Seneca Insurance Company, Inc

SE N E C A QUOTATION AND OFFER OF TERRORISM INSURANCE COVERAGE; COMPANIES DISCLOSURE OF TERRORISM PREMIUM Underwriters with Experience

This constitutes part II of Seneca’s quote to the insured set forth below and is referred to herein as the Terrorism Offer and Disclosure Document (“TODD”); the TODD is not a valid offer and may not be accepted unless the insured also accepts all the terms and conditions of Part I of Seneca’s quote.

Date: 11/9/2006 Named Insured: Hotel Lebanon Corp Address: 25 South 9th St, Lebanon PA 17042 Producer: Insurance Markets

On November 26, 2002, the President of the United States signed into law the Terrorism Risk Insurance Act of 2002 (“TRIA”). As a result, the insured referred to the above has a right to purchase insurance coverage for Certified Acts of Terrorism as provided below.

The insured is hereby notified that under the Terrorism Risk Insurance Act of 2002, effective November 26, 2002, that the insured now has a right to purchase insurance coverage for losses arising out of 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 to human life, property, or infrastructure; to have resulted in damage within the Untied States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, 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. The foregoing are hereinafter called “Certified Acts of Terrorism.”

COVERAGE PROVIDED BY THIS POLICY FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM IS PARTIALLY REIMBURSED BY THE UNITED STATES UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. UNDER THIS FORMULA, THE UNITED STATES PAYS A PERCENTAGE OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGED FOR THIS COVERAGE IS PROVIDED HEREIN AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.

We are hereby offering insurance coverage for “Certified Acts of Terrorism.” This coverage is part of an not in addition to the Policy Limit otherwise available under the policy being quoted. Coverage for “Certified Acts of Terrorism” applies to loss or damage of the type covered under the policy resulting directly or indirectly from “Certified Acts of Terrorism.” There is no coverage for any loss or damage resulting from terrorist acts that are not

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“Certified Acts of Terrorism.” If the insured is being offered property coverage, then in the states set forth below, a decision to reject coverage for “Certified Acts of Terrorism” still continues mandatory fire coverage for fire losses resulting from an act of terrorism. However, this exception for fire applies only to direct loss or damage to covered property. Therefore, if the insured rejects the offer of coverage for “Certified Acts of Terrorism,” that rejection does not apply to direct loss or damage from fire losses resulting from an act of terrorism – the mandatory coverage in the fire portion of the policy for such fire losses will continue. This applies in the following states: Arizona, California, Connecticut, Georgia, Hawaii, Idaho, Illinois, Iowa, Maine, Massachusetts, Missouri, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, Washington, Wisconsin and West Virginia.

Under TRIA, neither we nor the Federal government will be responsible for the payment of any insured losses under TRIA which are in excess of $100 billion for any year or portion thereof in which TRIA is in effect.

If the insured is in any of the states set forth above and declines coverage for Certified Acts of Terrorism, the insured will nevertheless have mandatory coverage for direct loss or damage to covered property from fire as a result of an act of terrorism even though the insured has elected not to purchase coverage for Certified Acts of terrorism. However, the insured will be required to pay a premium for this coverage, as follows:

A. Mandatory Coverage for Direct Loss or Damage From Fire to Covered Property $ 100

If the insured wishes to purchase full coverage for Certified Acts of Terrorism, the insured will be required to pay a premium for this coverage, as follows:

B. Full Coverage for Certified Acts of Terrorism (Optional) $ 395

Notice to Seneca Producers: The Treasury Department Interim Guidance dated December 3, 2002, provides that “in many situations, commercial property and casualty insurance is procured for policy holders through an insurance broker or other intermediary … if the normal form of communication between an insurer and the policyholder is through an insurance broker … an insurer may provide the Act’s required disclosures through such agents”. We are using this method of communication because of your customer’s reliance on you, acting as agent for insurance procurement and in order to best preserve the relationship between the customer and their agent. Kindly forward a copy of this notice to your customer.

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