# FIRST STATE INSURANCE COMPANY

## CONDITIONS

1. **Premium Calculation**: The deposit premium stated in the declaration is an advance premium only unless otherwise agreed upon. Upon termination of this policy, the earned premium shall be computed in accordance with the rate and maximum premium applicable to this insurance as stated in the Declaration. If the advance premium paid by the Company exceeds the advance premium paid, the Named Insured shall pay the excess to the Company; or less, the Company shall return to the Named Insured the unearned portion paid by such Insured.

2. **Inspection and Audit**: The Company shall be permitted but not obligated to inspect the Named Insured's books and operations at any time. Neither the Company's right to make inspections nor the inspection thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the Named Insured or others, to determine or warrant that such property or operations are safe. The Company may examine and audit the Named Insured's books and records at any time during the policy period and 30 days thereafter and within two years after the final termination of this policy, so long as they relate to the subject matter of this insurance.

3. **Action Against Company**: No action shall lie against the Company unless, as a condition precedent, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Company's obligation to pay shall have been determined either by judgment, arbitration, or the insured after actual trial or by written agreement of the Insured, the Company, and the Company's counsel.

4. **Subrogation**: In the event of a settlement under this policy, the Company shall be subrogated to all the Insured's rights of recovery therefrom against any person or organization and the Insured shall execute and deliver instruments and papers and do whatever else necessary to secure such rights. The Insured shall do nothing after loss to prejudice such rights.

5. **Execution and Attestation**: In witness whereof, the company has caused this policy to be executed and attested, but this policy shall not be valid unless countersigned by a duly authorized representative of the company.

**Michael J. Weber**
Secretary

**Richard E. Stone**
President