Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 1 of 10

UNITED STATE DISTRICT COURT

DISTRICT OF MINNESOTA

PETCO Animal Supplies Stores, Inc., Court File No.

a Delaware corporation,

Plaintiff, Demand for Jury Trial

Insurance Company of North America,

a Pennsylvania corporation,

Defendant.

COMPLAINT

Plaintiff PETCO Animal Supplies Stores, Inc. ("PETCO"), for its complaint against
Defendant Insurance Company of North America ("INA"), states and alleges as follows:

PARTIES

1. PETCO is a Delaware corporation, with its principal place of business in

California.

2. INA is a Pennsylvania corporation, with its principal place of business in

Pennsylvania.

JURISDICTION AND VENUE

3. This is a related case to another action currently pending in this district before the

Honorable James M. Rosenbaum.

 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 2 of 10

4. On February 17, 2009, Medtronic, Inc. ("Medtronic") filed a lawsuit against

PETCO, which is currently pending in the United States District Court for the District of

Minnesota, Court File No. 09-0363 (JMR/JSM) (the "Medtronic Action")

5. The present action is brought as a declaratory judgment pursuant to 28 U.S.C.

2201.

6. PETCO is a citizen of the States of California and Delaware.

7. INA is a citizen of the State of Pennsylvania.

8. The matter in controversy exceeds the sum or value of $75, 000 exclusive of

interest and costs because the insurance policy at issue in this action has a limit of liability of

$2, 000, 000. Accordingly, complete diversity exists and this Court has jurisdiction pursuant to 28
U.S.C. 1332.

9. Venue is proper in this Court under 28 U.S.C. 1391(a) because a substantial part

of the events or omissions giving rise to the claims herein occurred in this judicial district.

FACTS

10. In the Medtronic Action, Medtronic seeks approximately $1, 800, 000 for property

damage related to a May 20, 2007 fire at its facility. Medtronic alleges this fire was caused by a
"Profile" aquarium heater (the "Aquarium Heater") it purchased from PETCO.

11. This Aquarium Heater was designed and manufactured by Meiko Pet Corporation

("Meiko").

12. INA issued a Products Liability Insurance Policy to Meiko Pet Corporation

(Policy Number JCL0502023/2006-412) (the "Policy"), a true and correct copy of which is

attached hereto as Exhibit A.

2
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 3 of 10

13. Meiko and its insurer, INA, have been on notice of the Medtronic loss since May,

2007, within days after the fire.

14. On May 28, 2007, Meiko was foimally placed on notice of the Medtronic loss by
a claims administrator for PETCO.

15. On May 30, 2007, PETCO formally tendered the claim to Meiko.

16. On May 30, 2007, Meiko's insurer, INA, informed PETCO that INA had retained

the services of a forensic expert to attend a June 1, 2007 inspection of the loss.

17. On May 31, 2007, Meiko informed PETCO that it could directly contact Meiko's
insurance broker in Taiwan.

18. On May 31, 2007, Meiko informed PETCO that Meiko's insurance carrier was

handling this claim.

19. On August 31, 2007, INA's adjuster, GAB Robins North America, Inc., denied

the tender because PETCO allegedly was not "listed" as an "additional insured" on the policy.
20. PETCO at that point, of course, did not have a copy of the INA Policy to see that

the denial was not in good faith.

21. The Policy period was from September 20, 2006 to October 1, 2007.

22. The Medtronic loss occurred during the Policy Period.

23. The Policy territory is "worldwide."

24. The Insuring Agreement provides that "Nile Company will pay on behalf of the

Insured all sums which the insured shall become legally obligated to pay as damages because of

bodily injury or property damage including within the product hazard to which this insurance

applies.... The bodily injury or property damage must be caused by an occurrence. The

occurrence must take place in the Policy territory."

3
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 4 of 10

The Medtronic loss is an "occurrence" and constitutes "products hazard" and

a
"property
damage" under the terms of the Policy

25. The Policy defines "occurrence" as "an accident including continuous or repeated

exposure to substantially the same general harmful conditions."

26. The Medtronic loss is an "occurrence."

27. Assuming the allegations in the Medtronic complaint are true, the Medtronic loss

constitutes "property damage" per the Policy's definition.

28. Assuming the allegations in the Medtronic complaint are true, the Medtronic loss
constitutes a "products hazard, in that "products hazard' includes all... 'property damage'

occurring away from premises the Insured [Meiko] owns or rents and arising out of the Insured's

product or work except products that are still in the Insured's physical possession."
The Aquarium Heater is an Insured Product

29. The Policy provided coverage for Meiko products, including for "Aquarium

Heater[s]."

30. The Aquarium Heater was "manufactured by the Insured [Meiko] in Taiwan and

exported to the Policy territory."

31. In the alternative, the Aquarium Heater was "manufactured in Taiwan and

exported by the Insured [Meiko] to the Policy territory."

PETCO is an Additional Insured

32. The Policy contains an "Additional Insured (Vendors-Broad Form)" endorsement,

which amends the "Personal Insured" provision of the Policy to include as an Insured: "All the

Vendors who have directly contracted with the Named Insured [Meiko] in the regular course of

the vendor's business."

4
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 5 of 10

33. PETCO directly contracted with Meiko to purchase "Profile" aquarium heaters,

i.e., the one at issue in the Medtronic Action.

34. PETCO did not repackage, alter or modify the aquarium heater.
35. PETCO simply sold the finished product manufactured and supplied to it by
Meiko.

The Products Warranty exclusion does not apply

36. The Policy contains the following provision:

Products Warranty

It iswarranted, and a condition precedent to recovery hereunder, that Air Pumps, Heater,
Filters, Heating Stone, Heated Mat, Heated Bowl and Heated Bucket are UL/CSA
approved and/or complied with the mandatory and/or voluntary safety standards of the
importing countries.

Failure to comply with the conditions of this warranty shall render the policy null and
void.

See Exhibit A (emphasis added).

37. The Policy fails to state which "Heater" it is referring to in the Product Warranty

provision.

38. In a letter dated January 14, 2010, INA once again denied that it had a duty to
defend PETCO. In addition, INA stated that it "has been advised that the aquarium heater at
issue manufactured sometime between 1998 and 2000 and apparently was
was not subject to
UL/CSA standards."

39. The Aquarium Heater was not at that time subject to any UL/CSA standards

specific to aquarium heaters as a whole. Accordingly, the "Product Warranty" exclusion does

not apply.

5
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 6 of 10

40. In any event, INA entirely failed to consider the disjunctive language of the

Products Warranty provision, i.e., the repeated use of the word "or."

41. The Aquarium Heater complied with various UL and other safety standards

applicable at the time of manufacture, including but not limited to the fact that (a) the cord and

plug complied with the cord-connected appliances standard, (b) the appliance did not contain

sharp edges that could cause lacerations or cuts during intended use, (c) the material used had the

properties to meet the demand of expected loading conditions and would not break or deteriorate

in such away to cause injury, (d) the component mounted on a printed wiring board to form a

printed wiring assembly was securely held in place, (e) the material was resistant to a salt spray

test, (0 it had appropriate cautionary and warning markings, included but not limited to

instructions on a drip loop, and (g) the aquarium heater also met other safety standards.
INA owes PETCO a duty to defend the Medtronic action

42. PETCO is entitled to the benefits provided under the Policy, including, but not

limited to, INA (i) providing the coverage afforded PETCO under the Policy; (ii) undertaking the
defense of the Medtronic Action on behalf of PETCO; (iii) paying any verdict, judgment, or

settlement amount that may be entered, awarded or assessed against PETCO in the Medtronic

Action; and (iv) indemnifying and holding harmless PETCO for any and all liability, loss, costs,

disbursements, expenses, attorneys' fees, and any other expenses that may be imposed upon it by
reason of the Medtronic Action or the defense of the Medtronic Action.

43. The Policy provides that "[t]he Company [INA] shall have the right and duty to
defend any suit against the Insured seeking damages on account of such bodily injury or property

damage, even if any of the allegations of the suit are groundless, false or fraudulent...

6
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 7 of 10

44. On December 14, 2009, PETCO once again made wiitten demand on INA to

provide PETCO with the coverage pursuant to the Policy, including a demand for NA to

undertake the defense of the Medtronic Action on behalf of PETCO.

45. On January 14, 2010, INA denied PETCO's December 14, 2009 demand.

46. NA breached its duty to defend PETCO.

47. INA had a continuing duty to reevaluate its coverage position, which duty it
breached.

48. Rather than affording coverage provided by the Policy, INA:

a. failed to state a proper and adequate basis for denying coverage, and instead

asserted grounds for denying coverage contrary to the facts, the law, insurance industry

custom and practice, and PETCO's reasonable expectations;

b. gave more weight to its own financial interests than to PETCO's interests by

ignoring applicable law, unreasonably interpreting policy language in the insurer's favor,
and refusing to reimburse PETCO for its attorneys' fees and costs incurred in

investigating and defending the Medtronic loss and Action;

c. failed to conduct an adequate investigation into the facts and circumstances

related to PETCO's status as an additional insured;

d. failed to properly evaluate and/or investigate this claim thoroughly or in an

objective manner;

e. failed to acknowledge coverage and refused to reimburse PETCO without any

reasonable or legitimate basis for doing so;

f. misrepresented pertinent facts and/or insurance policy provisions relating to the

coverage at issue;

7
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 8 of 10

g. compelled PETCO to institute litigation to obtain coverage and amounts due

under the Policy; and

h. otherwise acted as alleged above and contrary to law.

49. PETCO has incurred attorneys' fees and costs in the approximate amount of

$100, 000 relating to the investigation and defense of the Medtronic loss and Action, and will

continue to incur additional amounts as the Medtronic Action continues to trial.

50. As PETCO tendered this claim in May, 2007 to Meiko and INA, and PETCO is

entitled to the benefits afforded by the Policy, INA must reimburse PETCO for the attorneys'
fees and costs it has and will continued to incur in investigating and defending the Medtronic
loss and Action.

51. As INA breached its duty to defend, PETCO is entitled to its attorneys' fees and

costs incurred in bringing this action. The attorneys' fees and costs incurred by PETCO are

consequential damages of INA's breach of its contractual duty to defend.

COUNT I
DECLARATORY RELIEF

52. PETCO restates and incorporates by reference the previous paragraphs.

53. A dispute has arisen between PETCO and INA concerning their respective rights,
duties and liabilities to one another under the Policy, including whether INA is required to
undertake the defense of the Medtronic Action on behalf of PETCO.

54. PETCO is entitled to a declaration that it is entitled to coverage under the Policy,
and is entitled to have INA undertake the defense of the Medtronic Action on behalf of PETCO.

55. PETCO has no other adequate and speedy remedy at law, and a declaration of

rights is necessary and proper for a resolution of the dispute.

8
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 9 of 10

COUNT II
BREACH OF CONTRACT

56. PETCO restates and incorporates by reference the previous paragraphs.

57. INA issued the Policy of insurance to Meiko that provided coverage to vendors of

Meiko as Additional Insureds.

58. PETCO is entitled to the benefits afforded by the Policy as an Additional Insured,

or otherwise.

59. INA breached its contractual obligations under the Policy by denying coverage to
PETCO.

60. INA breached its contractual obligations under the Policy by wrongfully refusing
to defend PETCO in the Medtronic Action.

61. INA has exhibited a pattern or practice of wrongfully, and in bad faith, denying

PETCO the contractual rights it has as an Additional Insured under the Policy.
62. PETCO has been damaged in an amount in excess of $75, 000 because of INA's

breach of contract.

RELIEF REQUESTED

WHEREFORE, PETCO Animal Supplies Stores, Inc. respectfully requests that the
Court rule as follows:

a. Issue an order and judgment declaring that PETCO is entitled to coverage under

the Policy, and is entitled to have INA undertake the defense of the Medtronic Action on behalf

of PETCO;

b. For an award of the attorneys' fees and costs PETCO has incurred to investigate
and defend the Medtronic loss and Action;

9
 Case 0:10-cv-00682-DWF-JSM Document 1 Filed 03/08/10 Page 10 of 10

For an award of PETCO's attorney fees and costs incurred in the

present action,
and such other damages proven at trial; and

d. For such other relief the Court deems

proper, just and equitable.
HENSON & EFRON, P.A.

Dated: March 8, 2010

By s/ Scott A. Neilson
Scott A. Neilson, 239951
Wesley T. Graham, 34574X
220 South Sixth Street, Suite 1800
Minneapolis, Minnesota 55402-4503
Telephone: 612-339-2500

Attorneys for Plaintiff PETCO Animal Supplies

Stores, Inc.

391040 DOC

10
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/1.0 Page 1 of 20

MOVit.itMilliatIORIMPAMV4-a]
"4.4,
v01? Insurance Company of North America
ace asia pacific

PRODUCTS LIABILITY
INSURANCE POLICY

0 0
Jt, int itec. it, et

tO,Li

wkitit-6:PV-WilTir. ^••;Z ' .Z 1 V:^:.?'' ..r•‘...,

4
"...A 11 7., i':'S e': ..1. •:•'s,
Aci87!,p4441,
4 ;.ik'it 'IV.;.4.,,
' .: 4„, ..:t:. V401;?+';', V•k*I.." i :P4::.
a

.1.•-^: ii, i..i§i.:::::;1•:, ..)t.i!j...::;;;Seg.ii;.0

!.i.., i.:;..,,,..xp".....4.•17:,11.:!.., ..5......;;:::.:1,4";?1.f, q, ....6, !IA; e.1.:, , 1,,,,,
:91140;.tese,;:f4 .:1.04.titt i .v.', ...1 :2''...1, 40i.: .Er'•.,.1,4-1.:v...?„, L.;•:,
...;:l z;::$044, ;0'.'":.•?":.:.-..;:if.f6.'1., .A.'
'NkSt:ift
.i.•:.••••;41, :4,....1.-,,, e,,,,1
r+.1;,..r:SW ^•Ir
l'',.:r..,
re,91%;;,,,, 1*S.:At>.^7
q•.
4,
.2,,,
.4':
e.,
4.,
.7.1. c
•••NP.,,
r•,,, O.;.• p,
tI „.f

"r.•

1;',

sec, 4. Taipei 106, Taiwan

Taipei Branch Office: 110, r‘l& 184, Hain yl Rd.,
TEL 8802 21920068 FM: 686 2 27066616
3b'i>1 108 It VA- #04. 4 a 184 tfc, I W
tf:: 8802 21920886 *A: 6662 27056616 -MS 'Pr* 4.1it: 0800608089
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 2 of 20

t f
f 7 f
f
f I

oztutiobotmgo rnsurom company

Inlief,$:ggiet\.s. V or Non Americo

4% 110 2 87581800 mob

ace insurance .611M16100512

stg 144
2 07501808 fax

wasumlauva,U
114441437. 12.23 OM* Z87244681MA qt.
A A if im FA- AL
Mill3200 JC1, 0502023/2000-412 444.3200JC1, 0502023/2005-397 Oft

A, Mello Pet Corp./ileiko Pet (Soung-Gang) Mtg. Factory

41 M 12, Industry 14th Road, Tali •City, Taichung Hsien, Taiwan,

(aSaft) R. 0. C.

Ofillifi Illi ti K, al 05 *9 A 20 M t1-12 it4, At M. pi, &196 *9 A 20 'El 474.12 14.1L

ig: Et Aquarium Air Pump, Aquarium Heater, Bubble Stone, Magnetic

Cleaner, Aquarium Plastic Tank, Aquarium Filters, Reptile Panel
'AAA* Heater, Reptile Heating Stone, Heated Pet Mat for Dog & Cat,
Heated Pet Bowl for Dog, Heated Flap-Back Bucket for dog or
horse and Aquarium Accessories manufactured by the insured and
sold to policy territory via all vendors,.
*Warranted Air Pumps, Heater, Filters, Heating Stone, Heated
?fat, Heated Bowl and Heated Bucket are T1L/CSA approved and/or
complied with the mandatory and/or voluntary safety standards
of importing countries.
Worldwide (However, under no circumstances shall any country or
le it ti
jurisdiction which is the subject of trade or economic
sanctions imposed by the laws or regulations of the United
States of America is being covered under this policy),

likilM11.ifl.,.
Mt iA gi A 111 IA rk 0- im a Ig: FA- A 61 Pi 0

611 4 —11)A4f6MT US$2, 000, 000 VS$7, 500 for al 1.

-1Yowered/herated-
61111 4-4$‘144031114T US$2p 000, 000 products; US$11 000 for
products other than

111
4 4 0 li a Ati 415)4,1i A. 0S$2, 000, 000 powered/heated
I* s'A 4t11 MI Pi .t.- Xt it IA rite% US$2, 000, 000 products, each
occurrence, which also
applies down to costs
and expenses
A r&A Ail l'i IA tt U. S. A. /Canada: US$1, 250, 000
Ai 444-$A R. 0. W.: US$500, 000
Total: US$1, 750, 000

04, 14At ItC Oreropilood art C•41....4t rApttir."

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 3 of 20

"V.
aceinsurance

ki* Re j 4 U S. A. /Canada.;
R. 0. 0, 93%
yA toc r9k ft US$31, 525 (NT$1, 037. 480

46. 4* Irk US$31, 525 (NUL 037, 480

—4,445t4Eamm144PANvtaqiitulut.
(Ams041044amm–A***a.Abo MO itliAtikpfMtatisr/I114.
Aa(g1)124-f.

IQ 95 4- 9 20 El

Page2I2 M050023/2005-02
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 4 of 20

INSURANCE COMPANY OF NORTH. AMERICA TAIPEI BRANCH OPPICB

Please review this policy carefhily and discuss the overage with your insurance agent, broker or representative.

DECT4RATIONS
POLICY NUMBER; LCIS,82023g006-,412,
RENEWAL of: ICL05,02023/2005-397

Item I. Named Insured: Nleiko Pet Corp./Meiko Pet (Soung-Gang) Mfg. Factory

Mailing Address: 12, Industry 14th Road, Tali City, Taichung Mien, Taiwan, R.O.C.

Item 2, Polley Period: Prom: September 20, 2006 P.M. 12:00

To; September 20, 2007 P.M. 12;00

Taiwan Standard Time

Occupation; Manufacturer

Item 3. Named Insured is: Corporation

Item 4. Limit of Liability: US$2,000, 000 each occurrence & US$2,000,000 annual aggregate

Item S. Deductible: US$7, 500 for all powered/heated products; US$1,000 for products other than
powiered/heated products, each occurrence, which also applies down to costs and
expenses

Item 6. Products: Aquarium Air Pump, Aquarium Heater, Bubble Stone, Magnetic Cleaner,
Aquarium Plastic Tank, Aquarium Filters, Reptile Panel Heater, Reptile Heating
Stone, Heated Pet Mat for Dog & Cat, Heated Pet Bowl for Dog, Heated
Flap•Back Bucket for dog or horse and Aquarium Accessories manufactured by
the Insured and sold to polley territory via all vendors.
*Warranted Air Pumps, Heater, Filters, Heating Stone, Heated Mat, Heated
Bowl and Heated Bucket are UL/CSA approved and/or complied With tbe
mandatory andfor voluntary safety standards Of impotting countries,

Item 7. Esthnate Sales; U.S.A./Canada; US$1,250,000

R.O.W.: US$500,000
Total; US$1,750, 000
Premium Rate: U.S.A1Canada; 2.15%
LON.:

Item 8, Minimum and US$31, 525 (NT$1, 037,488)

Deposit Premium:

Item 9. Policy Territory; Worldwide (However, under no circumstances shall any country or jurisdiction
which is the subject of trade or economic sanctions imposed by the laws or
regulations of the United States of America is being covered under this policy),
Item Endorsement Attached to The Policy as From Inception:
-Additional Insnred (Vendors-Broad Form)

Page 1 of 2 Policy leo. 101,0$0202,312004-412

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 5 of 20

INSURANCE COMPANY OF NORTH AMERICA TAIPEI ERANCH OFFICE

-Asbestos Exclusion
-Deductible Clause
-Efficacy Clause
-Millennium Endorsement
-Minimum Earned Premium Clause
-Mold and Fungi Exclusion
_Pollution Exclusion Absolute
Products Warranty

-Professional Liability Exclusion

-Punitive Damages Exclusion Clause
.Pure Financial Loss Exclusion

-snica Exclusion
-Terrorism Exclusion Endorsement
wUSAICanada Domieiled Operations Exclusion

In witness whereof this policy has been signed by or on behalf of the branch manager of the Company
at Taipei on September 20, 2006
Insurance Company of North America
Taipei Branch Office

Authorized Signature

Page 2 of 2 Policy No,,1(7.0502023/2006-4.12

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 6 of 20

insurance Company of North America Taipei Branch Office

in consideration of the premitun being paid by the Insured to the Insurance (ompany of North America, Taipei
Branch (hereinafter called tho Company) and in reliance unon the written statements and declaration contained in
the Proposal which shall be deemed to be the basis of this Policy the Company agrees to indemnify the Insured
as follows:

COVERAGE

Coverage is afforded under this policy in accordance with the specific Coverage Parts identified in Declarations
asbeing a part of dth policy.

PRODUCTS LIABILITY INSURANCE POLICY

Coverage Part Occurrence Form

A) Insuring Agreement
The Company will pay on behalf of the Insured nit sums which the insured shall become legally obligated to pay
as damages because of bodily Injury or property damage included within the product hazard 4o which this
insurance applies. No other obligations or liability to pay sums or perform acts or services is covered unless
provided for under SUPPLEMENTARY PAYMENTS. The bodily injury or property damage must be caused by
an occurrence. The occurrence must take place in the Policy territory.

The Company shall have the right and duty to defend any suit against the Insured seeking damages on account of
such bodily kittry or property damage, even if any of the allegations of the suit are groundless, false or
fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the
limit of
Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable
the Company's liability has been exhausted by payment ofjudgments or settlements.

II) Exclusions
This Insurance does not apply to;
exclusion
(I) bodily injury or property damage expected or intended from the standpoint of the Insured, This
does not apply to bodily injury resulting from the use of reasonable force to protect persons or property,
reason of the
(2) bodily injury or property damage for which the Insured is obligated to pay damages by
assumption of liability in a contract or agreement This exclusion does not apply to liability for damages:

(a) assumed in a contract or agreement that is an Insured contract, or

(b) that the Insured would have in the absence of the conft act or agreement.

(3) bodily injury or property damage for which any Insured may be held liable by reason of:
(a) causing or contributing to the intoxication of any person; the influence of
filo furnishing_of alcoholic beverages to 8 person under the lege! drinking age or under
alcohol; or
(c) any statute, ordinance or regulation relating to the sale, gift, distribution or use of alooholio beverages,
This exclusion applies only if the Insured is in the business of manufacturing, distributing, selling, serving
or

furnishing alcoholic beverages.

or unemployment
(4) any obligation of the Insured under a workers compensation, disability benefits
compensation law or any similar law.
(5) bodily injury to:
(a) any employee of the insured arising out of and in the course of employment by the insured;
or

(b) the spouse, child, parent, brother or sister of that employee Rs a consequence of (a) above,

PLEASE READ 'YOUR POLICY1 If incorrect return for ImMediate correction

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 7 of 20

Insurance Company of North America Taipei Branch Office

This exclusion applies:

(a) whether the insured may be liable as an employer or in any other capaeity; and
(b) to any obligation to share damages with or repay someone else who must pay damages because of the
injury.
This exclusion does not apply to liability assumed by the Insured under an insured contract.
(6) bodily injury property damage due to war, whether or not declared, or any act or condition incident to
or
wan War includes civil war, insurrection, rebellion or revolution. This exclusion applies only to liability
assumed under a contract or agreement.

(7) property damage to the Named insured's products arising out ofsuch products or any parts of such products;

(8) property damage to impaired property or property that has not been physically injured, miring out of;
(a) a defect, deficiency, inadequacy or dangerous condition in the insured's product; or
(b) a delay or failure by the Insured or anyone actiiig on his 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 the insured's product or work after it has been put to its intended use.
(9) damages withdrawal, inspection, repair, replacement, or loss of the use of the Named
claimed for the
Insured's products or eompleted by Or for the Named Insvred or of any property of which such
work
products or work form a part, if such products, work or property are withdrawn from the market or from use
because of any known or suspected defect or deficiency therein;

(10)bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors,
soot, Armes, acids, alkalis, toxic chemicals liquids or gases, waste materials or other irritants, contaminants
or pollutants into or upon land, the atmospi;ere or any watercourse or body of water.

This insurance also does not apply to any cost or expense arising out of any governmental demand or
request That an Insured test for, assess, monitor, olearnup, remove, contain, treat, detoxify, or neutralize any
such irritants, contaminants or pollutants.

This Company shall not have the duty to defend a»y olaim or suit seeking to impose such costs, expenses,
liability fOr such damages, or any other relief.

(II) (a) Under any Liability Coverage, to bodily injury or property damage:
cn with respect to which on 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 Assoelation of Canada, or would be an Insured under any such
policy but for its termination upon exhaustion of its limit of liability; or
resetting from the-hazardous -properties.otnuclear material and witn resp.ectio_whickaany.person
or organization is required to maintain financial protection pursuant to the Atomic Energy Act of

1954, or any taw amendatory thereo f, or (0) the Insured is, or had this policy not been issued would.
be, entitled to indemnity from the United States of America, or any agency th'eteof, under any
agreement entered into by the United States of America, or any agency thereof, with any person or
organ ization;

(b) Under an Medical Payments Covetage, or ender any Supplementary Payments provision relating to
first aid, to expenses incurred with respect to bodily injury resulting llorn the hazardous properties of
nuclear material and arising out of the operation of a nnclear facility by any person or organization,
(c) Under any Liability Coverage, to bodily iejury or property damage resulting from the hazardous
properties of nuclear material, it

PLEASE READ YOUR POLICY I If incorrect return for immediate correetion

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 8 of 20

Ins urance Company of Notth America Taipei Branch Office

G) the nuclear material (i) is at any nuclear facility owned by, or operated by or on behalf of, an insured,
or (II) has been discharged or dispersed therefrom;
mi the nuclear material is contained In spent fuel or waste at any time possessed, handled, used,
processed, stored, transported or disposed ofby or on behalf of an Insured; or
the bodily Injury or property damage arises out of the fUrnishing by an Insured of orvices, materials,
parts or equipment in connection with the planning, construction, maintenance, operation or uso of
any nuclear facility, but if such facility is located within the United States of America, its territories
or possessions, or Canada, this exclusion cir applies only to property damage to such nuclear facility
and any property thereat;
(d) As used in this Exclusion:
ff "Hazardous properties" include radioactive, toxic, or explosive properties;
"Nuclear material" means source material, special nuclear material or byproduct material;
"Source material", "special nuclear material", and "byproduet material" have the meanings given
them in the Atomic allergy Act of 1954 or In any law amendatory thereof;
"Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or
exposed to radiation In a nuclear reaetor;
e^ "Waste" means any waste material (I) containing byproduct material and (ii) resulting from the
operation by any person or organization of any nuclear facility included within the definition of
nuclear facift under paragraph (i) or (ii)ttlercof;
"Nuclear facility" means: (I) any nuclear reactor; (ii) any equipment or device designed or used for
(aa) separating the isotopes or uranium or plutonium, (bb) processing or utilizing spent Mel, or (cc)
handling, processing, or packaging waste; (ill) 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 eustody 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; (iv) any structure, basin, exoavation, premises or place prepared or used
for the storage or disposal of waste; and (v) includes the site on which any of the foregoing is
located, all operations conducted on suoh site, and all premises used for such operations;
"Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a
scikupporting chain reaction or to contain a critical mass of fissionable material;
"Property damage" includes all forms of radioactive contamination of property.

wpm MENTARY PAY:WM

The Company will pay with respect of any claim or stlit

(I) AU expenses incurred by the Company, all costs taxed against the insured in any suit. defended by the
Company and all interests on the entire amount of any Judgment therein which accrues after entry of the
Judgment and before the Company has paid or tendered or deposited in court that part of the judgment
atlitirCompany'S liability-thereon;
(2) Premiums on appeal bonds required in any such suit, and premiums on bonds to release attachments in any
such suit for an amount not in excess oftheapplicable limit of liability ofthis policy;
(3) Palms incurred by the Insured for first aid to others at the time of any accident, for bodily injury to
which this policy applies;

(4) Reasonakic, expenses incurred by the insured at the Company's request in assisting the Company in the
investigation or defense of any claim or suit, including actual loss of earnings not to exceed $100 per day.
The Company agrees to pay the claims expenses Incurred under the above sections but such payments shall be
part of, and not in addition to, the Applicable limits_of ljabitity, of this_coyerage,

PLEASE RRAD YOUR POLICY] If incorrect return for immediate correction

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 9 of 20

insurance Company of North America Taipei Branch Office

PERSONS INSURED

Baoh of the following is an Insured under this Insurance to the extent set forth below:

(1) If the Named Insured Is designated in the dolarations as an individual, the person so designated
but only with respect to the conduct of a business of whieh he is the sole proprietor, and the
of such a business;
spouse of the Named Insured with respeet to the onduot

(2) If the Named Insured is designated in the declarations as a partnership of joint venture, the
so designated and any partner or member
thereof ba only with
partnership or joint venture
respect to his liability as such;
(3) If the Named Insured is designated in the declarations as other than an individual, partnership
or
director or stockholder
joint venture, the organization designated and a»y executive officer,
thereofwhile acting within the scope of his duties as such;
while acting as real
(4) Any person (other than an employee of the Named Insured) or organization
estate manager for the Named Insured,
conduct of any
This insurance does not apply to bodily injury or property damage arising out of thenot
or joint venture of which the Insured is partner member and which is designated in
partnership a or

this policy as a Named Insured.

LIMIT OF LIABILITY,

organization who sustain

Regardless of the number of (A) Insureds under this policy, (B) persons oraccount
made or suits brought on of bodily injury or
bodily injury property damago, (C)
or or claims
follows:
property damage, the Company's liability is limited as

is limit of the
The limit of liability stated in the declarations as applicable to "each occurrence"
damage, or both combined,
Company's liability for damages
all bemuse of bodily injuty or property
as the result of any one occurrence,

of the Company for all

Subject foregoing respecting "each occurrence" the total liability
lo the
Included within the products hazard, shall
damages berranse of all bodily injury and property danmge
not exceed the limit stated in the declarations as "aggregate",
all property damage arising out of
For the purpose of determining the Emit of the Company's liability,
CoMintIMIS or repeated exposure to substantially the same general conditions shall be considered as

POLICY TERRITORY

This insurance applies to bodily injury or property damage owed by an occurrenee Included within
of the
the product hazard which takes place in the Policy territory designated in Item 9
DECLARATIONS sheet,

correction
PLEASE READ YOUR POLICYI If incorrect return for immediate
 Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 10 of 20

Insurance Company of North America Taipei Branch Office

DMNITIONS,
When used in this policy:
A) "Bodily injury" means bodily injury, sickness or disease sustained by any person which ocours during the
policy period, including death at any time resulting therefrom.
B) "Claims expense" means;
0 Fees charged by an attorney designated by the Company; and
O All other fees, costs and expenses resulting from the investigation, adjustment, defense and appeal of a
claim, if incurred by the Company or by the Insured with the written consent of the Company;
O Cost of Investigation and odjustment of claims by salaried employees, fee adjusters or attorneys of the
Company;
O The Company's overhead,
C) "bnpaired property" means tangible property, other than tho Named Insured's product or work, that
cannot be used or is less usefol because:
O It incorporates the Named Insured's pr oduct or work that is known or Thought to be defective, deficient.,
inadequate or dangerous; or
O The Named Insured failed to Thifill the terms of a contract or agreement.

D) "Insured waft aet" means:

O A lease of premises;
O A sidetrack agreement;
O An easement or license agreement in connection with vehicle or pedestrian private railroad crossings at
grade;
E) "Inswed's product" means:
0 Any goods or products designated in Item 6 of the DECLARATIONS which were: a) manufactured by
the Insured In Taiwan and exported to the Policy territory, or b) manufactured in Taiwan and exported
by the Insured to the Policy territory.
such goods
O Containers (other than vehicles), materials, parts or equipment furnished in connection with
or products.
The Insurod's product includes warranties or representations made at any time with respect to the

fitness, quality, durability or performance of any of the items included in 0 mule above,
The Insured's product does not include vending machines or other property rented to or located for the
use of others but not sold.

F) "Occurrences' means an acoiderit including eontinuous or repeated exposure to substantially the same

general harmful conditions,

0) "Pollutants" moans any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor
reconditioned or
soot, fumes, acids, alkalis, chemicals and waste. Waste inoludes materials to be recycled,
reclaimed.
premisesThe-
---11)-"Produtteiluzartl"- includes-a11-"bodity injirry"- and--"propenty-damege.!Locourring -away. fromare
Insured owns or rents and arising out of the Insured's produet or work except productsin the
that still
Insured's physical possession,

I) "Property damage" moans:

O Physical injury to or destruction of tangible property which occurs during the policy period, including
the loss of use thereof at any limo resulting thereftom, or
such loss
O Loss of use of tangible property which has not beon physically injured or destroyed provided
of use is caused by art occurrence during the policy period.

3) "Suit" means a civil proceeding in which damages because of "bodily injury" or "property damage' to
which this insurance applies are alleged. 'Suit" includes an arbitration proceeding alleging such damages
to

which the Named Insured must submit or submit with the Company's consent,

PLEASE RBAD YOUR POLICY1 If incorrect return for immediate correction

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 11 of 20

Insurance Company of North America Taipei Branch Office

CONDITIONS
A) Premium
Ali preminms for this policy shall be computed in accordance with the Company's rules, rates, rating plans,
premiums and minimum premiums applicable to the insurance afforded herein.
Premium designated In this policy as "advance premium" is a deposit premium only which shall ba credited to
the amount of the earned premium due at the end ofthe policy period. At the close of each period (or part thereof
terminating with the end of the pbliey period) designated in the declarations as the audit period the earned
premium shalt be computed for sneh period and upon notice thereof to the Named Insured, shall become due and
payable. If the total earned premium for the polioy period is less than the premium previously paid, the Company
shall return to the Named Insured the unearned portion paid by the Named Insured.
The Named Insured shall maintain records of such information as is necessary for premium computation, and
shall send copies of such records to the Company at the end of the policy period and at such times during the
policy period as the Company may direct.
B) Inspection and Audit
The Company shall be permitted but not obligated to inspect the Named Insured's property and operations at any
time, Neither the Company's right to make Inspections tior the making thereof nor any report thereon shall
constitute an undertaking, on behalf of or for the benefit ofthe Named Insured or others, to determine or warrant
that such property or operations are safe or healthful, or are in compliance with any law, rule or regulation.

The Company may examine and audit the Named Insured's books and records at any time during the policy
period and extensions thereof and within three years after the final termination of this policy, as far as they relate
to the subject matter of this Insurance.

C) Insured's Duties In the event of Occurrence, Claim or Suit

(I) in the event of an occurrence, written notice containing particulars sufficient to identify the Insured and
also reasonably obtainable information with respect to the time, place and eircumstanoes thereof, and
the names and addresses of the injured and of available witnesses, shall be given by or for the Insured
to the Company of any of its authorized agents as soon as practicable.
(Z) If claim is made or is brought against the Insured, the Insured shall immediately forward to the
Company every demand, notice, summons or other process received by him or his representative.
(3) The Insured shall cooperate with the Company and upon the Company's request, assist in making
settlements, in the conduct of suits and in enfhreing any right of contribution or indemnity against any
with respect to
person or organization who may be liable to the Insured because of injury or damage
which insurance is afforded under this polfey; and the Insured shall attend hearings and trials and assist
in securing and giving evidence and obtaining the attendance of witnesses. The Insured shall not,
except at his own cost, voluntarily make any payment, assume any obligation or
incur any expense
other than for first aid to others et the time of accident

D)--Attitiv—AvAltrgt-Comouy
No action shall lie against the Company unless, as a condition precedent thereto, there shall have boon full
complience with all of the terms of this policy nor until the amount of the Insured's obligation to pay shall have
been finally determined either by judgment against the Insnred after actual trial or by written agreement of the
Insnred, the claimant and the Company.

organization the legal representative thereof who has secured such. judgment or written
Any person or or
agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this,
policy, No person or organization shall have any right under this policy to join the Company as a party to any.
action against the Insured to determine the Insured's liability, nor shall fire Company, be impleaded by the.Insnred.:,. V I. III1 1$,,,,

or his legal representative. Bankruptcy or insolvency of the Insured or of the Insured's estate shall not relieve
the....
Company of any of its obligations hereunder.

?LRAM READ YOUR POLICY! If incorrect return for immediate correction

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 12 of 20

insurance Company of North America Taipei Branch Office

B) Other Insurance
The insurance afforded try this policy is primary insurance, except when stated to apply in excess of or
contingent upon the absence of other insurance. When this Insurance is primary and the Insured has other
insurance which is stated to be. applicable to the loss on an excess or contingent basis, the amount of the
Company's liability under this policy shall not be reduced by the existence of such other insurance.
When both this insutance and other insurance apply to the loss on the same basis, whether primary, excess or
contingent, the Company shall not be liable under this policy for a greater proportkm of the loss than that stated
in the applicable contribution provision below:
(1) Contribution by Squat Shares: If all of such other valid and collectible insurance provides for
contribution by equal stares, the Company shall not be liable for a greater proportion of such loss than
would be payable if mit Insurer contributes an equal share until the share of each insurer equals the
lowest applicable limit of liability under any one policy or the Atli amount of the loss is paid, and with
respect to any amount of loss not so paid the remaining insurers then continue to contribute equal
shares of the remaining amount of the loss until each such insurer has paid its limit in full or the full
amount of the loss is paid.
(2) Contributions by Limit, If any of such other insurance does not provide for eontribution by equal
shares, the Company shall not be liable for a greater proportion of such loss than the applicable limit of
liability under this policy for such loss bears to the total applicable limit of liability of all valid and
collectible insurance against such ioss,

F) Subrogation
In the event of any payment under this policy, the Company shalt be subrogated to all the Insured's rights of
recovery therefor against any person or organization and the Insured shall execute and deliver instruments and
papers and do whatever else is necessary to secure such rights. The Insured shall do nothing after loss to
prejudice such rights.
0) Changes
Notice to any agent or knowledge possessed by any agent or by any other person shell not effect a waiver or a
change in any part of this polity or estop the Company from asserting any right under the terms of this policy;
nor shall the terms of this policy be waived or changed, exeept by endorsement issued to form a part of this
policy.
II) Assignment
Msignment of intetest under this policy shall not bind the Company until its consent is endorsed hereon; If,
however, the Named Insured shall die, such insuranee as is afforded by this policy shalt apply (I) to the Named
Insured's legal representative, as the Named Insured, but only while acting within the scope of his duties as sueh,
and (2) with respect to the property of the Named Insured, to the person having proper temporary custody
thereof, as Insured, but only until the appointment and qualification of the legal representative.
1) Cancellation
This policy may be cancelled by the Named Insured by surrender thereof to the Company or any of its authorized
agents or by mailing to the Company written notice stating when thereafter the eancellation shall be effective.
This policy may be cancelled by the Company by mailing to the Named Insured at the address shown in this

mailing of rodeo as aforesaid shall be sufficient proof of notice. The time of surrender or the effective date and
hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written
notice either by the Named Insured or by the Company shall be equivalent to mailing.
If the Named Insured cancels, earned premium shall be computed In accordance with the customary short rate
table and procedure. If the Company camels, earned premium shall be (Imputed pro rata Premium adjustment
may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes
effective, but payment or tender of unearned premium is not a condition of cancellation.
D ecla rations
By acceptance of this policy, the Named Insured agrees that the statements in the declarations are his agreements
and representations that this policy is issued in rollmop upon the trnth of such remesentations and that this
policy embodies allagreements existing between himself and the Company or any of its agents relating to this
insurance.

PLEASE READ MP. POLICYI If incorrect return for immediate correction

Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 13 of 20

Insurance Company of North America Taipei Branch Office

Additional Insured (Vendors.Broad Form)

It is agreed that the "Personal Insured" provision Is amended to include any person or organization designated
below (herein referred to as "vendor"), as an Insured, but only with respect to "bodily blinry" or "property damage"
arising out of the Named Insured's products designated below which are directly distributed or sold byte vendor.
It is also understood that the vendor has directly contracted with the Named Insured in the regular course of' the
vendor's business, subject to the following addition provisions;

I. The insurance with respect to the vendor does not apply to:
(a) any express warranty unauthorized by the named insured;
(b) bodily injury or property damage arising out of
(i) any physical or chemical change in the form of the product made intentkmally by the vendor,
(ii) repacking, unless unpacked solely for the purpose of inspeetIon, demonstration, testing or the
substitution of parts under instruction from the manufacturer and then repacked in the original
oontainer,
(iii) demonstration, installation, servicing or repair operations except such operations performed at the
vendor's premises in connection with the sale of the product.
(iv) Any failure to make such inspection, adjustments, tests or servicing as the vendor has agreed to make
or normally undertakes to make in the usual course of business, in connection with the
distribution or
sale of the products;
(v) products which after distribution or sale by the named insured have been labeled or relabeled or used
as a container, part or ingredient of any other thing or substance by or for the vendor.

has
2, The insurance does not apply to any person or organization, as Insured, from whom the Named Insured
acquired such products or any ingredient, part or container, entering into, accompanying or containing such

products.

SCBBDIJI,B

Vendor(s): All the Vendors who have directly contracted with Named Insured in the regular course of the

Products: As per the declarations of the policy

Asbestos Exehtsion,
This policy does not apply to any loss, demand, claim or suitcarising out of or related in any way to asbestos or

PLEASE READ YOUR POUCYI If Incorrect, please return for Immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 14 of 20

Insurance Company of North America Taipei Brandi Office

asbestos-containing materials.

The company shall have no duty of any kind with respect to any sueh loss, demand, claim or suit.

This endorsement applies to all coverages under this policy.

Ap_c_inci11219S1arsu
I, The Company's obligation to pay damages on behalf of the Insured applies only to the amount of damages in
excess of any deductible amounts stated in the Deolarations, which also applies down to any legal defense and

costs.

2. The deductible amount stated in the Declarations applies on a "per occurrence" basis under Bodily injury
and/or Property Damage Liability Coverage Combined, to all damages and expenses (as stipulated
in "Supplementary Payment" because of:
(a) "Bodily injury";
(b) "Property damage;
(c) "Bodily injury" and "property damages" combined;
as the result of any one "occurrence", regardless of the number of persons Or organizations who sustain

damages because of that "occurrence.

3. The terms of this insurance, including those with respect to:

(a) The Company's right and duty to defend any "suits" which Is seeking those damages; and
(b) Insured's duties in the event of an "occurrence", claim, or "suit"
apply irrespective of the application of the deductible amount,

4, The Company may pay any pad or all of tbe deductibk amount to effect settlement of any claim or "suit" and,
upon notification of the action taken, the Insured shall promptly reimburse the Company for such part of
the deductible amount s has been paid by the Company.

PLEASE READ YOUR POLICY1 If Incorrect, please return for Immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 15 of 20

Insurance Company of North Amerka Taipei Etranch Office

Efficacy Clause
It is understood and agreed that this insurance does not apply; nor do the company have a duty to defend, any
claim or suit for bodily injury and/or property damage, resulting from the failure ofthe insured's product or the
insured's work completed by or for the insured to cure, alleviate, prevent, eliminate or retard bodily injury, property
damage, or to any such warranties, representations or agreements to that effect that are made by the insured.

Millennium Xtudorsement

PRODUCTS LIABILITY

Exclusions

This insurance does not apply to "bodily injury" or "property damage" included In the "products hazard" definition
and arising directly or indirectly out of:

A. Any actual or alleged failure, malfunction or inadequacy of:

(I) Any of the following, whether belonging to any insured or to others

(a) Computer hardware, Including micro-processors;
(b) Computer application software;
(e) Computer operating systems and related software;
(d) Computer networks;
(e) Microprocessors (computer chips) not part of any computer system; or
(f) Any other computerized or electronic equipment or components; or

(2) Any other products, and any services, data or firnctions that directly
or Indirectly use or rely upon, in any manner, any of the items listed In Paragraph A.(I)
of this endorsement

Due to the Inability or failure to process, including, but not limited to, calculating, comparing, recording, retrieving,
s-trArklg, Manipulating, writing to media, determining, distinguishing, converting, transferring
or
—seqUen-Oingt reftdingi,
executing "Date/Time Material".
manner includes,
"Date/Time Material", as used herein, moans dates, times or dato or information that in any
ofthe manner
depends upon, is contingent upon, is derived from, or incorporates any date or time, irrespective
or medium of storage or recordation,

B. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement
or

supervision provided or done by the Insured or fbr the Insured to determine, rectify test for, any potential
or

or actual problems described in Paragraph A. of this endorsement.

PLEASE READ YOUR POLICYI If incorrect, please return for immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 16 of 20

Insurance Company of North America Taipei Branch Oface

yilnimum Earned Premium Clause

In the event of cancellation of this policy by the Insured, a minimum premium of 25% shall beeome earned; any
cancellation of the policy to the contrary notwithstanding. Failure of the Dunned to make timely payments of
oancelladon
premium shall be considered a request by the Insured for the Company to cancel. In the event ofsuch
by the Company for non-payment of premium, the minimum premium shall be due and payable; however,
sueh

non-payment cancellation shall be rescinded Ifthe Insured remits the full premium due within 10 days of receiving
notice of cancellation. In the event of any other caneellation by the Company the earned premium shall be
computed pro rata, not subject to the minimum premium.

Nold and Fungi Exeluslon

It is agreed that this insurance shall not apply to;

a. Any sums which any Insured becomes legally obligated to pay as damages because of Bodily Injury, Propetty
to the actual,
Damage, Personal Injury, Advertising Injury or Medical Payments directly or indirectly relating
of mold, mildew or fungi of any kind whatsoever, or any material
potential, alleged or threatened presence
containing them at any time.

b. Any loss, cost or expense;

I. Any Insured or any other person or organization may incur in testing for, monitoring, removing,
treating or in
or threatened presence of mold, mildew or tbngi ofany
any way responding to the actual, potential, alleged
kind whatsoever, or any materials containing them, whether a result
as of a request, demand, statutory or

regulatory requirement or otherwise; or

on behalf
II. Any Insured or any other person or organization may incur in connection with any claim "suit"
or

of any government authority or any person or organization relating to the actual, potential, alleged
or

materials containing them.

threatened presence of mold, mildew or thngi of any kind whatsoever, any
or

claim "suit" seeking

e. The Company will have no duty or obligation to defend any Insured with respect to any or

any such damago.

Follutlon xeluOon Absolute

release or escape of smoke, vapors,

it isagreed that any exclusion in the policy relating to the discharge, dispersal,
materials other irritants, contaminants or
soot, filmes, acids, alkalis, toxic chemicals, liquids, gases, waste or

pollutants is replaced by the following:

release or escape of
To personal injury, bodily injury or property damage arising out ofthe discharge, dispersal,

PLEASE READ YOUR POLICYI If incorrect, please return for Immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 17 of 20

Insurance Company of North America Taipei Branch Office

smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants,
contaminants or pollutants intoor upon land, the atmosphere or any watercourse or body of water.

This insurance also does not apply to any cost or expense arising out of any governmental demand or request that
an Insured test for, assess, monitor, clean.up, remove, contain, treat, detoxify, or neutralize any such irritants,
contaminants ot pollutants.

This company shall not have the duty to defend any claim or suit seeking to impose such costs, expenses, liability
for such damages, or any other relief,

rLobjp.,tEuxkup4
It is warranted, and a condition precedent to recovery hereunder, that Air Pumps, Heater, Filters, Heating Stone,
Heated Mat, Heated Bowl and Heated Bucket are OL/CSA approved and/or compiled with the mandatory and/or
voluntaty safety standards of importing countries.

Failure to comply with the conditions of this warranty shall render this policy null and void.

Professional Liability 4elusipn.

This policy excludes any liability arising out ofthe rendering of professional advice or services for a fee or any error
or omission eonnected therewith, For the purposes of this exclusion Professional Services means the performance
of work by the Insured for any service or advice provided for a fee or remuneration; including but not limited to
designing, consulting, predesign, specification, tethnical information, feasibility studios, surveying, project
management, supervision of constmction under the direct instruction of an architeot or engineer, misstatements,
misleading statements, defamation, breach of any intellectual property right (such as copyright, trademark, patent),
breach of contract, breach of confidentiality or similar activities.

Punitive DAM ages Exclusion clause

agreed that this insurance shall not apply to fines, penalties, punitive damages, exemplary damages, treble
It is
damages, or other damages resulting from the multiplication of

Pure Pi/Ionia! Loss Exclusion

This Polley does not cover the liability of financial loss sustained by a customer or user of any Insured's Products if
such financial loss Is a direct result date defective or hartrififi conditions of such Insured's Products or their Failure
to perform a function for which they were supplied by the Insured.

All other terms & conditions remain unchanged.

PLEASE READ YOUR POLICY! Unmarred, please return for immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 18 of 20

Insurance Company of North America Taipei Branch Office

Sifica txdusion

A. This insurance does not apply to:

Silica
1."Bodily Injury" and "Property Damage" related to the actual, alleged, or threatened presence of or exposure
to "silica" in any form, or the harmful substances emanating from "silica". This includes the use of,

consnmption of, ingestion of, inhalation of; absorption of, contact with, existence 4 presence of,
proliferation of; discharge of; dispersal of, seepage of, migration of; release of, escape of, or exposure
to "silica". Such injury from or exposure to "silica" also includes, but is not limited to:

a. The existence, storage, handling or transportation of"silica";

b. The removal, abatement or containment of "silica" from any structures, materials, goods, products, or,
manufacturing process;
c. The disposal orsilica";

d. Any structures, manufacturing processes, or products containing "silica";

e. Any obligation to share damages with or repay someone else who must pay damages because of such

injury or damage;
f,Any product manufactured, soid, handled or distributed by or on behalfof the insured which contains
"silica"; or
g. Any supervision, instructions, recommendations, warranties (express or implied), warnings or advice
given or which should have been given.

2.Any loss, cost or expense Including, but not limited to, payment for investigation or defense, tines, penalties,
interest and other oasts or expenses, arising out of any:
a. Claim, "suit", demand, judgment, obligation, order, request, settlement, tir statutory or regulatory

requirement that any insured or any other person or entity test for, monitor, clean up, remove, contain,
mitigate, treat, neutralize, lemediate, or dispose of; or In any way respond to, or assess the actual or alleged
effbets of "silica"; or
b. Claim, "suit", demand, judgment, obligation, request, or settlement due to any Woe!, alleged> or threatened
injury or damage from "silica" or testing for, monitoring, cleaning up, removing, containing, mitigating,
treating, neutralizing, remediating, or disposing of, or in any way responding to or assessing the actual or
_____alteged_effects of;, !sillen!..hy.anY. inSnred el by anypther person or entity;, or
c. Claim, "suit", demand, judgment, obligation, or request to investigate which would not have occurred, in

whole or in past, but for the actual or alleged presence of or exposure to "silica".

This exclusion applies regardless of who produced, installed, used, owned, sold, distributed, handled, stored or

controlled the "silica".

B, Me following definition is added to the DEFINITIONS Section;

"Silica" means the mineral, silicon dioxide, and any type or form of it including, but not limited to,
silica-contalning products, goods, fibers Or materials, silica dust, fine particulate dust of siliceous or silicie

PLEASE READ YOUR POLICYI If Incorrect, please return for Immediate correction
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 19 of 20

Insurance Company of North America Taipei Branch Office

minerals, and any gases, vapors, scents or by.produots produced or released by silica, silica dust or
sill-ea-containing products, goods, fibers or materials, Siliceous or Oleic minerals include, but are not limited to,
sand, quartz, slate, granite and flint

errorlsm Exclusion Endorsement

Notwithstanding any provision to the contrary Within this insurance or any endorsement thereto it Is agreed that this
insurance excludes death, injury, illness, loss, damage, expense of whatsoever nature directly or indirectly
oost or

caused by, resultingflom or In connection with any Act ofTerrorisrn regardless of any other cause or event
contributing concurrently or in any other sequence to the loss;
use of force or
For the purpose ofthis endorsement Act of Terrorism means an act, including but not limited to the
whether acting alone or on behalf of or In
violence and/or threat thereof, any person group(s) persons,
of or of
connection with any organisation(s) or government(s) which from its nature or context is done for, or in connection
intention to influence any
with, political, religions, ideological, ethnic or similar purposes or reasons, including the
government and/or to put the public, or any section of the public, in fear,

of whatsoever nature directly

This endorsement also excludes death, injury, illness, loss, damage, cost or expanse
or indirectly caused by, resulting from or in connection with spy action taken in controlling, preventing, suppressing
or in any way relating to any Act ofTerrorism,

TISAfCanatla Domiciled Operations Exclusion,

it is agreed that this
Notwithstanding any provision to the contrary within this insurance or any endorsement thereto,
of, caused by, resulting from, or In connection
insurance does not apply to any claim arising directly or indirectly out

with any Named Insured's USA/Canada domiciled operations.

not otherwise preclude or excluded

The addition of this endorsement does not imply that other policy provisions do
coverage for any such claims, suits proceedings.
or

correction
PLEASE RBAI> YOUR POLICY! IT incorrect, please return for immediate
Case 0:10-cv-00682-DWF-JSM Document 1-1 Filed 03/08/10 Page 20 of 20

AMalLAMINARRagat.01q
Insurance Company of North America
ENDORSEMENT
Named Insurech lvSeiko Pet Corp./Mello Pet (Soung.0ang) Mfg. Date Sentember 21.2007
Factory
Policy No.: XL0502023/2006-412 Endorsement No,: 0.1-20072R

It is hereby declared and agreed that, the policy eXpiry date is extended to October 01,
2007 from September 20, 2007, Consequently, an additional premium of US$950
(calculation as below) is due to the Company.

Calculation: US$51, 525 X (11/365), US$950

a

MI other terms and conditions remain unchanged,

Insurance Company of North America

..:A A 7eve,

.Taipei
Branch 01,

t2

Authorised Signature
 Case 0:10-cv-00682-DWF-JSM Document 1-2 Filed 03/08/10 Page 1 of 1
t, JS 44 (Rev 12/07) CIVIL COVER SHEET
The TS 44 civil cover sheet and the information contained herein neither
replace nor supplement the filing and service ofpleadings 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

PETCO Animal Supplies Stores, Inc Insurance Company of North America

(b) County of Residence of F irst Listed Plaintiff San Diego County County of Residence of F irst 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) Attorney's (Firm Name, Address, and Telephone Number) Attorneys (If Known)
Henson & Efron, PA,, 220 South Sixth Street, Suite 1800,
612-339-2500 112
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)
O 1 U S Government 0 3 F ederal Question PIE DEF PIE DEE
Plaintiff (U S Gmemment Not a Party) Citizen of This State 0 1 0 I Incorporated or
Principal Place 0 4 0 4
of Business In This State

0 2 U S Government 2i 4 Diversity Citizen of Another State 0 2 0 and Principal Place /?4 X

2 Incorporated 5 5
Defendant of Business In Another State
(Indicate Citizenship of Parties in Item III)
Citizen or Subject of a 0 3 0 3 F oreign Nation 1 6 0 6
F oreign Country
IV. NATURE OF SUIT (Place an "X" in One Box Only)
CONTRACT TORTS FORFEITURE NALTY BANKRUPTCY
I TIlER STATUTES
Nt 110 Insurance PERSONAL INJURY PERSONAL INJURY 0 610 Agriculture 0 422 Appeal 28 USC 158 0 400 State Reapportionment
O 120 Marine 0 310 Airplane 0 362 Personal Injuly 0 620 Other F ood & Dmg 0 423 Withdrawal 0 410 Antitrust
O 130 Miller Act 0 315 Airplane Product Med Malpractice 0 625 Drug Related Seizure 1 430 Banks and
28 USC 157 Banking
O 140 Negotiable Instrument Liability 1 365 Personal Injury of Property 21 USC 881 0 450 Commerce
O 150 Recovery of Overpayment 0 320 Assault, Libel & Product Liability 0 I
630 Liquor Laws PROPERTYRIGHTS 0 460 Deportation
&Enforcement of Judgment Slander 0 368 Asbestos Personal 0 640 R R & Truck 0 820 Copyrights 0 470 Racketeer Influenced and
O 151 Medicare Act 0 330 Federal Employers' Injury Product 0 650 Airline Regs. 0 830 Patent Corrupt Organizations
O 152 Recovery of Defaulted Liability Liability 0 660 Occupational 0 840 Trademark 0 480 Consumer Ciedit
Student Loans 0 340 Marine PERSONAL PROPERTY Safety/Health 0 490 Cable/Sat TV
(Excl Veterans) 0 345 Marine Product 0 370 Other Fraud 0 690 Other 0 810 Selective Service
O 153 Recovery of Overpayment Liability 0 371 Truth in Lending LABOR SOCIAL SECURITY 0 850 Securities/Commodities/
of Veteran's Benefits 0 350 Motor Vehicle 0 380 Other Personal 0 710 Fair Labor Standards 0 861 HIA (1395ff) Exchange
O 160 Stockholders' Suits 0 355 Motor Vehicle Property Damage Act 0 862 Black I ung (923) 0 875 Customer Challenge
O 190 Other Contract Product L iability 0 385 Property Damage 0 720 Labor/Mgmt Relations 0 863 DIWC/DIWW (405(g)) 12 USC 3410
O 195 Contract Product L iability 0 360 Other Personal Product Liability 0 730 Labor/Mgmt Reporting 0 864 SSID Title XVI 0 890 Other Statutory Actions
O 196 Franchise Injury & Disclosure Act 0 865 RSI (405(g)) 0 891 Agricultural Acts
REAL PROPERTY CIVIL RIGHTS' PRISONER PETITIONS 0 740 Railway Labor Act FEDERAL TAX SUITS 0 892 Economic Stabilization Act
0 210 Land Condemnation 0 Voting
441 El 510 Motions to Vacate 0 790 Other Labor L itigation 0 870 Taxes (U S Plaintiff 0 893 Environmental Matters
0 220 Foreclosure 0 442 Employment Sentence 0 791 Empl Ret Inc 0
or Defendant) 894 Energy Allocation Act
0 230 Rent Lease & Ejectment 0 443 Housing/ Habeas Corpus: Security Act 0 871 IRS—Third Party 0 895 Freedom of Information
0 240 Torts to Land Accommodations 0 530 General 26 USC 7609 Act
0 245 Tort Product Liability 0 444 Welfare 0 535 Death Penalty IMMIGRATION 0 900Appeal of Fee Determination
0 290 All Other Real Property 0 445 Amer w/Disabilities 0 540 Mandamus & Other 0 462 Naturalization Application Under Equal Access
Employment 0 550 Civil Rights 0 463 Habeas Corpus to Justice
O 446 Amer w/Disabilities 0 555 Prison Condition Alien Detainee 0 950 Constitutionality of
Othet 0 465 Other Immigration State Statutes
O 440 Other Civil Rights Actions

V. ORIGIN (Place an "X" in One Box Only) Appeal to District

a1 0 2 Removed from Transferred from Ridge from
Original 0 3 Remanded from CI 4 Reinstated or 0,
another district 0 6 Multidistrict ri 7

Proceeding State Court Appellate Court Reopened Litigation Magistrate

(specify) Judgment
CAtbk Wtatute under which you are filing (Do not cite jurisdictional statutes unless diversity):
VI. CAUSE OF ACTION
Brief description of cause:
Defendant breached its contractual obligations to Plaintiff under a Products Liability Insurance Policy
VII. REQUESTED IN CI CHECK IF THIS IS A CLASS ACTION DEMAND CHECK YES only if demanded in complaint:
COMPLAINT: UNDER F R C P 23 2, 000, 000.00 JURY DEMAND: a Yes 0 No

VIII. RELATED CASE(S) (See instructions):

IF ANY JUDGE James M.. Rosenbaum DOCKET NUMBER 09-0363(JMR/JSM)
DATE SIGNATU OF ATTORNEY OF REC

03/08/2010
FOR OFFICE USE ONLY

RECEIPT 4 AMOUNT APPL YING IF P JUDGE MAG JUDGE