SA
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 78 of 86
ILLINOIS UNION
INSURANCE COMPANY
525 West Monroe Street. Suite 400
Chicago. IL 60661
POLICY NO. G24151785 001
NOTICE
NAME OF INSURED: Hydro International Holdings, Inc.
ADDRESS: 2925 NW Aloclek Drive
Hillsboro, OR 97124
We are pleased to enclose your policy for this account.
Please be advised that by binding this risk wnh the above referenced Surplus Lines Insurance Company, you agree
that as the Surplus Lines Broker responsible for the placement of this insurance policy, it is your obligation to comply
wlth all States Surplus Lines Laws including completion of any declarations/affidavits that must be filed as well as
payment of any and all Surplus Lines taxes that must be the remitted to the State(s). We will look to you for
indemnification if controlling Surplus Lines Laws are violated by you as the Surplus Lines broker responsible for the
placement.
The Surplus Lines Broker further confirms that this risk has been declined by three admitted carriers not including
any insurer affiliated with the Surplus Lines Insurance Company.
Thank you for this placement and your regulatory compliance.
Date: 8/1312010
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 79 of 86
A( . Westchester Specialty G ' lp
Revised 1- Binder - Policy No. G24151785 001
Date: July 30. 2010
Producer:
R T SPECIALTY LLC
200 SOUTH WACKER DRIVE
CHICAGO, IL 60606
Attention:
Telephone:
Email:
Sarah Lin
31 26216000
Sarah Lin
Insured:
Hydro International Holdings, Inc
2925 NW. Aloclek Drive
Hillsboro, OR 97124
The following binder outlines our coverage for the above referenced account. Please review all coverage terms and
conditions as they may differ from the submission. These terms and conditions may be modified upon review of the
requested additional information.
Company:
Coverage:
Limits Of Liability:
Deductible:
Premium:
Rate:
Illinois Union Insurance Company - AM Best Rating A+ XV
Commercial General Liability Coverage Form - Claims Made
Contractor's Pollution Liabi lity Endorsement - Claims Made
Professional Liability Endorsement - Claims Made
$2,000,000
$2, 000,000
$2.000,000
$2.000,000
$50,000
$5,000
$2,000,000
$2,000,000
S10,000
$10,000
$1 0,000
$47.571
Each Occurrence
General Aggregate
Products-Completed Operations Aggregate
Personal and Advertising Injury
Damage to Premises Rented to You
Medical Payments
Contractor's Pollution Liability - Each Pollution Condition
Professional Liability - Each Claim
General Liability - Each Occurrence
Contractor's Poll ution Liability - Each Pollution Condition
Professional Liability - Each Claim
.... ::ExposureBasis: ............. _ .. _
Flat 1 Not Auditable
$19,500,000
Commission:
Policy Term:
Retroactive Dates:
20%
08/01/2010 - 08/01/2011
Commercial General Liabil ity Coverage Form - See Endorsement
Contractor's Pollution Liability Endorsement - See Endorsement
Professional Liability Endorsement - See Endorsement
Page 1 of4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 80 of 86
Insurance Company Forms:
CG 00 02 (10-01) - Commercial General Liability Coverage Form
ENV-ll04 (06-06) - Contractors Pollution Liability Endorsement - Claims Made Form
ENV-ll05 (06-06) - Professional Liability Endorsement
ENV-3100 (08-04) - Additional Insured Endorsement
ENV-3101 (OB-04) - Additional Insured Endorsement - Primary and Non-Contributory
ENV-3103 (OB-04) - All Known or Reported Incidents Exclusion
ENV-3107 (09-04) - Common Policy Conditions
ENV-3110 (09-04) - Deductible Liability Insurance Endorsement
ENV-3123 (08-04) - Named Insured Endorsement
ENV-3143 (03-05) - Waiver of Transfer of Rights of Recovery Against Others to Us
ENV-3179 (03-05) - Named Insured(s) Retroactive Date Endorsement
ENV-3201 (05-08) - Fungi, Mold, or Microbial Matter Exclusion
ENV-3230 (OB/09) - Reliance Upon Other Carriers Application
ENV-5100 (OB-04) - Asbestos Amendatory Endorsement
ENV-5102 (10-04) - Nuclear Hazard Liability Exclusion
ENV-5106 (04-06) - Service of Suit
ENV-5519 (09-04) - Earned Premium Endorsement - 25% Minimum Earned
ENV-6100 (OB-04) - Construction Management Professional Exclusion - General Liability Coverage
ENV-6101 (08-04) - Engineers, Architects and Surveyors Professional Exclusion - General Liability
Coverage
ENV-6102 (OB-04) -Inspection, Appraisal and Survey Exclusion _ General Liability Coverage
ENV-6103 (08-04) - Testing or Consulting Professional Liability Exclusion - General Liability Coverage
ENV-6104 (08-04) - Total Pollution Exclusion - General Liability Coverage
ENV-6105 (08-04) - Employment Related Practices Exclusion
ENV-6106 (01-05) - Defined Words and Phrases Endorsement
TRIA15c (01-0B) - Policyholders Disclosure Notice of Terrorism Insurance Coverage
ENV-9950 (01-08) - Exclusion of Certified Acts of Terrorism
ALL-21101 (11-06) - Trade or Economic Sanctions Endorsement
Endorsement Terms and Conditions:
Additional Insured Endorsement - Any person or organization that is an owner of real property or
personal property on which you are performing operations, or a contractor on whose behalf you are
performing operations, and only at the specific written request of such person or organization to you,
wherein such request is made prior to commencement of operations,
Additional Insured Endorsement - Primary and Non-Contributory - Any person or organization that is an
owner of real property or personal property on which you are performing operations, or a contractor on
whose behalf you are performing operations, and only at the specific written request of such person or
organization to you, wherein such request is made prior to oommencement of operations.
Named Insured Endorsement - Eutek Systems, Inc
HIL Technology Inc.
Waiver of Transfer of Rights of Recovery Against Others to Us - Any person or organization that is an
owner of real property or personal property on which you are performing operations, or a contractor on
whose behalf you are performing operations, and only at the specific written request of such person or
organization to you, wherein such request is made prior to commencement of operations.
Page 20f4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 81 of 86
Named Insured(s) Retroactive Date Endorsement - Eutek Systems, Inc.- GUI0123/19B6 CPL-
10/2312002 PL -10/23/2002
Hydro International Holdings- GL 10/23/1986 CPL-7/30/2008 PL-7/30/2008
HIL Technology Inc.- GL-iOi23i1986 CPL-7i30/2008 PL-7/30i2008
Reliance Upon Other Carriers Application - Carrier: Markel
Title: Contractors and Consultants Application
Date Signed: 07/29/2010
The bound coverage Is subject to the following information being received within thirty (30) days:
1. 2009 balance sheet. "'10 days after Binding'"
2. Copy of the expiring dec page showing retroactive daters). "'10 days after Binding'"
Additional Terms and Conditions:
1. The producer shall be responsible for all applicable surplus lines filings and taxes.
2. Premium is due thirty (30) days from Ihe effective date of coverage.
3. The proposed coverage shall be 25% minimum earned at inception.
Please advise your client that Westchester Specialty Insurance Services, Inc. (WSIS) is offering this quote as
representative of its affiliated surplus lines insurance company, Illinois Union Insurance Company. WSIS is not
acting on behalf of your client and does not seek placements in other surplus lines markets.
Please be advised that we do not review Certificates of Insurance issued by you, or by any party, relating to this policy of
insurance either for content or accuracy. Accordingly, we request that you do not provide copies of certificates to us for
review or for our records. Authority is granted to you for the limited purpose of issuing unmodified ACORD Certificates
(ACORD 25-5). It is your responsibility to see that any Certificate provides an accurate representetion of the coverage
form and endorsements applicable to this policy at the time the Certificate is issued. Any modification of the approved
ACORD forms specifically set forth above, or the issuance of a non-approved Certificate of Insurance (ACORD or
other) is prohibited. Certificates of Insurance may only be issued as a matter of information. You have no authority by
virtue of a Certificate or otherwise, to amend, extend or otherwise alter coverage afforded under this policy. Certificates of
Insurance are never recognized as endorsements or polley change requests. You must submit a separate written request
if an endorsement or policy change (including but not limited to adding additional insureds or loss payees and/or alteration
of notice requirements for cancellation) is requested. In the event a policy change is requested, the underwriter will advise
if the request is acceptable to the Company.
Should you have any questions, please feel free to contact me at 312-775-7976 or michael.klima@acegroup.com.
Sincerely,
Michael Klima, Environmental Underwriter, ACE Westchester Specialty Group
Page 3 of4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 82 of 86
Hydro International Holdings, Inc
Policyholder
G24151785 001
Policy Number
R T SPECIAL TV LLC
Broker/Producer
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM INSURANCE COVERAGE
You were notified that under the Terrorism Risk Insurance Act, as amended, that you have the right to purchase
insurance coverage for losses resulting from acts of terrorism, as defined in Section 102(1) of the Ac1: The term "act
of terrorism" means any act that is certified by the Secretary of the Treasury---in concurrence with the Secretary of
State, and the Attomey General of the United States---to be an act of terrorism; to be a violent act or an act that is
dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside
the United States in the case of certain air carriers or vessels or the premises of a United States mission; and to
have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United
States or to influence the policy or affect the conduct of the United States Government by coercion.
YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED FOR LOSSES RESULTING FROM CERTIFIED
ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, SUCH POLICIES MAY
CONTAIN OTHER EXCLUSIONS WHICH MIGHT AFFECT COVERAGE, SUCH AS AN EXCLUSION FOR
NUCLEAR EVENTS. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY
REIMBURSES 85% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED
DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM FOR
THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF
LOSS THAT MAY BE COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.
YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A
$100 BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' L1ABIITY
FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH
LOSSES IN ANY ONE CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES
FOR ALL INSURERS EXCEED $100 BILLION, COVERAGE MAYBE REDUCED,
You elected NOT to purchase terrorism coverage under the Act at the price indicated. ACCORDINGLY, WE WILL
NOT PROVIDE THIS COVERAGE AND YOU DO NOT OWE THE ADDITIONAL PREMIUM FOR THAT
COVERAGE INDICATED BELOW.
Terrorism coverage described by the Act under your policy was made available to you for additional premium in the
amount of $2,379, however au elected to decline such CDvera e.
TRIA 15c (01/08)
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 83 of 86
AC - Westchester Specialty Gr Ip
Binder - Poi icy No. G24151i85 001
Date: July 30,2010
Producer: Insured:
R T SPECIALTY LLC
200 SOUTH WACKER DRIVE
CHICAGO, IL 60606
Eutek Systems, Inc.
2925 NW. Alcidek Drive
Hillsboro, OR 97124
Attention:
Telephone:
Email:
Sarah Lin
3126216000
Sarah Lin
.'
The following binder outli nes our coverage for the above referenced account. Please review all coverage terms and
conditions as they may differ from the sUbmission. These terms and conditions may be modified upon review of the
requested additional information.
Company:
Coverage:
Limits Of Liability:
Deductible:
Premium:
Rate:
.-Exposure Basis:
- --Commission: - .
Policy Term:
Retroactive Dates:
Illinois Union Insurance Company - AM Best Rating A+ XV
Commercial General Liabi lity Coverage Form - Claims Made
Contractors Pollution Liability Endorsement - Claims Made
Professional Liability Endorsement - Claims Made
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$50,000
$5,000
$2,000,000
$2,000,000
$10,000
$10,000
$10,000
$47,571
Each Occurrence
General Aggregate
Products-Completed Operations Aggregate
Personal and Advertising Injury
Damage to Premises Rented to You
Medical Payments
Poll ution Liability - Each Pollution Condition
Professional liability - Each Claim
General Liability - Each Occurrence
Contractor's Pollution Liability - Each Pollution Condition
Professional Liabi lity - Each Claim
Flat 1 Not Auditable
$19,500,000
20% . ......... .
08101/2010 - 08/01 12011
Commercial General Liability Coverage Form - See Endorsement
Contractor's Pol lution Liability Endorsement - See Endorsement
Professional Liability Endorsement - See Endorsement
Page 1 of 4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 84 of 86
Insurance Company Forms:
CG 00 02 (10-01) - Commercial General Liability Coverage Form
ENV-ll04 (06-06) - Contractors Pollution Liability Endorsement - Claims Made Form
ENV-ll05 (06-06) - Professional Liability Endorsement
E
II.I\f 'lotnn 'OS 04) A ....... i+i"'''' ... ' Insured Endo ..
I'IV-...... VV\ - - v .... ... '' '''''''"'''''''''''
ENV-3101 (08-04) - Additional Insured Endorsement - Primary and Non-Contributory
ENV-3103 (08-04) - All Known or Reported Incidents Exclusion
ENV-3107 (09-04) - Common Policy Conditions
ENV-3110 (09-04) - Deductible Liability Insurance Endorsement
ENV-3123 (08-04) - Named Insured Endorsement
ENV-3143 (03-05) - Waiver of Transfer of Rights of Recovery Against Others to Us
ENV-3179 (03-05) - Named Insured(s) Retroactive Date Endorsement
ENV-3201 (05-08) - Fungi, Mold, or Microbial Matter Exclusion
ENV-3230 (08/09) - Reliance Upon Other Carriers Application
ENV-5100 (08-04) - Asbestos Amendatory Endorsement
ENV-5102 (10-04) - Nuclear Hazard Liability Exclusion
ENV-5106 (04-06) - Service of Suit
ENV-5519 (09-04) - Earned Premium Endorsement - 25% Minimum Eamed
ENV-6100 (08-04) - Construction Management Professional Exclusion - General Liability Coverage
ENV-6101 (08-04) - Engineers, Architects and Surveyors Professional Exclusion - General Liability
Coverage
ENV-6102 (08-04) - InspecDon, Appraisal and Survey Exclusion - General Liability Coverage
ENV-6103 (08-04) - Testing or Consulting Professional Liability Exclusion - General Liability Coverage
ENV-6104 (08-04) - Total Poll ution Exclusion - General Liability Coverage
ENV-6105 (08-04) - Employment Related Practices Exclusion
ENV-6106 (01-05) - Defined Words and Phrases Endorsement
TRIA15c (01-08) - Policyholders Disclosure Notice of Terrorism Insurance Coverage
ENV-9950 (01-08) - Exclusion of Certified Acts of Terrorism
ALL-21101 (11-06) - Trade or Economic Sanctions Endorsement
Endorsement Terms and Conditions:
Additional Insured Endorsement - Any person or organization that is an owner of real property or
personal property on which you are performing operations, or a contractor on whose behalf you are
performing operations, and only at the specific written request of such person or organization to you,
wherein such request is made prior to commencement of operations.
Additional Insured Endorsement - Primary and Non-Contributory - Any person or organizatiop that is an
owner of real property or personal property on which you are perfonming operations, or a contractor on
whose behalf you are performing operations, and only at the specific written request of such person or
organization to you, wherein such request is made prior to commencement of operations.
Endorsement"Hydro IntemationalHoldlngs
HIL Technology Inc.
Waiver of Transfer of Rights of Recovery Against Others to Us - Any person or organization that is an
owner of real property or personal property on which you are performing operations, or a contractor on
whose behalf you are performing operations, and only at the specific written request of such person or
organization to you, wherein such request is made prior to commencement of operations.
Page 2 of4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 85 of 86
Named Insured(s) Retroactive Date Endorsement - Eutek Systems, Inc.- GU10/23/1986 CPL-
10/23/2002 PL-10/23/2002
Hydro International Holdings- GL 10/23/1986 CPL-7/30/2008 PL-7/3012008
HIL Technology Ino. - GL-10!23!1986CPL-7/30!20D8 PL-7/30!2008
Reliance Upon Other Carriers Application - Carrier: Markel
Title: Contraclors and Consuttants Application
Date Signed: 07/2912010
The bound coverage is subject to the following Information being received within thirty (30) days:
1. 2009 balance sheet. "'10 days after Binding'"
2. Copy olthe expiring dec page showing retroactive date(s). " '10 days after Binding'"
Additional Terms and Conditions;
1. The producer shall be responsible for all applicable surplus lines filings and taxes.
2. Premium is due thirty (30) days from the effective date of coverage.
3. The proposed coverage shall be 25% minimum earned at Inception.
Please advise your client that Westchester Speciatty Insurance Services, Inc. (WSIS) is offering this quote as
representative of its affiliated surplus lines insurance company, Illinois Union Insurance Company. WSIS is nol
acting on behalf of your client and does not seek placements in olher surplus lines markets.
Please be advised that we do not review Certificates of Insurance issued by you, or by any party, relating to this policy of
insurance either for content or accuracy. Accordingly, we request that you do not provide copies of certificates to us for
review or for our records. Authority is granted to you for the limited purpose of issuing unmodified ACORD Certificates
(ACORD 25-5), It is your responsibility to see that any Certificale provides an accurate representation of the coverage
form and endorsements applicable to this policy at the time the Certificate is issued. Any modification of the approved
ACORD forms specifically set forth above, or the issuance of a non-approved Certificate of Insurance (ACORD or
other) is prohibited. Certifli.:ates of Insurance may only be issued as a matter of information. You have no authority by
virtue of a Certficate or otherwise, to amend, extend or otherwise alter coverage afforded under this policy. Certificates of
Insurance are never recognized as endorsements or policy change requests. You must submit a separate wrilten requesl
if an endorsement or policy change (including but not limited to adding additional insureds or loss payees andl or alteralion
of notice requiremenls for cancellation) is requested. In the event a policy change is requested, the underwriler will advise
if the request is acceptable to the Company.
Should you have any questions, please feel free to contact me al 312-775-7976 or michael.klima@acegroup.com.
Sincerely,
Michael Klima, Environmental Underwriter, ACE Westchester Specialty Group
, .
Page 3 0f4
Case 3:12-cv-00511-RDM Document 1-2 Filed 03/20/12 Page 86 of 86
Illinois Union Insurance Company
Insurance Company
Eutek Systems, Inc.
Policyholder
G24151785 001
Policy Number
R T SPECIALTY LLC
Broker/Producer
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM INSURANCE COVERAGE
You were notified that under the Terrorism Risk Insurance Act, as amended, that you have the right to purchase
insurance coverage for losses from acts of terrorism, as defined in Section 102(1) of the Act The term "act
of terrorism" means any act that is certified by the Secretary of the Treasury---in concurrence with the Secretary of
State, and the Attorney General of the United States-to be an act of terrorism; to be a violent act or an act that is
dangerous 10 human life, property, or infrastructure; to have resulted in damage within the United States, or outside
the United States in the case of certain air carriers or vessels or the premises of a United States mission; and to
have committed by an individual or individuals as part of an effort to coerce the civilian population of the United
S.tates o( to influence the policy or affect the conduct of the United States Government by coercion.
YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED FOR LOSSES RESULTING FROM CERTIFIED
ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, SUCH POLICIES MAY
CONTAIN OTHER EXCLUSIONS WHICH MIGHT AFFECT COVERAGE, SUCH AS AN EXCLUSION FOR
NUCLEAR EVENTS. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY
REIMBURSES 85% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED
DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM FOR
THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF
LOSS THAT MAY BE COVERED BYTHE FEDERAL GOVERNMENT UNDER THE ACT.
YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT,AS AMENDED, CONTAINS A
$100 BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' LlABIiTY
FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM. WHEN THE AMOUNT OF SUCH
LOSSES IN ANY ONE CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES
=-':::::::::::::.:fORALLJNSURERS EXC.EED$100 BILLlON,CO\,lERAG.EMAY BEBI=.DUJ:::E.D ........
You elected NOT to purchase terrorism coverage under the Act at the price indicated. ACCORD.INGLY, WE WILL
NOT PROVIDE THIS COVERAGE AND YOU DO NOT OWE THE ADDITIONAL PREMIUM FOR THAT
COVERAGE INDICATED BELOW.
Terrorism coverage described by the Act under your policy was made available to you for addition;!1 premium in the
amount of $2,379, however au elected to decline such covera e.
TRIA 15<0 (01108)
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 1 of 10
EXHIBITB
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 2 of 10
COMMONWEALTH OF PENNSYLVANlA
COURT OF COMMON PLEAS
DISTRICI' 45
SEWER AUTHORlTY OF THE CITY
OF SCRANTON.

Plaintiff,
v.

FARCOR, INC.

Case No. _____ _
Serve on:

Fubcor, Inc.
1513 Monroe Ave.
ScrantOll, P A 18509

Defendant

and

HYDRO INlllRNATIONAL, PT.C,
HIL TECHNOLOGY, INC., amI
EUTEK, INC.


Serve on:
Agent

John L. Carpenter
100 Middlo Sireet
P.O. Box 9729
Portland, Maine 04 104 5029

CIVIL ACTION LAW
Defendants.

COMPLAINT

The Plaintiff, the Sewer Authority of the City of Scranton, by and thl'Ough its
attorneys, for its Complaint against the Defendants, Fabeol', r nc,. Hydl'O International,
PLC, HIL Technology, Inc., and Eutek, Inc states as follows.

Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 3 of 10
P A R T l F A ~
1. The PJaintiff, the Sewer Authority of the City of Scranton (the
"Authority',. is /;I municipal authority created under the Pennsylvania Municipal
Authorities Act, 53 Pa. C,S.A. 5601-23, and located in tbe City of Scranton Hnd
r .acXawanna County, Pennsylvania.
2. Pahcar, Inc. is 11 corporation organized in and authorized to conduct
business under 1he Jaws of til e C..ommonwealth ofPClUlSylvanil1. Fabcol' is engaged ill the
b\lSiuess OfPfoviding constl'llction services os a general contractor in PerUlsylvania.
including bil l not limited to Lackawanna COlmty. Defendant Fabcor has in fuet rendenxl
::HI\;h services in Lackaw81ula County and with respect to the subjcclmntter of this action.
According to Pennsylvania' s Department of State, Fabcor's principal corporate office is
locnted at 151:l Monroe Avenue, Scranton, PeJUlsyiv81lia 18509, and its Resident Agcnt
address is identi fi ed as the same.
3. Hydro [ntcrnational, PLC, R. UK corporation, HIL Tcclmology, Inc. 8tld
Eulek, Inc, believed to be Maine corporalions Gointly "Hydro Intcmational'?, are on
information And belief corporations authorized to conduct busine.c;s, lmder the laws oflhe
Commonwealth ofP\illl1$ylvania, and are engaged in the business of providing
wastewater treatment equipment in Pennsylvania. Defendants Hydro International have
in fact. rendered llelviees in Lackawanna County tlnd with respect to the subject matter of
this action. According to Maine's Depnrtment of lne Secretary of State, the
Clerk/Registered Agent for HIL Technology, Tnc. is John L. Carpenter, 100 Middle Street,
P.O. Box9729, POltland, Maine 04104 5029, and on information and belief its principal
2
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 4 of 10
u.s. office is located at 94 Hutchins Drive, PortJand
J
ME 04102. On fut1het infoJ1uation
and belief, the ClerklRcgistered Agent and principal U.S. office for Hydro International,
PLC and Eutek. Jnc. are the same.
JURISDICTION ANn VENUE
4. TIle Court of ConunoJt Pleas has subject mutter jmlsdiction oveJ'thesc
claims pursuant to 42 Pa. COilS. Stat. 931(a).
S. Defendant Fabcor, Inc. is subject to personal jurisdiction in this
Commonwealth pursuant to 42 Fa. Cons. Stat. 5301 (a)(2)(i), And Defendants Hydro
Intemational are subject to personal jW'isdiction in (his Comlllonwealth pursuant to 42 Pa.
Cons. Sial. 5322(a){l), (2).
6. The Court ofComrnon PIcas District 4S is the appropriate venue for this
claim to be heru'd. See 231 Pa, Code 2179(.) (Rulcs of Civil Procedure),
FACTUAL BACKGRQUND
7. On or about November 21. 2007, Pabcar and the Authority executed a
Pbase II Capital Improvements Contract ("Contract 10") whereby Fabcor agrecd to be
the general contractor on thc Authority's wnstewuler treatment facility Pbase II
Improvements. The original base Fabcor Contract 1 G price was Hl)pl'Oxilllutely
$3,181,515.
8. Fabcor began cOllstl'Uct ioll under Contract lOin or about Novt:mber,
2007,
3
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 5 of 10
9, Along with other constnlctioll and equipment, Contract IG required that
Fabcor provide and instull cOltain new mechanical and electrical equipment for the
removal of grit from raw wastewuters. Grit includes :sand, rocks and similar relatively
heavy and settleable solid materials.
10. Among othcr equipment, Fabcor supplied, installed and provided other
gencntl construction services in regard to two (2) "Grit Snail" units for the removlIl of
grit. The Grit Snail units wcre mAf11lfactured and supplied by Hydro Intcrnational tlu'ough
their RUlek operating unit.
II. Fabcor's procurement of and contracting for the Gxit Snail units were
solely for the benefit of the Authority.
12, The specifications for this equipment, provided by the Authority in
conj\1l1ction with Contract 10, required thut (he grit equipmenl provided and installed by
Fal>cor was to be complete and operational to enSlU:e coordination and compatibility of
equipment. Each of the two Grit Snail or other approve;:d units was Iequil'cd to be c(lpable
of processing a minimuJIl oftlu-cc (3) cubic yards per hour of grit.
13. On illfonnation and belief, Fabcor supplied and installed two (2) Grit Snail
units that both Falx::or and Hydro International representcd to conform to the Authority's
:>pecifications.
14. Execution of Contract 10 by Fabc01" occlln'cd from approximately
November, 2007 to the second half of2009. During Summer, 2009 start lIl) of the Grit
Snails and othol' wastewater treatment equil)ment and facilities \Uldel' Contract 1 G
occml'ed.
4
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 6 of 10
15. The Grit Snail equipOlent has not functioned in a satisfactory manner or in
conformance wi th the specifications. Not by way of limitation of the difficulties thaI the
Authori ty hall experienced with the Grit the unils have 1I0t been able to manage
and I'cmovc from lhe other porlions of the wastewater treatment system the required
amounts of grit. The Grit Snail units have fai led at grit load l'ates below the specified
thl'ce cubic yard per hour unit rates, This failure has required slibstantial amounts of
manual labor to keep the Grit Snails opel'8ting to avoid the failure of other.
downslrerun elements of the wastewater treatment process,
16, Components of the Grit Snails have also experi enced excessive weal',
requiri ng repair amI rcphtecmellt of such components by tIle Authority at a frcqncncy fll r
in excess of what is normal for wastewater treatment cquipmcnt of this nature.
17, The failures by the Defendants to supply wastewatel' treatment equipment
consistent with thc specifications have the Authority, Not by way of Jimitation,
the failure ofthe units to manage the required volumes of grit hfls required thc
expendHure of fWlds. has prevented the Authority from accepting and treating volumes of
wastewater which it is required to accept and trcat under federal and PelIDsylvania law,
and threatens the long term viability of the wustewater processes,
18. The Authority has fm'ther incuned substantial costs in employing
engineering consultants to advise it on lhe cm1'cction of the grit remuvttl problems; and
the Authority will incur additional stich costs in designing llnd conshucti ng chnnges and
implementing ft conective action program for these and associ/tied facilit ies,
19, The Authority is subject to civil penalties for any violation of its
Pennsylvania Department of Ellvironmental Protection ("DEP") issued wastewater
5
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 7 of 10
discharge permit, at the instance ofDEP.lhe U.S. Environm.ental Protection Agcncy or
third parties. nnd Hydro Intcmational are legally responsible for these damRges
stated in paragrflphs 15 thl'Ough 19 and othelwise herein us they relate to inadequate glit
facility vcrfonnancc.
20. The ad damnum for compensatory damages stated in Counts One Ilnd Two
hercin is the Authority's bcst current eSlimate of its damagcs, including estimated costs
for engineering and construction included within a corrective action program. However,
additional engineering work will be required to confitm 01' refute the estimated costs. If
more refined engineel'ing work estimates higher cosls, tite Authority will move to amend
the Complaint to reflect any slich higher damages.
COUNT I
BREACH OF CONTRACT BY FABCOR, INC.
21. The Authority asserts and alleges each of the allegations contained in
Paragraphs 1 through 20 us if fully set fOl1h herein and fmihcl' states 8S follows.
22. Controot 1 G was a valid contract that existed between the Authority and
Fabcor.
23. Dy its Contract 10 agreement widl the Authority, Fabcor owed the
Authority a contractual obligation to provide construction and consistent with
the specifications.
24. Fabcor breached a duty to the Authority imposed by the contract betwccn
Fabcor and the Authority by failing to provide construction and equipmcnt consistent
with the spccificntions.
6
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 8 of 10
25. The Authority neecssnrily relied upon the superior professional knowledge
and technical expertise ofFflbcor to supply equipment pursuant to the specifications and
acceptable for service ot the Authority's wostewater treatment racility.
26. As a direct, proximate and fOlesecabJe result ofFabcor's breach of
contract, the Authority has incurred substantial additional costs and expcnses including,
but not limited to, increased costs of operation, costs 10 remedy. address, or repair defects
resUlting from the breach ofcontntci. and the Authority is subject to monetary penalties
imposed for any noncompliance with its StateIFedcral wastewater discharge pe.rmit
andlor for unpermitted sewer overflows which may occur.
wnEREFORE, the SCWCl' Authority of the City of Scranton demandsjudgment
against rabcor for compensatory damages in the amount of$i.OOO.OOO together witb its
cost!>, reasonable attorney's fees, and aIL other such remedies ns muy be necessnry to do
justice in this matter.
COUNT II
lJREACH OF CONTRACT BY HYDRO INTERNATIONAL, PLC,
HIL TECHNOLOGY, INC. and EUTEK, INC.
27. The Authority assel1s and alleges each afthe al1egatiolls contained in
Paragraphs'l thxollgh 26 as if fuHy set faith herein and fmiher states as follows.
28, A valid contract existed between Fabeor and Hydro JnlemationaJ, of
which the Authorily was the sole intended bcnefi ciru:y.
7
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 9 of 10
29. By the contract between ]labcor and Hydro ft'!ternational, Hydro
International owed the Authority the contractual duty to provide equipment that would
perform as required by the specifications.
30. Hydro Intemational brCl'lched contractual ohligation!! made for the sole
benefit of the Authority by failing to provide equipment that would pcrfOlm (IS required
by the specifications.
31. The A\lUlOrity necessarily retied upon the superior professional knowledge
and teclmical expcJ1iso of Hydro Inlemational to supply equipment pursuant to the
specifications and to ensure that such equipment would be acceptable for sClvice at the
Authority's wastewater treutment f{lcjJity.
32. As R direct, pl'oximate and foreseeable result of Hydro International's
breach of contract. the Authority has incurrcd substantial additional costs IUld expenscs
including, b\lt not limited to, incl'eased costs of operation, costs to remedy, address, or
defects fl"OJIllhc breach of contract, and the Authority may be subject to
motlctary penalties imposed for any noncompliance with its StatelFederal-issued
wnstcwater discharge permit anel/or for any unpcrmitted sewer overnows.
WIIBREFOltE. thc Scwcr Authority of the City ofScl'8nton demands judgment
against Hydro Intel'natiol1al for compensatory damages in the amount of$J ,000,000
together with its costs,rcasonable attorney's fee.'>, and all other such rcmedies as may be
necessary to do justice in this maUer.
8
Case 3:12-cv-00511-RDM Document 1-3 Filed 03/20/12 Page 10 of 10
.tZb--
- ---------:--
Jeffi:cy BRIardl. Esq.
PA BarNo, 71826
Bclardi Law Offices
410 Spruce Street. 4th FloO!'
Scranton. PA 18503
5703424555
jeff@belardilaw.com

PA Rar No, 75574
Aq\laLaw I
J
LC
6 South Fifth Street
RlclmlOnd. Virginia 23219
8047169021
lisn@aqualaw.com
9
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 1 of 13
EXHIBITC
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 2 of 13
m.
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specialty group
July 29, 2011
Via U.S. ?viail and E-Mail: bharrel l@eut ek,com
Sri:m Harrell
Hydro hlternational Holdi ngs, Inc.
2925 N.W. Aloclek Drive, Suite]4O
Hillsboro OR 97124
RE: JY11J0342815
ACE USA
ACE. Westchester Claims
PO Box 5119
Scranton. PA 18505
Stephen Kamoroff
AssIstallt VlOc PreSJd()1I1
678.795.4004 tel
866.635.56881ill

www.ace-ina.oom
OUR FILE #
OUR INSUREDS: HYDRO INTERNA1l0NAL HOLDINGS, INC., EUTEK SYSTEMS, INC.
AND H1L TECHNOLOGY, INC.
PLAINTIFF: SEWER AUTHORITY OF HIE CITY OF SCRANI"ON
Dear Mr. HatTell:
On behalf of Illinois Union Insurance Company ("!LV"), the envirorunental generalliabiJity insurer of Hydro
International Holdings, Inc. , Eutek Systems, Inc. and HIT.... Technology, Inc. (coll ectively, "Hydro'1. this
acknowledges receipt, on July 12,2011, of the Civil Action entitlc:.-d Sewer Authority of the City ofScrantoll
(Plaintiff) v fi'ubcor, Inc. and Hydro ill/emu/ional, PLC, HIL Technology, lnc. and Eutek, lnc.
(Dejenda"ts) which was filed in District 45 Court of Common Picas. It appears that Plai ntiff has incolTC:ctly
identifi ed some Hydro entities.
In this Civil Action, Plaintiff alleges that Hydro failed to supply equipment that would penonn to the
specifications in the contract entered into between Hydro and Fabocr, Inc., of which Plaintiff was a sole
intended beneficiary. Specificall y, Hydro supplied 2 Grit Snail units. DW"mg the summer of 2009, the Grit
Snail units and other wastewater equipment became operational. The Grit Snail units have failed to perfOlm at
specified grit load rates. Accordingly, Plaintiff all eges it has incurred costs for, among other things,
engineering consultants to remedy the issues. Plaintiff asserts that Hydro breached the contract for which
Plaintiff is a sole intended beneficiary.
We recognize that the allegations asserted by Plaintiff have not been proven, and by recounting those
allegations wc do not intend to imply they are true. We discuss the here in order to explain the
basis for oW" coverage position.
!LU issued policy nwnber G24151785 001, effective 08/0112010 tllfOUgh 08/1012011, to Hydro (the "!LU
policy'1. The n..U policy states, in relevant part:
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
CLAIMS MADE COVERAGE
SECTION 1- COVERAGES
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 3 of 13
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COVERAGE A-BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as
damages because of "bodily injury" or "property damage" to which this
insurance applies. We will have the right and duly to defend the insured against
any "suit" seeking those damages. However, we will have no duty to defend the
insured against any "suit" seeking damages for "bodily injury" or "property
damage" to which this insurance does not apply. We may, at our discretion,
investigate any "occurrence" and seUle any claim or "suit" that may result. But:
(1) 'lbe amoWlt we will pay for damages is limited as described in Section
111 - Limits Of Insurance; and
(2) Our right 311d duty to defend ends when we have used up the applicable
limit of insurance in the payment of judgments or settlements under
Coverages A or n or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is covered
unless explicitly provided for under Supplementary Payments - Coverages A and
B.
b. This insurance applies to bodily injury" and "property damage" only if:
(1) TIle " bodily injury" or "property damage" is caused by an "occurrence"
t1lat takes place in the "coverage tell'itory",
(2) TIle "bodily injury" or "property damage" did not occur before the
Retroactive Date, if any, shown in the Declarations or after the end of the
policy period;
All claims for damages because of "property damage" causing loss to the same person or
organization will be deemed to have been made at the time the first of those claims is
made against any insured.
2. Exclusions
This insurance docs not apply to:
b. Contractual Liability
Page 2112
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 4 of 13
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Page 3/12
"Bodily injury" or "property damage" for which the insured is obligated to pay
damages by reason of the assumption ofliability in a contract or agrecmenl Ibis
exclusion does not apply to liability for damages:
(1) 1113t the insured would have in the absence afthe contract or agreement;
or
(2) Assumed in a contrad or agreement that is an "insured contract",
provided the "bodil y injury" or "property damage" occurs subsequent to
the execution of the contract or agrccmenl Solely for the purposes of
li ability assumed in an "insured contrael", reasonable attorney fees and
necessary litigation expenses incurred by or for a party other than an
insured are deemed to be damages because of"hodil y inj ury" or
"propclty damage", provided:
(a) Liability to such party for, or for the cost of, that partYs defense
has also been assumed in the same "insured contract"; and
(b) Such attorney fees and litigation expenses arc:: for defense of that
party against a civil or allernative dispute resolution proceeding
in which damages to which this insur.:lnce applies are aUcged.
k. Damage To Your Product
"Property damagc" to "your product" arising out of it or any part of it.
I. Damage To Your Work
"Property damage" to "your work" arising out of it or any part of it and included
in the operations hazard".
This exclusion does not apply if the damaged work or the work out of which tllC
damagc arises was perfomted on yoW" bchalfby a subcontractor.
m. Damage to Impai red Property Or Property Not Physically Injured
"Property damage" to " impaired property" or property that has not been
physically injured. arising out of:
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 5 of 13
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(1) A defect, deficiency. inadequacy Of dangerous condition in
')rour product" or "your work"; or
(2) A delay or failure by you or anyone acting on your behalf to
~ o n n a contract or agreement in accordance with its lenns.
This exclusion does not apply to the loss of usc of other property arising
out of sudden and accidental physical injury to "your product" or "your
work" after it has been put to its intended usc.
n. Recall Of Products, \Vork Or Impaired Property
Damages claimed for any loss, cost or expense incurred by you or others for the
loss of use, witbdrawal, recall, inspection, repair, replacement, adjustment,
removal or disposal of:
(1) "Your product";
(2) "Your work"; or
(3) "Impaired prope1ty";
if such product, work, or property is withdrawn or recalled from the maIket or
from use by any person or organization because of a known or suspected defect,
deficiency, inadequacy or dangerous condition in it.
SECTION V - DEFINITIONS
8. "Impaired property" means tangible property. other than "your product" or "your work",
that cannot be used or is less useful because:
Page 4/ 12
a. It incorporates "your product" or "yow' work" that is known or thought to be
defective, deficient, inadequate or dangerous; or
b. You h.we failed to fulftll the tenus of a contract or agreement;
if such property can be restored to use by:
a. The repair, replacement, adjustment or removal of "your product" or your
work"; or
b. Your fulfilling the terms of Ute contract or agreement.
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 6 of 13
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13. "OcclUl"Cnce" means an accident, including continuous or repeated exposure to
substantially the same general hannful conditions.
16. Products-completed operations hazard":
a. Incl udes all "bodily injury" and "property damat,>c" occurring away from
premises you own or rent and arising out of "your product" or "your work"
excepl:
(I) Products that are still in your physical possession; or
(2) Work that has not yet been completed or abandoned. However,
"your work" will be deemed completed at the earliest of the following
times:
(a) When all oftbe work called for in your contract has been
completed.
(b) \\!hen all orlhe work to be done at the job site has been
completed if your contract calls for work at more than onc
job site.
(e) When tllat part of the work done at ajob site has been put to its
intended use by any person or organization other than another
contractor or subcontractor working 011 the same project.
Work that may need service, maintenance, correction, repair or
replacement, but which is otherwise complete, will be treated as
completed.
17. "Property damage" means:
Page 5/ 12
a. Physical injury to tangible property, including all resulting loss of use oftllat
property. All such loss of use shall be deemed to occur at the time of the
physical injury that caused it, or
b. Loss of use of tangible property that is not physically injured. All such loss of
use shall be deemed to occur at tlle time of the "occurrence" that caused it.
For the purposes of this insurance, electronic data is not tangible property.
As used in this definition, electronic data means infonnation, facts or programs stored as
or on, created or used on., or transmitted to or from computer software, including systems
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 7 of 13
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ace westchester
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and appiicalioM software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data
processing devices or any other media which are used with electronically controlled
equipment.
21 . "Your product":
a. Means:
(1) Any goods or products, other than real property, manufactured, sold,
handled, distributed or disposed of by:
(a) You;
(b) Others trading under your name; or
(c) A person or organization whose business or assets you have
acquired; and
(2) Containers (other than vehicles), materials, parts or equipment
furnished in connection with such goods or products.
b. Includes:
(1) Warranties or representations made at any time with respect to the
fitness, quality, dW'ability, perfonnance or use of "your product"; and
(2) The providing of or failure to provide warnings or instructions.
c. Does not include vending machines or other property rented to or located for the
use of others but not sold.
22. "Your work":
Page 6/ 12
a. Means:
(1) Work or operations petfonned by you or on your behalf; and
(2) Materials, parts or equipment furnished in connection with such work or
operations.
b. Includes:
(1) Warranties or representations made at any time with respect to the
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 8 of 13
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ace westchester
specialty group
fitness, quality, durability, pcrfolmancc or use of "your work", and
(2) The providing of or failure to provide warnings or instructions.
T I I t ~ Insuring Agreement arCoverage A of the !LU policy onl y covers sums that Hydro becomes legally
obligated to pay as damages because of "property damage" caused by an "occurrence." The alleged failure of
the Grit Snail units to perform according to specifications may not be an "occurrence," as that term is defined
and limited by the ILU policy. The costs incun'cd by Plainliffin an aUempt to remedy the issues with the
performance of the Grit Snai l units may not be "property d.1mage," as that term is defined and limited by the
lLU policy. Accordingly, au reserves its rights not to afford coverage to Hydro based on the potential for the
Insuring Agreement not to be applicable to the claims made by Plaintiff.
ILV does not afford covcrage for "property damage" to "your product," as that tcnn is defined and limited
by the au policy, pursuant to Excl usion 2.k.. Plaintiff alleges that components of the Grit Snail units
have experienced excessive wear requiring repair and replacement at a frequency that has caused Plaintiff
damages.
au docs not afford coverage for "property damage" to ''your work," as that term is defined and limited
by the [LU policy, pursuant to Exclusion 2.1.
ILU docs not afford coverage for "propelty damage" to "impaired property," as that term is defmed and
limitcd by the au policy, purswnt to Exclusion 2.111. Plaintiff alleges that their wastewater treatment
facility is less useful because of the inadequacy of the Grit Snail units since it is prevented from treating
the volumes ofwastewatcr required Wider Federal and PeIUlSylvania law.
FUitber, !LV does not afford coverage should Exclusion 2.n. be applicable to the claims of Plaintiff.
The ILU policy states further, in relevant part:
COVERAGES - CONTRACTORS POLLUTION LIABILITY
A. Insuring Agreement
Page 7/ 12
1. We will pay those sums in excess oflhe deductible shown in the Declarations that the
insured becomes legally obligated to pay as damages because of bodily injury or
property dumage to which this insurance applies. We shall have the right and duty
to defend the Insured against any claim or suit seeking those damages. However, we
shall have no duty to defend the Insured against any claim or suit seeking damages
for bodily injury or property damage to which tltis insurance docs not apply.
We may, at our discretion, investigate any loss and settle any claim(s) or suit(s) that
may rcsull But the amount we will pay for damages is limited as described in the
LIMITS OF INSURANCE AND DEDUCTIBLE Section; and our right and duty
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 9 of 13
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to defend ends when the applicable limit of insurance has been exhausted in the
payment of judgments, seUl cments or supplementary payments under all attached
Coverage Parts and all Supplementary Payments which reduce the Limit of
Insurance.
2. This insurance applies to a loss onl y if:
a. The loss takes place in the coverage territory arising out ofyout work; and
b. Your work did not occur before the Retroactive Date, if any, sho,,'ll in the
Declaration or after the end oCthe policy period; and
c. The claim(s) or suit(s) is first made against any Insured, in accordance willi
Paragraph 3. below, during the policy period or any Extended Reporting Period
we provide under the Extended Re porting Peri ods Section.
B. Exclusions
Page 8/12
TillS insurance does not apply to:
14. Products Liability
Bodily injury or property damage arising out of your product.
DEFINITIONS
L. Loss means bodily injury or property damage, neither expected nor intended
from the standpoint of the Insured, caused by or resulting from a pollution
condition and which results from in a claim or suit.
I). Pollution condition means the discharge, dispersal, release, escape, migration, or
seepage of any solid, liquid, gaseous or themtal, material matter, irritant or c o n ~
laminant, including smoke, soot, vapors, fumes, acids, alkalis, chemicals,
hazardous materials, or waste materials, on, in, inlo, or upon land and structures
thereupon, the atmosphere. surface water or groundwater.
R. Property damage means:
I. 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
physical injury that caused it; or
2. Loss of use of tangible property that is not physically injured. All such
loss of use shall be deemed to occur at the time of the loss; or
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 10 of 13
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ace westchester
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3. Cleanup costs.
4. Natural Resource Damage.
T. Your product :
1. 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 bwrncss or assets you
have acquired; and
h. Contai ners (other than vehicles), materials, parts or equipment
furnished in cormectian with such goods or products.
2. Includes:
n. Warranties or representations made at any time with respect to fllC
fitness, quality, durability, petfotmance or use of your product ;
and
h. The providing of or failure to provide warnings or instructions.
The Insuring Agreement of the Contractors Pollution Liability Coverage fOim indicates coverage is afforded
for property damage caused by or resulting from a pollution condition, as that tenn is defined by the au
policy. There is no indication that a pollution condition arose out of the work of Hydro. However, ILU would
not afford coverage for any liability arising from Plaintiff's use of the 2 Grit Snail uni ts due to Exclusion 14.
The D...U poli cy states further, in relevant part:
COVERAGES - PROFESSIONAL LIABILITY
A. Insuring Agreement
Page 9/12
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 11 of 13
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1. We will pay those sums in excess of the retention(s) shown in the DeclaratioruJ
that the insured becomes legall y obligated to pay as damages because of c1aim(s)
that result from the rendering or failure to render professional services for others
to which this insurance applies. We shall have the right and duty Lo defend the
insured against any suit es) seeking those damages. However, we have no duties
to pay damages as a result of claim(s) nor shall we have any duty to defend the
insured against any suites) seeking damages that result from rendering Of failure
to render professional services to which this insurance docs not apply.
B. Exclusions
This insurance does not apply to:
14. Products Liability
Clnim(s) arising out of your produd.
DEFINITIONS
Page l 0Il2
B. Claim(s) means a request or a demand received by you or us for money or setvices,
including the institution of suit, seeking damages arising from an act, or omission in
the rendering or fa ilure to render professional services.
I. Professional services mean those architectural, engineering, consulting, project
management or construction management services that are perfolmed by you or on your
behalf.
K. Your product :
1. Means:
3. Any goods or products, other than real property, manufactured,
sold, handled, distributed or disposed of by:
(I) You;
(2) Others trading lUlder your name; or
(3) A person or organization whose business or assets you
have acquired; and
h. Containers (other than vehicles), materials, parts or equipment
furnished in connection with such goods or products.
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 12 of 13
m,
ace westchester
specialty group
2. Includes:
a. Warranties or representations made at any time with respect to the
fitness, quality, durability, perfonnance or use of your product ;
and
b. The providing of or failure to provide warnings or instructions.
The Insuring Agreement of the Professional Liability Coverage form indicates coverage is afforded for
claim(s) that result from the rendering or failure to render professional services for others. There is no
indication Hydro has pcrfonned professional services for Plaintiff'. Further, au would not afford coverage for
any liability arising from Plaintiff"s use of the 2 Grit Snail units due to Exclusion 14.
The ILU policy contains the following endorsement which is applicable to all coverage parts:
TillS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY,
ALL KNOWN OR REPORTED INCIDENTS EXCLUSION
'Ibis insurance does not apply to bodily injury, property damage, personal and advertising
injury, or pollution conditions from any incident, claim, suit. act, error, o m i s s i o n ~ or accident of
which the insured is aware, or reasonably should have been aware, committed by. alleged to have
been committed by, occurring or reported to the insured, his agent, broker or insurance company prior
to the inception date of this policy are excluded from coverage under this policy.
AJ I other terms and conditions remain the same.
If Hydro was aware, or reasonably should have been aware, prior to August 01.2010, thalPlaintiffwas or
would be making a claim for damages incurred due to the inadequate perfonnance of the Grit Snail uni ts,
then lLU would be under no obligation to defend or indenmify Hydro.
ILU will provide Hydro with a defense to this Civil Action pursuant to this reservation of rights and
coverage position letter. n..U further reserves its ri ghts to seek reimbursement of defense costs incurred in
connection with this defense to the extent no defense and indemnity obligation was owed to Hydro.
Once a Jaw firm can accept the assignment of this matter, you will be promptly advised.
This reservation of rights is based on information presently known to lLV. Therefore, if you have any
additional facts or infonnation, please fonvard that information for our consideration. Our agreeing to
review any submission should not be construed as an admission of coverage.
Page 11112
Case 3:12-cv-00511-RDM Document 1-4 Filed 03/20/12 Page 13 of 13
m.
ace westchester
specialty group
Please be advised that ILV is not waiving any policy defenses which may now exist or which may
become known latcr under this policy. All ri ghts and defenses n..u may hereafter have or discover under
all the tenns, conditions, exclusions. insuring agreements and provisions of the ILV policy are hereby
reserved. lbis is irrespective of whether or nol they have been specifi call y referred to in this letter.
Should you have any questions concerning any of the foregoing, please call me.
Sincerely,
Stephen Kamoroff, as authorized representative of
Il linois Union Insurance Company
c:
Denise Lebeau
R-T Specially Insurance Services, LLC
Via E-Mail Only: dlcbeau@rtspecialty.com
Melanic Mason
HeJTcman Insurance Brokers
Via E-.Mail Only: melaniem@heffins.com
Page 12112

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