QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
________________________________________
(X) Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended March 25, 1995
or
( ) Transition Report Pursuant to Section 13 of 15(d) of
the Securities Exchange Act of 1934
For the transition period from
__________ to __________
___________________________________________
Commission file number 1-7737
I.R.S. Employer Identification Number 04-1449115
ARROW AUTOMOTIVE INDUSTRIES, INC.
(a Massachusetts Corporation)
3 Speen Street
Framingham, MA 01701
Telephone: (508) 872-3711
Indicate by check mark whether the registrant (1) has filed
all reports to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X No _____
Indicated the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date: 2,872,395 shares of the Company's Common
Stock ($.10 par value) were outstanding as of March 25,
1995.
PAGE 1 of 46
<PAGE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited):
Condensed Balance Sheets -
March 25, 1995 and June 25, 1994 3
Condensed Statements of Operations -
Three Months Ended March 25, 1995 and
March 26, 1994 4
Nine Months Ended March 25, 1995 and
March 26, 1994 5
Condensed Statements of Cash Flows -
Nine Months Ended March 25, 1995 and
March 26, 1994 6
Notes to Condensed Financial Statements 7 - 8
ITEM 2. Management's Discussion and Analysis of the
Financial Condition and Results of
Operations 9 - 10
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 11
ITEM 2. Changes in Securities 11
ITEM 3. Default upon Senior Securities 11
ITEM 4. Submission of Matters to a Vote of Securities
Holders 11
ITEM 5. Other Information 11
ITEM 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
Page 2
<PAGE>
PART I.
ITEM 1. FINANCIAL INFORMATION
<TABLE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION> MARCH 25, JUNE 25,
1995 1994
____________ ____________
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 305,733 $ 445,320
Accounts receivable, less allowances 10,968,916 15,661,427
Inventories - Note B 37,367,358 37,433,020
Prepaid expenses and other current
assets 2,689,989 3,292,477
____________ ____________
TOTAL CURRENT ASSETS 51,331,996 56,832,244
PROPERTY, PLANT AND EQUIPMENT 34,611,137 33,186,481
Less allowances for depreciation 22,078,357 21,134,125
____________ ____________
12,532,780 12,052,356
OTHER ASSETS 1,985,572 2,236,194
____________ ____________
TOTAL ASSETS $ 65,850,348 $71,120,794
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of advances under
revolving line of credit - Note C $ 9,826,376 $ 10,219,446
Accounts payable 1,927,574 3,951,308
Cash overdrafts 1,605,227 907,095
Other current liabilities 3,964,301 6,680,146
Current portion of long-term debt 1,367,278 1,372,538
____________ ____________
TOTAL CURRENT LIABILITIES 18,690,756 23,130,533
LONG-TERM DEBT - Note C 10,713,357 11,732,234
DEFERRED INCOME TAXES 1,631,000 1,631,000
ACCRUED OTHER 1,971,637 1,653,287
STOCKHOLDERS' EQUITY
Common stock 296,817 296,767
Other stockholders' equity 32,996,029 33,126,221
Less cost of Common Stock in treasury 449,248 449,248
____________ ____________
TOTAL STOCKHOLDERS' EQUITY 32,843,598 32,973,740
____________ ____________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 65,850,348 $ 71,120,794
============ ============
See accompanying notes to the condensed financial statements.
</TABLE>
Page 3.
<PAGE>
<TABLE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION> THREE MONTHS ENDED
_________________________
MARCH 25, MARCH 26,
1995 1994
(12 weeks) (13 weeks)
____________ ____________
<S> <C> <C>
Net sales $ 19,820,409 $ 25,199,362
Interest income 11,310 7,762
____________ ____________
19,831,719 25,207,124
Costs and expenses:
Cost of products sold 15,037,720 18,525,081
Selling, administrative and general
operating expenses 5,524,400 5,707,380
Interest expense 479,195 400,808
____________ ____________
21,041,315 24,633,269
____________ ____________
Income (loss) before income taxes (1,209,596) 573,855
Provision (benefit) for income taxes (461,000) 219,000
____________ ____________
NET INCOME (LOSS) $ (748,596) $ 354,855
============ =============
Weighted average number of shares 2,872,395 2,818,477
outstanding ============ =============
Income (loss) per share $ (.26) $ 0.13
======= ======
See accompanying notes to the condensed financial statements.
</TABLE>
Page 4.
<PAGE>
<TABLE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION> NINE MONTHS ENDED
_________________________
MARCH 25, MARCH 26,
1995 1994
(39 weeks) (39 weeks)
____________ ___________
<S> <C> <C>
Net sales $ 81,800,935 $ 79,884,244
Interest income 26,737 23,453
____________ ____________
81,827,672 79,907,697
Costs and expenses:
Cost of products sold 62,243,079 59,826,229
Selling, administrative and general
operating expenses 18,363,833 16,675,604
Interest expense 1,440,090 1,227,934
____________ ____________
82,047,002 77,729,767
____________ ____________
Income (loss) before income taxes and
extraordinary item (219,330) 2,177,930
Provision (benefit) for income taxes (84,000) 828,000
____________ ____________
Income (loss) before extraordinary item (135,330) 1,349,930
Extraordinary charge from refinancing
of debt, net of income tax benefit
of $169,000 0 275,985
____________ ____________
Net income (loss) $ (135,330) $ 1,073,945
============ ============
Weighted average number of shares 2,872,201 2,815,416
outstanding ============ ============
PER SHARE DATA
- --------------
Income (loss) before extraordinary item $ (.05) $ 0.48
Extraordinary charge from refinancing
of debt, net of income tax benefit of
$.06 0.00 0.10
______ ______
NET INCOME (LOSS) $ (.05) $ 0.38
====== ======
See accompanying notes to the condensed financial statements.
</TABLE>
Page 5.
<PAGE>
<TABLE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION> NINE MONTHS ENDED
_________________________
MARCH 25, MARCH 26,
1995 1994
(39 weeks) (39 weeks)
____________ ____________
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by (used in)
operating activities $ 2,808,215 $ (1,863,711)
____________ ____________
INVESTING ACTIVITIES
Net cash used in investing activities (1,535,782) (473,344)
____________ ____________
FINANCING ACTIVITIES
Proceeds from excercise of stock
options and related tax benefits 5,188 82,587
Payments of long-term debt and capital
lease obligations (1,024,138) (914,526)
Indebtedness repaid, principally with
the proceeds from the replacement
financing (20,134,246)
Replacement financing proceeds 21,456,514
Net increase (decrease) in advances
under revolving line of credit (393,070) 1,890,496
____________ ____________
Net cash provided by (used in)
financing activities (1,412,020) 2,380,825
____________ ____________
Increase (decrease) in cash and
equivalents (139,587) 43,770
____________ ____________
Cash and equivalents at beginning of
period 445,320 439,466
____________ ____________
CASH AND EQUIVALENTS AT END OF PERIOD $ 305,733 $ 483,236
============ ============
See accompanying notes to the condensed financial statements.
</TABLE>
Page 6.
<PAGE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A -- BASIS OF PRESENTATION
- -------------------------------
The accompanying unaudited condensed financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
nine month period ended March 25, 1995 are not necessarily
indicative of the results that may be expected for the year
ending June 24, 1995. For further information, refer to the
financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June
25, 1994. The balance sheet at June 25, 1994 has been
derived from the audited financial statements at that date.
NOTE B -- INVENTORIES
- ---------------------
<TABLE>
The components of inventory consist of the following:
<CAPTION>
MARCH 25, JUNE 25,
1995 1994
------------ ------------
<S> <C> <C>
Stated at cost on first-in, first-out
(FIFO) method:
Finished goods $ 9,781,847 $ 11,027,263
Work in process and materials 33,605,511 32,425,757
____________ ____________
43,387,358 43,453,020
Less reserve required to state
inventory on the last-in,
first-out (LIFO) method 6,020,000 6,020,000
____________ ____________
$ 37,367,358 $ 37,433,020
============ ============
</TABLE>
Page 7.
<PAGE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
NOTE C -- LONG-TERM DEBT AND CREDIT ARRANGEMENTS
- ------------------------------------------------
On December 29, 1993, the Company entered into an agreement
with a commercial bank to provide replacement financing of
its existing credit line and term loan. The replacement
financing consists of a $20 million revolving line of credit
and a $9 million term loan. The difference between amounts
paid to retire the existing indebtedness and the related
carrying amounts, principally the unamortized balance of
debt issue costs and early payment of penalties which
totalled $275,985, net of an income tax benefit of $169,000,
has been reflected as an extraordinary charge in the
accompanying statements of income.
Page 8.
<PAGE>
PART I
Item 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company sustained a net loss for the third quarter of
fiscal 1995 of $748,596 on net sales of $19,820,409. This
compares to net income for the comparable period of the
prior fiscal year of $354,855 on net sales of $25,199,362.
Operating results for the nine months ended March 25, 1995,
were a net loss of $135,330 on net sales of $81,800,935
compared to net income of $1,073,945 on net sales of
$79,884,244 for the same period in fiscal 1994. The prior
year's net income included an extraordinary charge to income
of $275,985, net of tax benefit of $169,000. The net loss
in the third quarter and the first nine months of the
current year was primarily due to the decline in net sales
in the third quarter and an increase in selling, general and
administrative expenses in the current fiscal year, which
are discussed below.
In the third quarter of fiscal 1995, net sales were down
21.3% from the net sales of the third quarter of the prior
fiscal year, and fell off sharply from the net sales
attained in the first and second quarters of the current
fiscal year. Unit sales declined correspondingly with the
decline in net sales dollars. The decline in net sales in
the third quarter of the current fiscal year relative to the
comparable period of the prior fiscal year was primarily
attributable to the impact of the mild winter, and a twelve
week current fiscal quarter compared to thirteen weeks in
the corresponding period last year. In addition, the
Company had a loss of several customer accounts, impacting
the current quarter's net sales by approximately $1.2
million. Also adversely impacting net sales for the third
quarter was the Company's installation of a new raw material
cleaning system in its Spartanburg, South Carolina
manufacturing facility, which reduced customer shipments
during the first week of January of 1995.
The gross margin percentage for the third quarter of fiscal
1995 was 24.1% of net sales, down from the gross margin
percentage of 26.5% for the same period last year. The
gross margin percentage for the first nine months of fiscal
1995 was 23.9%, compared to 25.1% for the same period last
fiscal year. The gross margin percentages in the first
three quarters of the current fiscal year were 23.5%, 24.3%
and 24.1%, respectively. Manufacturing inefficiencies
related to low sales volume contributed to the decline in
gross margin in the current year's third quarter. On a year
to date basis, the decline in the gross margin percentage
compared to the prior year was due to manufacturing
inefficiencies as noted above, as well as to higher material
costs which were incurred early in the fiscal year.
Page 9.
<PAGE>
Selling, general and administrative expenses for the third
quarter of fiscal 1995 were $5,525,400, compared to
$5,707,380 in the comparable period in fiscal 1994. As a
percentage of sales, SG&A expense increased to 27.9% of net
sales for the third quarter of fiscaol 1995 from 22.6% in
the third quarter of fiscal 1994. Similarly, for the nine
months ended March 25, 1995, selling, general and
administrative expenses of $18,363,833, or 22.4% of net
sales, increased from the spending level of $16,675,604, or
20.9% of net sales in the prior fiscal year. During the
first nine months of the current fiscal year, the Company
experienced increased business acquisition costs relative to
the comparable period of the prior fiscal year of $867,000,
of which $187,000, was incurred in the third quarter. Also
during the current fiscal year, the Company invested in the
development of new marketing programs which resulted in
additional expense of $350,000, of which $157,000 was
incurred in the third quarter of the current fiscal year.
Net interest expense in the third quarter of fiscal 1995 was
$467,885, an increase of 19.0% over the same period in
fiscal 1994. On a year to date basis, net interest expense
increased 17.3% over the first nine months of the prior
fiscal year. Higher borrowing levels and higher interest
rates resulted in the additional net interest expense
incurred in the current year.
Accounts receivable declined during the third quarter of
fiscal 1995 consistent with reduced sales volume, while
inventory, particularly finished goods, increased during the
third quarter. Trade payables for the period declined with
tighter spending controls. Purchases of property, plant and
equipment continued as planned during the quarter. A
significant portion of capital expenditures relate to the
replacement of raw material cleaning systems at all three
manufacturing locations.
As previously reported in the Company's Annual Report on
Form 10-K for its fiscal year ended June 25, 1994, the
Company has a financing agreement with a commercial bank
relating to credit arrangements provided to the Company by
that institution consisting of a $20 million revolving line
of credit and a term loan which had a principal balance as
of March 25, 1995 of $7,714,286. The debt service covenant
of this financing agreement was amended during the third
quarter of fiscal 1995 such that the loss sustained by the
Company during the quarter did not result in a breach of
that covenant.
The Company anticipates that operating revenues and existing
credit lines will be adequate to finance its operations
through the completion of the fiscal year.
Page 10.
<PAGE>
ARROW AUTOMOTIVE INDUSTRIES, INC.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Default upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports on Form 8-K.
A. Exhibits
Exhibit 10.1 First Amendment to Revolving
Credit and Term Loan Agreement with
The First National Bank of Boston
dated as of March 24, 1995 Page 13
Exhibit 10.2 Director and Officers Liability
Insurance Policy and Excess Policy Page 16
Exhibit 27. Financial Data Schedule Page 46
B. Reports on Form 8-K
No reports have been filed on Form 8-K during this
quarter.
Page 11.
<PAGE>
PART II. OTHER INFORMATION
ARROW AUTOMOTIVE INDUSTRIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
ARROW AUTOMOTIVE INDUSTRIES, INC.
(Registrant)
May 5, 1995 /s/ Jim L. Osment
-------------------------------------
President and Chief Executive Officer
May 5, 1995 /s/ James F. Fagan
-------------------------------------
Executive Vice President and
Chief Financial Officer
Page 12.
<PAGE>
<PAGE>
Page 13
ARROW AUTOMOTIVE INDUSTRIES, INC.
FIRST AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS FIRST AMENDMENT, dated as of March 24, 1995,
by and between Arrow Automotive Industries, Inc. (the "Borrower")
and The First National Bank of Boston (the "Bank") as parties to a
certain Revolving Credit and Term Loan Agreement, dated as of
December 29, 1993 (the "Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the same meanings ascribed
thereto in the Credit Agreement.
WHEREAS, the Borrower has requested the Bank to make
certain amendments to the Credit Agreement; and
WHEREAS, the Bank is willing to make such
amendments to the Credit Agreement subject to the terms
and conditions set forth herein.
NOW THEREFORE, the Borrower and the Bank hereby
covenant and agree as follows:
1. Amendment to Credit Agreement. The Credit
Agreement is hereby amended by:
(a) deleting the definition of "Total Debt Service"
contained in paragraph 1.1 of the Credit Agreement and restating
it in its entirety as follows:
Total Debt Service. For any period, the sum of
Total Interest Expense plus twenty-five percent
(25%) of Current Financial Obligations.
(b) deleting paragraph 11.2 and restating it in its entirety as
follows:
Paragraph 11.2 Debt Service. The Borrower will not
permit, as at the end of each fiscal quarter,
the ratio of (a) the sum of (i) Net Income,
plus (ii) Total Interest Expense, plus (iii)
depreciation, plus (iv) amortization to (b)
Total Debt Service to be less that 1.20:1.00
commencing with the fiscal quarter ended June
24, 1995.
2.Conditions to Effectiveness. This First Amendment
shall be effective as of March 24, 1995, upon satisfaction of the
following conditions:
(a) This First Amendment shall have been duly and
properly executed and delivered to the Bank by the Borrower; and
(b) All corporate action necessary for the valid
execution, delivery and performance by the Borrower of this First
Amendment and the Credit Agreement as amended hereby shall have
been duly and effectively taken, and evidence thereof satisfactory
to the Bank shall have been provided to the Bank.
3.Representations and Warranties. The Borrower, hereby
represents and warrants to the Bank as follows:
(a) Representations and Warranties in Credit Agreement.
The representations and warranties of the Borrower contained in the
Credit Agreement (i) were true and correct in all material respects
when made, and (ii) except to the extent such representations and
warranties by their terms are made solely as of a prior date,
continue to be true and correct in all material respects on the
date hereof.
(b) Ratification, Etc. Except as expressly provided by
this First Amendment, the Credit Agreement and all documents,
instruments and agreements related thereto, including, but not
limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and
effect. The Credit Agreement and this First Amendment shall be
read and construed as a single agreement. All references in the
Credit Agreement or any related agreement or instrument to the
Credit Agreement shall hereafter refer to the Credit Agreement as
amended hereby.
(c) Authority, Etc. The execution and delivery by the
Borrower of this First Amendment and the performance by the
Borrower of all of its agreements and obligations under the Credit
Agreement as amended hereby are within the corporate authority of
the Borrower and have been duly authorized by all necessary
corporate action on the part of the Borrower.
(d) Enforceability of Obligations. This First Amendment
and the Credit Agreement as amended hereby constitute the legal,
valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their terms.
(e) No Default. No Default or Event of Default has
occurred and is continuing, and no Default or Event of Default will
exist after execution and delivery of this First Amendment.
4.No Other Amendments or Waivers. Except as expressly
provided in this First Amendment, all of the terms and conditions
of the Credit Agreement and the other Loan Documents remain in full
force and effect.
5.Expenses. Pursuant to paragraph 16 of the Credit Agreement,
all costs and expenses incurred or sustained by the Bank in
connection with this First Amendment, including the fees and
disbursements of legal counsel for the Bank in producing,
reproducing and negotiating the First Amendment, will be for the
account of the Borrower whether or not the transactions
contemplated by this First Amendment are consummated.
6.Execution in Counterparts. This First Amendment may
be executed in any number of counterparts, each of which shall be
deemed an original, but which together shall constitute one
instrument.
7.Miscellaneous. THIS FIRST AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). The
captions in this First Amendment are for convenience of reference
only and shall not define or limit the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
First Amendment under seal as of the date first set forth above.
ARROW AUTOMOTIVE INDUSTRIES, INC.
By: /s/ James F. Fagan
Name:James F. Fagan
Title:Executive Vice President, Treasurer
and Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Matthew A. Ross
Matthew A. Ross, Vice President
<PAGE> Page 16
EXHIBIT 10.2
ROYAL INSURANCE
Executive Offices: 9300 Arrowpoint Blvd.
Charlotte, NC 28217
DIRECTORS AND OFFICERS LIABILITY AND
COMPANY REIMBURSEMENT COVERAGE
NOTICE: THIS IS A CLAIMS MADE INDEMNITY POLICY WHICH APPLIES
ONLY TO CLAIMS FIRST MADE, AND REPORTED TO ROYAL
DURING THE POLICY PERIOD (AGAINST THE INSURED
PERSONS FOR A WRONGFUL ACT).
NOTICE: THE LIMIT OF LIABILITY IS DEPLETED BY AMOUNTS
INCURRED FOR DEFENSE FEES AND EXPENSES. AMOUNTS
INCURRED FOR DEFENSE EXPENSES SHALL BE APPLIED
FIRST AGAINST THE RETENTION AMOUNT.
NOTICE: INSURER HAS NO DUTY TO PROVIDE A DEFENSE FOR ANY
INSURED PERSON OR THE INSURED ORGANIZATION.
PLEASE READ CAREFULLY
CLAIM NOTICE
Please notify Royal Specialty Underwriting,Inc.
of all claims.
Royal Specialty Underwritings, Inc.
945 East Paces Ferry Road
Suite 1890
Atlanta, GA 30326
Attention: Claims Department
RSUIFP-RI-00001 (Ed. 4/93)
IN CONSIDERATION of the payment of premium and in reliance
upon all statements made and information furnished to the
Royal Indemnity Company, (a stock insurance company,
hereinafter called the Insurer) including the statements
made in the Application attached hereto and made a part
hereof, and subject to the terms, conditions, definitions,
exclusions and limitations hereinafter provided, the Insurer
agrees:
SECTION 1. INSURING CLAUSE
(A) with the Insured Persons of the Insured Organization that if during
the Policy Period, any Claim or Claims are first made against the
Insured Persons and reported in accordance with Section 4,
Condition (G) of this policy, jointly or severally, for a Wrongful
Act, the Insurer will pay on behalf of such Insured Persons all
Loss which such Insured Persons shall become legally obligated to
pay.
(B) with the Insured Organization that if during the Policy Period,
any Claim or Claims are first made against the Insured Persons
and reported in accordance with Section 4. Condition (G) of this
policy, jointly or severally, for a Wrongful Act, the Insurer will
pay on behalf of the Insured Organization, all Loss for which the
Insured Organization is required or permitted to indemnify the
Insured Persons pursuant to law, common or statutory, or the
Charter or By-laws of the Insured Organization duly effective
under such laws which determines and defines such rights to
indemnify.
SECTION 2. DEFINITIONS
(A) "Application" means the Application attached to and forming part
of this policy, including any materials submitted as part of the
Application process which are on file with the Insurer and which
form part of the policy, whether physically attached or not.
(B) "Claim" means written or oral demand for money or services received
by an Insured Person that any person or entity intends to hold any
Insured Person responsible for a Wrongful Act.
(C) "Defense Expenses" means reasonable legal fees and expenses
incurred, with the written consent of the Insurer, by an Insured
Person in defense of a Claim, including appeal, except that
Defense Expenses shall not include: (1) remuneration, overhead
or benefit expenses associated with any Insured Person; and
(2) any amounts incurred in defense of any Claim including appeal
for which any other insurer has a duty to defend, regardless of
whether or not such other insurer undertakes such duty; and
(3) any obligation to apply for, procure or provide security
for any appellate or similar bond.
(D) "Insured Organization" means the organization named in
Item 1 of the Declarations and any Subsidiary existing prior
to or at the inception date of this policy and listed on the
Named Insured Endorsement attached to this policy. In addition,
Insured Organization shall mean any Subsidiary created or
acquired after the inception date of the policy subject to Section 4.
Condition
(E) "Insured Person" means any past, present or future director or
officer, and in the event of the death, incapacity or bankruptcy
of an Insured Person, the estate, heirs, legal representatives
or assigns of such individual.
(F) "Loss" means any amount for settlement, damages or judgment,
including Defense Expenses, in excess of the applicable retention
and not exceeding the limit of liability, as listed on the
Declarations Page, which an Insured Person is legally obligated
to pay as a result of a Claim. Loss does not include sanctions,
punitive or exemplary damages, the multiplied portion of any
multiplied damage award, matters which are uninsurable under the
law pursuant to which this policy shall be construed, fines,
taxes or penalties.
(G) "Policy Period" means the period from the inception date to the
expiration date in Item 2 of the Declarations Page or to any
earlier cancellation or termination date. Any extension of
coverage under Section 4. Condition (E) will be part of and not
in addition to the Policy Period.
(H) "Subsidiary" means a corporation of which the Insured Organization
owns more than fifty percent (50%) of the voting stock.
(I) "Wrongful Act" means any actual or alleged error, omission,
misstatement, misleading statement, neglect or breach of duty by
an Insured Person solely in their capacity as an Insured Person
acting on behalf of the Insured Organization.
SECTION 3. EXCLUSIONS
(A) Except for Loss for which the Insured Organization is
required to indemnify the Insured Persons, or for which the
Insured Organization has, to the extent permitted by law,
indemnified the Insured Persons, the Insurer shall not be liable to
make any payment for Loss in connection with any Claim made
against the Insured Persons:
(1) based upon or attributable to any Insured Person gaining in
fact of any personal profit or advantage to which such Insured
Person was not legally entitled;
(2) for return by the Insured Persons of any remuneration paid
to the Insured Persons without the previous approval of the
governing bodies of the Insured Organization, which payment,
without such previous approval, shall be held by the Courts
to be in violation of law;
(3) based upon, arising out of or attributable to profits in fact
made from the purchase and sale or sale and purchase by the
Insured Persons of securities of the Insured Organization
within the meaning of Section 16(b) of the Securities Exchange
Act of 1934 and amendments thereto or similar provisions of
any state statutory law or common law;
(4) brought about or contributed to by the dishonesty of the
Insured Persons. However, notwithstanding the foregoing, the
Insured Persons shall be protected under the terms of this
policy as to any Claims upon which suit may be brought against
them, by reason of any alleged dishonesty on the part of the
Insured Persons unless a judgment or other final adjudication
thereof adverse to the Insured Persons shall establish that
acts of active and deliberate dishonesty committed by the
Insured Persons with actual dishonest purpose and intent were
material to the cause of action so adjudicated.
NOTE: The Wrongful Act of any Insured Person shall not be imputed
to any other Insured Person for the purpose of determining
the applicability of the exclusions enumerated in Section
3. Exclusions (A).
(B) The Insurer shall not be liable to make any payment for Loss in
connection with any Claim made against the Insured Persons:
(1) for actual or alleged (a) bodily injury, sickness, disease,
or death of any person, assault, battery, mental anguish, or
emotional distress; or (b) damage to or destruction of any
tangible property including loss of use thereof; or (c)
invasion of privacy, wrongful entry, eviction, false arrest,
false imprisonment or malicious prosecution;
(2) for libel, slander or defamation in any form;
(3) for any actual or alleged violations of the Employee
Retirement Income Security Act of 1974 or any regulations
promulgated thereunder, or of any similar provisions of any
federal, state or local law or regulation;
(4) alleging, arising out of, based upon, attributable to, or in
any way involving, directly or indirectly:
(a) the actual, alleged or threatened discharge, dispersal,
release or escape of pollutants, or
(b) any direction or request to test for, monitor, clean up,
remove, contain, treat, detoxify or neutralize
pollutants,
Including but not limited to Claims alleging damage to the
Insured Organization;
Pollutants includes (but is not limited to) any solid, liquid,
gaseous or thermal irritant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis, chemicals and waste.
Waste includes (but is not limited to) materials to be
recycled, reconditioned or reclaimed;
(5) by an Insured Person or Insured Organization, as defined in
this policy, except:
(a) for stockholder's derivative actions brought by a
shareholder of the Insured Organization other than an
Insured Person;
(b) a Claim brought by an officer who is not a Director for
their alleged wrongful termination;
(6) based upon or attributable to, or arising out of, or in any
way involving:
(a) payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
domestic or foreign governmental or armed services
officials, agents, representatives, employees or any
members of their family or any entity with which they
are affiliated; or
(b) payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
officials, directors, agents, partners, representatives,
principal shareholders, or owners or employees, or
affiliates (as that term is defined in the Securities
Exchange Act of 1934, including any of their officers,
directors, agents, owners, partners, representatives,
principal shareholders or employees) of any customers
of the Insured Organization or any members of their
family or any entity with which they are affiliated; or
(c) Political Contributions, whether domestic or foreign;
(7) based upon or attributable to any failure or omission on the
part of the Insured Person to effect and maintain adequate
insurance;
(8) based upon or attributable to the essential fact underlying
or alleged in any matter which prior to the inception date
of this policy has been the subject of notice to any Insurer
of a Claim, or a threat of Claim, or an occurrence which might
give rise to a Claim under any policy of which this insurance
is a renewal or replacement or which it may succeed in time;
(9) based upon, arising out of directly or indirectly resulting
from, in consequence of, or in any way involving service by
an Insured Person as a director or officer of any entity other
than the Insured Organization even if such service is directed
or requested by the Insured Organization;
(10) alleging, arising out of, based upon or attributable to the
ownership, management, maintenance and/or control by the
Insured Organization of any captive insurance company or
entity including but not limited to Claims alleging the
insolvency or bankruptcy of the Insured Organization named
in Item 1 of the Declarations as a result of such ownership,
operation, management and control;
(11) based upon or in any way involving any offer to purchase, or
purchase of, securities of the Insured Organization at a
premium over their then current market value; made by the
Insured Organization or by any of the Insured Persons, except
where such offer or purchase extends to all security holders
of the Insured Organization;
(12) based upon or any way involving actual or alleged:
(1) attempts whether successful or unsuccessful, by any
person or entity to acquire securities of the Insured
Organization, in opposition to the Board of Directors of the
Insured Organization, or (2) efforts, whether successful or
unsuccessful, by the Insured Organization or any of its
Insured Persons to resist such attempts;
SECTION 4. CONDITIONS
(A) INDEMNITY PAYMENT FOR DEFENSE EXPENSES; INSURER HAS NO DUTY TO
PROVIDE DEFENSE
(1) It is the duty of the Insured Person and not the duty of the
Insurer to provide for a defense of Claims against them. The
Insurer shall indemnify the Insured Person or Insured
Organization for Defense Expenses after final disposition of
a covered Claim. No Defense Expenses shall be incurred and no
settlement of any Claim shall be made without the Insurer's
written consent; such consent not to be unreasonably withheld.
Any Defense Expenses incurred or settlements made without the
written consent of the Insurer will not be covered under this
policy.
(2) Under Section 1. Insuring Clause (A), (B), the Insurer may,
upon written request by an Insured Person, pay on a current
basis Defense Expenses which are otherwise payable under this
policy except to the extent that the Insured Organization is
required or permitted to indemnify the Insured Person for such
Defense Expenses.
(3) Under Section 1. Insuring Clause (B), The Insurer may, upon
written request by the Insured Organization, reimburse on a
current basis Defense Expenses which are otherwise payable
under this policy.
(4) Any Insured Person or the Insured Organization requesting that
the Insurer pay on a current basis Defense Expenses for a
claim hereunder must agree in writing, prior to any payment
of Defense Expenses by the Insurer, that upon demand the
Insured Person or the Insured Organization or both will repay
the Insurer all Defense Expenses paid to or on behalf of such
Insured Person in connection with such Claim if the Insurer
determines that there is no coverage under Insuring Clause
(A) or (B).
(5) The Insured Organization and the Insured Persons shall give
the Insurer the right to associate itself in the defense and
settlement of any Claim that appears reasonably likely to
involve the Insurer.
(B) OTHER INSURANCE; OTHER INDEMNIFICATION
In the event that:
(1) there is any other insurance, whether prior or subsequent
to this policy, directly or indirectly covering or insuring
any Wrongful Act by an Insured Person otherwise covered by
this policy, or
(2) there is indemnification to which an Insured Person is
entitled from any entity other than the Insured Organization,
then all other insurance or indemnification shall apply first to
the noticed Claim and this policy shall not be considered
contributing but will indemnify only the difference between all
amounts recoverable under all other insurance or indemnification
and the amounts of any Loss otherwise covered under this policy,
not exceeding the limit of liability shown on the Declarations
Page and subject to all policy provisions. In the event there is
other insurance or indemnity available to the Insured Person or
Insured Organization, then this insurance shall provide specific
excess coverage only and shall not be subject to the terms of any
other insurance or indemnity.
(C) LIMIT OF LIABILITY; RETENTION; PAYMENT OF LOSS
(1) The amount stated in Item 3 of the Declaration is the maximum
aggregate limit of liability under the policy and the total
amount the Insurer shall be obligated to indemnify under the
policy whether under Section 1. Insuring Agreements (A) or
(B) or both, regardless of the time of payment by the Insurer.
Defense Expenses shall be part of and not in addition to the
limit of liability, and payment of Defense Expenses by the
Insurer will deplete the limit of liability.
(2) All Claims based on, arising out of, directly or indirectly
resulting from, in consequence of, or in any way involving
the same or related facts, circumstances, situations,
transactions or events, or the same or related series of
facts, circumstances, situations, transactions or events,
shall be deemed to be a single Claim.
(3) If Loss from a Claim is covered under more than one Insuring
Clause, the application retention stated in Item 4 of the
Declarations Page shall be applied separately to that part of
the Loss covered by each Insuring Clause, and the sum of such
retentions shall be the retention applicable to such Claim.
However, the total retention shall not exceed the largest
retention stated in Item 4 of the Declarations Page.
(4) The company reimbursement RETENTION and SECTION 1 INSURING
CLAUSE (B) shall be applicable to all Claims whenever
indemnification by the Insured Organization is legally
permissible or statutorily required, whether or not the
Insured Organization has agreed to indemnify its Insured
Persons or not, except where actual indemnification cannot
be made by the Insured Organization to its Insured Persons
solely by reason of the Insured Organization's financial
insolvency.
(5) Except for the payment of Defense Expenses as provided in
Section 4. Conditions (A), (2) and (3), the Insurer shall
indemnify for Loss only upon the final disposition of any
Claim.
(D) COOPERATION; SUBROGATION
In the event of a Claim or notice of circumstances under Section
4. Conditions (G), (1), (2), the Insured Person will provide the
Insurer with all information, assistance and cooperation that the
Insurer reasonably requests, and will take no action that may
prejudice the Insured Persons or Insurer's position or potential
or actual rights or defense under the policy without the Insurer's
consent. In the event of payment by the Insurer, it shall be
subrogated to all of the rights of recovery of the Insured Persons,
who shall execute all papers and take all necessary actions to
secure such rights, including the execution of any documents
necessary to enable the Insurer effectively to bring suit in the
Insured Persons name.
Any amount so recovered shall be apportioned for the repayment
of; first, the Insurer's subrogation expenses, legal fees and
costs; second, payments by the Insured Person or Insured
Organization in excess of the retention and applicable insurance;
third, payments by an excess insurer; fourth, payments by the
Insurer; and last, reimbursement of the retention.
(E) DISCOVERY PERIOD
If the Insurer shall cancel or refuse to renew this policy the
Insured Organization shall have the right, upon payment of an
additional premium of fifty percent (50%) of the Full Annual
Premium, to a period of ninety (90) days following the effective
date of such cancellation or nonrenewal (herein referred to as the
Discovery Period) in which to give written notice to the Insurer
of claims first made against the Insured Persons during said
ninety (90) day period for any Wrongful Act occurring prior to the
end of the Policy Period and otherwise covered by this policy.
As used herein, Full Annual Premium means the premium level in
effect immediately prior to the end of the Policy Period.
The rights contained in this clause shall terminate unless written
notice of such election, together with the additional premium,
is received by Royal Specialty Underwriting, Inc. at the address
shown on the Declarations Page within ten (10) days of the
effective date of cancellation or nonrenewal. The full additional
premium for the Discovery Period shall be fully earned at the
inception of the Discovery Period. The Discovery Period is not
cancellable. This clause and the rights contained herein shall
not apply to any cancellation resulting from non- payment of
premium.
(F) RENEWAL PROVISION
The offer by the Insurer of renewal terms, conditions,limits of
liability and/or premiums varying from those of the expiring policy
shall not constitute a refusal to renew.
(G) NOTICE OF CLAIM OR CIRCUMSTANCE
(1) If during the Policy Period and Claim is first made, as a
condition precedent to indemnity, the Insured Organization
must give written notice to Royal Specialty Underwriting, Inc.
on behalf of the Insurer by certified mail and properly
addressed to the address shown on the Declarations Page, of
such Claim as soon as practicable after such Claim is first
made and in no event later than the expiration date or any
earlier cancellation date of this policy.
(2) If during the Policy Period, an Insured Person or the Insured
Organization first becomes aware of any circumstance which may
reasonably be expected to give rise to a Claim against any
Insured Person and, as soon as practicable thereafter, before
the expiration date or any earlier cancellation date of the
policy, gives to Royal Specialty Underwriting, Inc. on behalf
of the Insurer written notice via certified mail at the
address shown on the Declarations Page of such circumstance
along with full particulars of the specific alleged Wrongful
Act, then any Claim subsequently made against an Insured
Person arising out of such circumstance will be deemed first
made during the Policy Period.
(H) MERGER, CONSOLIDATION OR ACQUISITION
(1) If after the inception date, the Insured Organization creates
or acquires a Subsidiary, that Subsidiary will be deemed to
qualify as an Insured Organization but only for a Wrongful
Act on or after the effective date of such creation or
acquisition, for the first ninety (90) days after the date of
the creation or acquisition. After this ninety (90) day
period the created or acquired Subsidiary will no longer be
deemed an Insured Organization unless:
(a) written notice of the creation of acquisition is given
to the Insurer by the Insured Organization within sixty
(60) days of the date of the creation or acquisition.
Such written notice shall include: (i) a copy of the
most recent audited Financial Statements of the
Subsidiary; (ii) a copy of the creation oracquisition
documents; and (iii) a new completed Royal Directors
and Officers application giving full particulars of the
new subsidiary, which is acceptable to the Insurer;
(b) the Insured Organization provides the Insurer with any
additional information the Insurer may request;
(c) the Insured Organization agrees to the terms, conditions,
exclusions and additional premium charge as may be
required by the Insurer; and
(d) the Insurer, at its sole discretion, agrees in writing to
extend the coverage of the policy to the created or
acquired Subsidiary. If the information in (H) 1(a),
(b), and (c) is received within the sixty (60) day period
and the Insurer does not expressly accept or decline to
extend coverage within the initial ninety (90) day
period, then such ninety (90) day period will be extended
until the Insurer expressly accepts or declines such
extension of coverage.
(2) If after the inception date, the Insured Organization is
acquired by, merged with or consolidated into any entity such
that the Insured Organization is not the surviving entity,
then coverage under this policy shall cease immediately upon
the date of such acquisition, merger or consolidation. For
the purpose of Section 3. Definitions (G), the date of such
acquisition, merger or consolidation shall be deemed the
expiration date.
(I) SALE OR DISSOLUTION OF SUBSIDIARY
If, after the inception date, any Subsidiary is sold or dissolved,
this policy, subject to its terms, shall apply only to persons who
were Insured Persons prior to the sale or dissolution and only with
respect to Claims first made during the Policy Period or Discovery
Period for Wrongful Acts alleged to have been committed prior to
the date of sale or dissolution. No coverage will be afforded for
any person who becomes an Insured Person after the date of sale
or dissolution.
(J) REPRESENTATIONS
The Insured Organization, through its authorized representative,
represents that as of the inception date of this policy the
particulars and statements contained in the Application are
complete, true and correct and agree that (1) those particulars
and statements are the basis of this policy and are to be
considered as incorporated into and constituting a part of this
policy; (2) those particulars and statements are material to the
acceptance of the risk assumed by the Insurer; and (3) this policy
is issued in reliance upon the truthfulness and completeness of
such representations. Except for material facts or circumstances
known to the person or persons who signed the Application, no
statement in the Application or knowledge or information possessed
by an Insured Person will be imputed to any other Insured Person
for the purpose of determining the availability of coverage.
(K) NO ACTION AGAINST THE INSURER
(1) No action may be taken against the Insurer unless, as a
condition precedent thereto, there has been full compliance
with all of the terms of this policy and until the amount
of the Insured Person's obligation to pay Loss has been
finally determined either by judgment against the Insured
Persons after adjudicatory proceedings, or by written
agreement of the Insured Persons, the claimant and the
Insurer.
(2) No Insured Person or Insured Organization has any right
under this policy to join the Insurer as a party to any
Claim against an Insured Person to determine the liability
of such Insured Persons; nor shall the Insurer be impleaded
by an Insured Person or his, her or its legal representative
in any such Claim.
(L) AUTHORIZATION AND NOTICES
The Insured Persons agree that the Insured Organization acts on
their behalf with respect to giving and receiving all notices and
return of premium from the Insurer.
(M) CHANGES
Notices to any agent or knowledge possessed by any agent or
representations by persons acting on behalf of the Insurer does
not effect a waiver or change in any part of this policy or estop
the Insurer from asserting any right under the terms, conditions
and limititations of this policy. The terms, conditions and
limitations of this policy can only be waivered or changed by
written endorsement.
(N) ASSIGNMENT
Assignment of interest under this policy does not bind the Insurer
without its written consent.
(O) CANCELLATION
This policy may be canceled by the Insured Organization at any time
by written notice or by surrender of this policy at any time to
Royal Specialty Underwriting, Inc. at the address shown in the
Declarations Page.
The policy may also be canceled at any time by Royal Specialty
Underwriting, Inc. on behalf of the Insurer by delivery to the
Insured Organization by registered, certified or other first
class mail, to the address shown in this policy, written notice
stating when, not less than sixty (60) days thereafter, the
cancellation will become effective. The mailing of such notice
will be sufficient proof of notice and this policy will terminate
at the date and hour specified in the notice.
If this policy is canceled by the Insured Organization, the Insurer
will retain the customary short rate proportion of the premium
hereon.
If this policy is canceled by the Insurer, the Insurer will retain
the pro rata proportion of the premium hereon. Payment or tender
of any unearned premium by the Insurer is not a condition precedent
to the effectiveness of cancellation but such payment will be made
a soon as practicable after the cancellation date is effective.
If the period of limitation relating to the giving of notice is
prohibited or made void by any law controlling the construction
thereof, such period will be deemed to be amended so as to be
equal to the minimum period of limitation permitted by such law.
If the Insured Organization fails to pay any premium when due, the
Insurer may cancel the policy upon ten (10) days written notice.
The Insurer shall not be required to renew this policy upon its
expiration.
(P) EXHAUSTION
When the limit of liability is exhausted by the indemnification
for Loss, including Defense Expenses, all obligations of the
Insurer under this policy will be fulfilled and extinguished, and
the Insurer will have no further obligations of any kind or nature
whatsoever under this policy.
(Q) ACCEPTANCE
The Insured Organization and Insured Persons agree that this
policy, including the Application and any endorsements, constitute
the entire agreement between them and the Insurer relating to this
insurance policy.
(Q) HEADINGS
The description in the headings and sub-headings of the policy
are solely for convenience, and form no part of the terms and
conditions of coverage.
(S) GOVERNING LAW CLAUSE
This policy shall, to the extent permitted by applicable law, be
construed in accordance with the laws of the state or jurisdiction
of incorporation or organization of the Insured Organization or in
the case of matters pertaining to a Subsidiary, the laws of the
state or jurisdiction of incorporation or organization thereof.
In Witness Whereof, the Insurer has caused this policy to be
executed and attested, but this policy shall not be valid
unless countersigned on the Declarations Page by a duly
authorized agent of the Insurer.
Joyce W. Wheeler William E. Buckley
Corporate Secretary President
DIRECTORS AND OFFICERS
LIABILITY AND COMPANY
REIMBURSEMENT DECLARATIONS
Company Policy Symbol & Number Royal Insurance
Symbol Executive Offices
9300 Arrowpoint Blvd.
R HP 603662 Charlotte,NC 28217
Renewal of
Number RHP602648
THIS POLICY IS ISSUED BY THE COMPANY NAMED BELOW:
COMPANY NAME: ROYAL INDEMNITY COMPANY
PRODUCER'S NAME AND ADDRESS
ROYAL SPECIALTY UNDERWRITING, INC.
Resurgens Plaza, Suite 1890
945 East Paces Ferry Road
Atlanta, GA 30326
Tel: 404-231-2366
ITEM 1. INSURED'S NAME AND MAILING ADDRESS
ARROW AUTOMOTIVE INDUSTRIES, INC.
3 SPEEN STREET
FRAMINGHAM, MA 01701
ITEM 2. POLICY PERIOD:
FROM October 18, 1994 TO June 1, 1995
(12:01 AM Standard Time at the address of the Insured)
ITEM 3. LIMIT OF LIABILITY:
$ 1,000,000 aggregate limit of liability each policy year.
ITEM 4. RETENTION:
$ 0 each Director or Officer each loss but in no event
exceeding
$ 0 in the aggregate subject to
$ 75,000 company reimbursement.
ITEM 5. PREMIUM:
$ 11,699 "TERM" Prepaid Premium
ITEM 6. POLICY FORM NUMBER AND ENDORSEMENTS ATTACHED AT
ISSUANCE
RSUIFP-RI-00001, (SEE ATTACHED SCHEDULE OF ENDORSEMENTS)
These Declarations along with the completed and signed
Application and the Directors and Officers Liability
Insurance Policy, shall constitute the contract between the
Directors and Officers, the Company and Royal Indemnity
Company.
Countersigned: November 8, 1994 SPW James A.Dixon
Date Authorized Representative
RSUI-DOP-0500 (07/92)
Insured's Copy
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
SCHEDULE OF ENDORSEMENTS
1. NUCLEAR ENERGY LIABILITY EXCLUSION 00041
2. EXCLUSION NOS. 11 & 12 DELETED
3. PRIOR/PENDING LITIGATION EXCLUSION
4. COMMISSIONS EXCLUSION DELETED
5. FAILURE TO MAINTAIN INSURANCE EXCLUSION DELETED
6. DISCOVERY ENDORSEMENT 00046
7. COVERAGE ADDED FOR SUBSIDIARIES ENDORSEMENT
The above Schedule of Endorsements is for illustrative and
convenience purposes only and forms no part of the terms and
conditions of coverage.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No.
Countersigned By:
Authorized Representative Date
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
DIRECTORS AND OFFICERS LIABILITY POLICY
NUCLEAR ENERGY LIABILITY EXCLUSION
It is agreed that the policy does not apply:
I. Under any Liability Coverage, to injury, disease, death or
destruction
(a) with respect to which an 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 limit
of liability;
or
(b) resulting from the hazardous properties of nuclear material
and with respect to which (1) any person or organization is
required to maintain financial protection pursuant to the
Atomic Energy Act of 1954, or any law amendatory thereof,
or (2) 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, with any person or
organization.
II. Under any Medical Payments Coverage, or under any Supplementary
Payments provision relating to immediate medical or surgical
relief, to expenses incurred with respect to bodily injury,
sickness, disease or death resulting from the hazardous properties
of nuclear facility by any person or organization.
III. Under any Liability Coverage, to injury, sickness, disease,
death or destruction resulting from the hazardous properties
of nuclear material, if
(a) the nuclear material (1) is at any nuclear facility owned
by, or operated by on behalf of, an insured or (2) has been
discharged or dispersed therefrom;
(b) 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 an insured; or
(c) the injury, sickness, disease, death or destruction arises
out of the furnishing by an insured or services, materials,
parts or equipment in connection with the planning,
construction, maintenance, operation or use of any nuclear
facility, but if such facility is located within the United
States of America, its territories or possessions or Canada,
this exclusion (c) applies only to injury to or destruction
of property at such nuclear facility.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
IV. As used in this endorsement
"hazardous properties" include radioactive, toxic or explosive
properties; "nuclear material" means source material, special
material or byproduct material;
"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;
"spent fuel" means any fuel element or fuel component, solid or
liquid, which has been used or exposed to radiation in a nuclear
reactor;
"waste" means any waste material (1) containing byproduct material
and (2) resulting from the operation by any person or organization
of any nuclear facility included within the definition of nuclear
facility under paragraph (a) or (b) thereof;
"nuclear facility" means
(a) any nuclear reactor
(b) any equipment or device designed or used for (1) separating
the isotopes of uranium or plutonium, (2) processing or
utilizing spent fuel, or (3) handling, processing or packaging
waste, (c) any equipment or device used for the processing,
abricating or alloying of special nuclear material if 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,
and includes the site on which any of the foregoing is
located, all operations conducted on such site and all premises used
for such operations;
"nuclear reactor" means any apparatus designed or used to sustain
nuclear fission in a self-supporting chain reaction or
to contain a critical mass of fissionable material;
With respect to injury to or destruction of property,
the word"injury" or "destruction" includes all forms of
radioactive contamination of property.
Nothing herein contained shall be held to vary, alter,waive or
extend any of the terms, conditions, provisions,agreements or
limitations of the above mentioned Policy other than as above
stated.
All other terms, conditions and warranties remaining unchanged.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 1
Countersigned By:
Authorized Respresentative Date
RSUI-00041
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
In consideration of the premium charged, it is hereby
understood and agreed that Exclusion Nos. 11 & 12 of this
Policy are deleted in their entirety.
Nothing herein contained shall be held to vary, alter, waive
or extend any of the terms, conditions, provisions,
agreements or limitations of the above mentioned Policy
other than as above stated.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 2
Countersigned By:
Authorized Representative Date
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
DIRECTORS AND OFFICERS LIABILITY POLICY
PRIOR AND/OR PENDING LITIGATION EXCLUSION BACKDATED
IN CONSIDERATION of the premium charged, it is hereby
understood and agreed that the Insurer shall not be liable
to make any payment for Loss in connection with any Claim
made against the Insured Persons based upon or attributable
to litigation prior to or pending at the inception date of
this policy involving the Insured Organization and/or
Insured Persons or arising out of the facts or circumstances
underlying or alleged in any such prior or pending
litigation.
It is further agreed that the above shall apply to prior
and/or pending litigation prior to October 18, 1984.
Nothing herein contained shall be held to vary, alter, waive
or extend any of the terms, conditions, provisions,
agreements or limitations of the above mentioned policy
other than as above stated.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 3
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
In consideration of the premium charged, it is hereby
understood and agreed that the Commissions Exclusion - (6)
(a) (b) & (c) of Section 3 (B), is hereby deleted in its
entirety.
Nothing herein contained shall be held to vary, alter, waive
or extend any of the terms, conditions, provisions,
agreements or limitations of the above mentioned policy
other than as above stated.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 4
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
In consideration of the premium charged, it is hereby
understood and agreed that the Failure to Maintain Insurance
Exclusion - (7) of Section 3 (B), is deleted in its
entirety.
Nothing herein contained shall be held to vary, alter, waive
or extend any of the terms, conditions, provisions,
agreements or limitations of the above mentioned policy
other than as above stated.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 5
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
DISCOVERY ENDORSEMENT
IN CONSIDERATION of the premium charged, it is hereby
understood and agreed that Section 4 Conditions (E)
Discovery Period: is deleted and replaced by the following:
If the Insurer shall cancel or refuse to renew this policy
the Insured Organization shall have the right, upon payment
of an additional premium of 75% of the Full Annual Premium,
to a period of 1 YEAR following the effective date of such
cancellation or nonrenewal (herein referred to as the
Discovery Period) in which to give written notice to the
Insurer of claims first made against the Insured Persons
during said 365 DAY period for any Wrongful Act occurring
prior to the end of the Policy Period and otherwise covered
by this policy. As used herein, Full Annual Premium means
the premium level in effect immediately prior to the end of
the Policy Period.
The rights contained in this clause shall terminate,
however, unless written notice of such election together
with the additional premium due is received by Royal
Specialty Underwriting, Inc. at the address shown on the
Declarations Page within ten (10) days of the effective date
of cancellation or nonrenewal. The full additional premium
for the Discovery Period shall be fully earned at the
inception of the Discovery Period. The Discovery Period is
not cancellable. This clause and the rights contained
herein shall not apply to any cancellation resulting from
non-payment of premium.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 6
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
In consideration of the premium charged, it is hereby
understood and agreed that the coverage afforded by this
policy is extended to include the following subsidiaries:
Carbco, Inc.
Icepac, Inc.
It is further understood and agreed that this policy
provides coverage (as herein defined) for loss from claims
by reason of Wrongful Acts occurring subsequest to the date
of acquisition.
It is further understood and agreed that the above addition
shall not serve to increase the Limit of Liability as set
forth in Item 3 of the Policy Declaration.
Nothing herein contained shall be held to vary, alter, waive
or extend any of the terms, conditions, provisions,
agreements or limitations of the above mentioned policy
other than as above stated.
All other terms, conditions and warranties remaining
unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it
is in effect from the time coverage under this policy
commences. Otherwise, the effective date of this
endorsement is as shown below at the same time or hour of
the day as the policy became effective.
Effective Date: Endorsement No. 7
Countersigned By:
Authorized Representative Dated
Royal Insurance
DIRECTORS AND OFFICERS LIABILITY
AND COMPANY REIMBURSEMENT APPLICATION
THIS FORM IS FOR RENEWAL ONLY
1. (a) Name of Entity
Arrow Automotive Industries, Inc.
(b) Address (City, State, Zip Code)
3 Speen Street
Framingham, MA 01701
2. The Officer of the Entity designated to receive notice from the
Insurer concerning this Insurance is:
James F. Fagan Executive Vice President
Name Title
3. Date since which the Entity has continuously carried on
business:
1929
4. Nature of operations (if Sales or Manufacturing, please
detail accordingly):
Remanufacture of automotive parts
5. Stock Ownership
(a) Number of common shares outstanding
2,813,710
(b) Number of common stock shareholders
349
(c) Number of shares of the Company's common stock owned directly
or beneficially by its Directors and Officers:
1,838,846
(d) Does any shareholder own directly or beneficially 10 percent
or more of the common shares?
X Yes No (If "Yes", please give details): Lawrence M.
Levinson 50%; Mary S. Holzwasser, Joseph Segal and Lawrence
Levinson as Trustees of the Trust u/w/o Albert S. Holzwasser 18.7%;
Mary S. Holzwasser 49.6%; Harry A. Holzwasser 8.7%.
6. List the names, titles and affiliations of all Directors and
Officers of the Entity and its Subsidiary companies:
See attached.
7. Complete list of subsidiary companies:
Name Type of Operation Percentage Date Domestic
of Ownership Acquired or Foreign
N/A
8. Have any plans for merger, acquisition or consolidation been
approved by the Board of Directors?
Yes X No (If "Yes", please give details):
9. Does the Entity anticipate any new public offering of Securities
or any registration of Securities under the Securities Act of 1933
or qualification of Securities under Regulation A within the next
year?
Yes X No (If "Yes", please give details and submit a copy of
such registration statement and all amendments.):
10. Please indicate various Limit(s) of Liability and Retentions for
which quotations are desired:
LIMIT RETENTION
10,000,000 each loss 2,500 each person
10,000,000 each loss 5,000 all persons
10,000 organization
The undersigned authorized Officer of the Entity, on behalf
of the Directors and Officers and the Entity, warrant that
to the best of his knowledge and belief the statements set
forth herein are true and he/she agrees that this Renewal
Application is a supplement to the application completed for
the issuance of the first policy, and that application
together with this Renewal Application and information
furnished pursuant hereto shall be the basis of the contract
should a policy be issued and such applications will be
attached and become part of the policy. Insurer is hereby
authorized to make any investigation and inquiry it deems
necessary in connection with this application.
NOTICE TO NEW YORK APPLICANTS
Your state insurance department requires applicants to be
informed that any person who knowingly and with intent to
defraud any insurance company or other person files an
application for insurance containing any false information,
or conceals for the purpose of misleading, information
concerning any fact material thereto, commits a fraudulent
insurance act, which is a crime.
NOTE: The application must be signed by the Chairman of the
Board or the President and dated within 30 days of binding
should an order be given.
Signature Jim L. Osment Title President
(Chairman of the Board or President)
Date May 2, 1994 Company Arrow Automtive
Industries, Inc.
85431 (e.d.10.83)
One copy of each of the following documents is attached and
made a part of this proposal:
(a) AUDITED ANNUAL REPORT (complete financial statements for the most
recent three (3) years)
(b) LATEST INTERIM FINANCIAL STATEMENT
(c) MOST RECENT FORM 10K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION SUBSEQUENT TO THE FILING THE ANNUAL 10K (if the Entity
is publicly traded)
(d) LATEST PROXY STATEMENT
(e) COPY OF CURRENT SCHEDULE OF INSURANCE
Submitted By Johnson & Higgins, Boston Date
5/11/94
Producer
NOTE: This Application and all exhibits shall be treated in
the strictest confidence.
CNA
For All the Commitments You Make
CNA INSURANCE COMPANIES
DECLARATIONS
CNA PLAZA EXCESS
INSURANCE POLICY
CHICAGO, IL 60685
NOTICE
THIS IS A "CLAIMS MADE" POLICY AND, SUBJECT TO ITS
PROVISIONS, APPLIES ONLY TO ANY CLAIM FIRST MADE AGAINST THE
INSUREDS DURING THE POLICY PERIOD. NO COVERAGE EXISTS FOR
ANY CLAIM FIRST MADE AFTER THE END OF THE POLICY PERIOD
UNLESS, AND TO THE EXTENT, THE EXTENDED REPORTING PERIOD
APPLIES. THE LIMIT OF LIABILITY SHALL BE REDUCED BY AMOUNTS
INCURRED AS DEFENSE COSTS.
ACCOUNT NUMBER COVERAGE PROVIDED BY
201028
POLICY NUMBER Continental Casualty Company
AGENCY
DOX 132022777
910 792169
NAMES ENTITY AND PRINCIPAL ADDRESS AGENT
Item Arrow Automotive Industries, Inc. Johnson & Higgins Of
Massachusetts, Inc.
1. 3 Speen Street Ms. Suzanne Hoppenstedt
Framingham, MA 01701 Three Center Plaza
Boston, MA 02108
Attn: Mr. James F. Fagan
Item Policy Period:
2. 10/18/94 To 06/01/95
12:01 A.M. Standard Time at the Principal Address
stated in Item 1.
Item Limited of Liability (inclusive of Defense Costs):
3.
$ 4,000,000 Maximum aggregate
Limit of Liability each
Policy Period.
Item Schedule of Underlying Insurance:
4. A. Primary Policy
Name of Carrier Policy No. Limits Deductible/
Retention Amount
Royal Indemnity Company RHP 603662 $1,000,000 0/0/$75,000
B. Underlying Excess Policy(ies):
Name of Carrier Policy No. Limits Deductible/
Retention Amount
Item Policy Premium
5.
$ 27,855
Item Forms and Endorsements forming a part of this policy at
inception:
6. FIG-1006-A
These Declarations along with the completed and signed
Application and the Excess Insurance Policy, shall
constitute the contract between the Insureds, the Named
Entity, and the Insurer.
Johnson & Higgins of Massachusetts, Inc.
G-17725-A Authorized Representative
(ED 04/92) Chairman of the Board Secretary Attorney
Date
EXCESS INSURANCE POLICY
In consideration of the payment of the premium and in
reliance on all statements made and information furnished to
Continental Casualty Company (hereinafter called the
"Insurer"), and/or to the Insurers of the Underlying
Insurance, including the statements made in the Application
made a part hereof and subject to all of the provisions of
this Policy, the Insurer and the Insureds agree as follows:
I. INSURING AGREEMENT
The Insurer shall provide the Insureds with excess coverage
over the Underlying Insurance as set forth in Item 4 of the
Declarations during the policy Period set forth in Item 2 of
Declarations. Coverage hereunder shall attach only after
all such Underlying Insurance has been exhausted by payments
for losses and shall then apply in conformance with the same
provisions of the Primary Policy at its inception, except
for premium, limit of liability and as otherwise
specifically set forth in the provisions of this Policy.
II. POLICY DEFINITIONS
Application shall mean the written application for this
Policy, including any materials submitted therewith, which
together shall be on file with the Insurer and deemed a part
of and attached hereto as if physically attached to this
Policy.
Named Entity means the organization named in Item 1 of the
Declarations.
Insureds means those persons or organization(s) insured
under the Primary Policy, at its inception.
Policy Period means the period from the effective date and
hour of this Policy as set forth in Item 2 of the
Declarations, to the Policy expiration date and hour set
forth in Item 2 of the Declarations, or its earlier
cancellation date or termination date, if any.
Primary Policy means the Policy scheduled in Item 4 (a) of
the Declarations.
Underlying Insurance means all those Policies scheduled in
Item 4 of the Declarations and any Policies replacing them.
III. MAINTENANCE OF UNDERLYING INSURANCE
All of the Underlying Insurance scheduled in Item 4 of the
Declarations shall be maintained during the Policy Period in
full effect, except for any reduction of the aggregate
limit(s) of liability available under the Underlying
Insurance solely by reason of payment of losses thereunder.
Failure to comply with the foregoing shall not invalidate
this Policy but the Insurer shall not be liable to a greater
extent than if this condition had been complied with. To
the extent that any Underlying Insurance is not maintained
in full effect during the currency of this
Policy Period, then the Insureds shall be deemed to have
retained any loss for the amount of the limit of liability
of any Underlying Insurance which is not maintained as set
forth above.
In the event of any actual or alledged (a) failure by the
Insureds to give notice or to exercise any extensions under
any Underlying Insurance or (b) misrepresentation or breach
of warranties by any of the Insured with respect to any
Underlying Insurance, the Insurer shall not be liable
hereunder to a greater extent than it would have been in the
absence of such actual or alleged failure, misrepresentation
or breach.
It is further a condition of this Policy that the Insurer
shall be notified in writing, as soon as practicable of
cancellation and/or alteration of any provisions of any of
the policies of Underlying Insurance.
IV. LIMIT OF LIABILITY
The amount set forth in Item 3 of the Declarations shall be
the maximum aggregate Limit of Liability of the Insurer for
the Policy Period.
Costs of defense shall be part of and not in addition to the
Limit of Liability in Item 3 of the Declarations, and such
costs of defense shall reduce the Limit of Liability stated
in Item 3 of the Declarations.
V. DEPLETION OF UNDERLYING (LIMITS)
In the event of the depletion of the limit(s) of liability
of the Underlying Insurance solely as the result of the
actual payment of losses thereunder by the applicable
insurers, this Policy shall, subject to the Insurer's Limit
of Liability and to the other terms of this Policy, continue
to apply to losses as Excess Insurance over the amount of
Insurance remaining under such Underlying Insurance. In the
event of the exhaustion of all of the limit(s) of liability
of such Underlying Insurance solely as a result of payment
of losses thereunder, the remaining limits available under
this Policy shall, subject to the Insurer's Limit of
Liability and to the other provisions of this Policy,
continue for subsequent losses as primary insurance and any
retention specified in the Primary Policy shall be imposed
under this Policy as to each claim made; otherwise no
retention shall be imposed under this policy.
This Policy only provides coverage excess of the Underlying
Insurance. This Policy does not provide coverage for any
loss not covered by the Underlying Insurance except and to
the extent that such loss is not paid under the Underlying
Insurance solely by reason of the reduction or exhaustion of
the available Underlying Insurance through payments of loss
thereunder. In the event the insurer of one or more of the
Underlying Insurance polices fails to pay loss in connection
with any claim covered under the Underlying Insurance as a
result of the insolvency, bankruptcy, or liquidation of said
insurer, then the Insureds hereunder shall be deemed to have
retained any loss for the amount of limit of liability of
said Insurer which is not paid as the result of such
insolvency, bankruptcy or liquidation.
If any Underlying Insurance bears an effective date which is
prior to the effective date of this Policy and if any such
Insurance becomes exhuasted or impaired by payment of loss
with respect to any claim which, shall be deemed to be made
prior to the effective date of this Policy, then with
respect to any claim made after the the effective date of
this Policy, the Insureds shall be deemed to have retained
any loss for the amount of any such Underlying Insurance
which is exhausted or impaired by payment of loss with
respect to such claim made prior to the effective date of
this Policy.
VI. CLAIM PARTICIPATION
The Insured shall not admit liability, consent to any
judgment against them, or agree to any settlement which is
reasonably likely to involve the Limit of Liability of this
Policy without the Insurer's consent, such consent not to be
unreasonably withheld.
The Insurer may, at its sole discretion, elect to
participate in the investigation, settlement or defense of
any claim against any of the Insureds for matters covered by
this Policy even if the Underlying Insurance has not been
exhausted.
All provisions of the Underlying Insurance are considered as
part of this Policy except that it shall be the duty of the
insureds and not the duty of the Insurer to defend any
claims against any of the Insureds.
VII. SUBROGATION - RECOVERIES
In that this Policy is "Excess Coverage", the Insureds and
the Insurer's right of recovery against any person or other
entity may not be exclusively subrogated. Despite the
foregoing, in the event of any payment under this Policy,
the Insurer shall be subrogated to all the Insured's rights
of recovery against any person or organization, and the
Insureds shall execute and deliver instruments and papers
and do whatever else is necessary to secure such rights.
Any amounts recovered after payment of loss hereunder shall
be apportioned in the inverse order of payment to the extent
of actual payment. The expenses of all such recovery
proceedings shall be apportioned in the ratio of respective
recoveries.
VIII. NOTICE
The Insurer shall be given notice in writing as soon as is
practicable in the event (a) the cancellation of any
Underlying Insurance and (b) any additional or return
premiums charged or allowed in connection with any
Underlying Insurance. Notice regarding (a) and (b) above
shall be given to Manager, Directors and Officers Liability
Underwriting, CNA Insurance Companies, CNA Plaza, Chicago,
Illinois 60685.
The Insurer shall be given notice as soon as practicable of
any notice of claim or any situation that could give rise to
a claim under any Underlying Insurance. Notice of any claim
to the Insurer shall be given in writing to Manager,
Professional Liability Claims, CNA Insurance Companies, CNA
Plaza, Chicago, Illinois 60685.
IX. COMPANY AUTHORIZATION CLAUSE
By acceptance of this Policy, the Named Entity named in Item
1 of the Declarations agrees to act on behalf of all the
Insureds with respect to the giving and receiving of notice
of claim or cancellations, the payment of premiums and the
receiving of any return premiums that may become due under
this Policy; and the Insureds agree that the Names Entity
shall in all cases be authorized to act on their behalf.
X. ALTERATION
No change in or modification of this Policy shall be
effective except when made by endorsement signed by an
authorized employee of the Insurer or any of its agents
relating to this Policy.
XI. POLICY CANCELLATION
This Policy may be canceled by the Named Entity at any time
by written notice or by surrender of this Policy to the
Insurer. This Policy may also be canceled by or on behalf
of the Insurer by delivery to the Named Entity or by mailing
to the Named Entity, by registered, certified or other first
class mail, at the address shown in Item 1 of the
Declarations, written notice stating when, not less than
thirty (30) days thereafter, the cancellation shall become
effective. The mailing of such notice as aforesaid shall be
sufficient proof of notice and this Policy shall cancel at
the date and hour specified in such notice.
If the period of limitation relating to the giving of notice
is prohibited or made void by any law controlling the
construction thereof, such period shall be deemed to be
amended so as to be equal to the minimum period of
limitation permitted by such law.
The Insurer shall refund the unnamed premium computed at
less than pro-rata if the Policy is canceled in its entirety
by the Named Entity. Under any other circumstances the
refund shall be computed pro-rata.
XII. EXCLUSIONS
Nothwithstnading any provisions of the Underlying Insurance,
the Insurer shall not be liable to make payment for loss in
connection with any claim based upon, arising out of,
relating to, directly or indirectly resulting from, or in
consequence of, or in any way involving:
1. nuclear reaction, radiation, or contamination
regardless of causes;
2. pollutants, including but not limited to loss arising
out of any:
a. request, demand or order that any of the Insureds
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 by or on behalf of a governmental authority
for damages because of testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying or neutralizing
or in any way responding to or assessing the effects of
pollutants.
Pollutants means any solid, liquid, gaseous or thermal
irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes
materials to be recycled, reconditioned or reclaimed.
XIII. CONDITIONS
No action shall be taken against the Insurer unless, as a
condition precedent, there shall have been full compliance
with all the provisions of this Policy, nor until the amount
of the Insureds obligation to pay shall have been finally
determined either by final and nonappealable judgment
against the Insureds after trial, or by written agreement of
the Insureds, the claimant and the Insurer.
Secretary Chairman of the Board
Prior or Pending Litigation Exclusion
In consideration of the premium paid for this policy, it is
agreed that Section XII. is amended with the addition of the
following:
3 Any fact, circumstance, situation, transaction or
event underlying or alleged in any prior and/or pending
litigation as of 10/18/87, regardless of the legal theory upon
which such litigation is predicated.
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for
attachment to the following described Policy issued by the
designated Insurers takes effect on the effective date of
said Policy, unless another effective date is shown below,
at the hour stated in said Policy and expires concurrently
with said Policy.
Must be Completed Complete Only When This Endorsement is
Not Prepared with the Policy or is
Not to be Effective with the Policy
ENDT.No. POLICY NO. ISSUED TO EFFECTIVE DATE OF
THIS ENDORSEMENT
01
,128243104,1320226
96
Countersigned by
Authorized Representative
(CNA) RENEWAL APPLICATION FOR
DIRECTORS AND OFFICERS LIABILITY INSURANCE
NOTICE
THIS IS AN APPLICATION FOR A CLAIMS-MADE POLICY WHICH,
SUBJECT TO ITS PROVISIONS, APPLIES ONLY TO ANY CLAIM FIRST
MADE AGAINST THE DIRECTORS AND OFFICERS DURING THE POLICY
PERIOD. NO COVERAGE EXISTS FOR CLAIMS FIRST MADE AFTER THE
END OF THE POLICY PERIOD UNLESS, AND TO THE EXTENT, THE
EXTENDED REPORTING PERIOD APPLIES. THE LIMIT OF LIABILITY
SHALL BE REDUCED BY AMOUNTS INCURRED AS DEFENSE COSTS.
DEFENSE COSTS SHALL BE SUBJECT TO THE RETENTION AMOUNTS.
PLEASE REVIEW THE POLICY CAREFULLY AND DISCUSS THE COVERAGE
WITH YOUR INSURANCE AGENT OR BROKER.
Instructions For Completing This Application
Please read the instructions carefully, and complete and
submit all requested information and required attachments.
Please note that terms appearing in bold face in the above
Notice and in any Application Question below are defined in
the Policy and shall have the same meaning in this
Application as in the Policy. This Application and all
materials submitted or required shall be held in confidence.
Questions 3 and 4 need not be answered if the information
requested is contained-in any required attachments.
Required Attachments:
1. All proxy statements and Notices of Annual
Meeting to Stockholders within the last twelve months
2. Audited financial statements for the most recent three
fiscal years
3. The latest interim financial statements
4. The indemnification provisions of the charter and bylaws
5. Any filings made to the SEC within the last 12 months
Please submit this Application to:
CNA Insurance Companies
Financial Insurance Division - 20 South
CNA Plaza
Chicago, Illinois 60685
(312)
ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT
(S)HE IS FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN
APPLICATION OR FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT
MAY BE GUILTY OF INSURANCE FRAUD.
1. Named Entity: Arrow Automotive Industries, Inc.
Street Address: 3 Speen Street
City: Framingham State: MA Zip Code: 01701
Telephone: (508) 872-3711
2. The Officer designated by the Entity to receive
notices from the
Insurer concerning this insurance is:
Kathaleen Carroll-Coelho Vice President and Controller
Name of Officer Title
Questions 3 and 4 Need Not Be Answered if the Information
Requested is Contained in the Required Attachments
3. Has there been any material change in the nature of the
operations within the last 12 months? Yes No X
If yes, provide details:
4. Stock Ownership of Named Entity
a. Total number of common shares outstanding: 2,871,895
b. Total number of common shareholders: 346
c. Total number of common shares owned directly
or beneficially by Directors: 1,700,004
d. Total number of common shares owned directly
or beneficially by Officers who are not Directors 38,982
e. Does any shareholder own directly or beneficially
five percent or more of the common shares?
Yes X No
If "Yes", designate name and percentage of holdings:
Lawrence M. Levinson, 49.08%; Mary S. Holzwasser, Joseph
Segal and Larry Levinson as Trustees of the Trust U/W/O
Albert Holzwasser 18.36%; Harry Holzwasser 6.84%,
Dimensional Fund Advisors Inc. 6.26%.
Include by attachment the information above (items a-e) for any
additional classes of voting stock.
f. Are there any other securities convertible to
voting stock?
Yes No X
If "Yes", provide details:
5. Have there been any changes in senior management
(Board Chairman, President, Executive Vice
President, etc.) in the last 12 months?
Yes No X
If "Yes", provide details:
6. By attachment to this Application, provide the
following information for any Subsidiary acquired
or created after the effective date of the current
Policy: Not applicable
a. Name d. Nature of business
b. Date of acquisition e. Domestic or foreign
c. Percent of ownership f. Name of parententity
7. During the last 12 months, has the Entity been involved
in, or is it presently considering, any merger,
consolidation, acquisition, tender offer, or
divestment or sale of its stock in excess of 10% of the total
stock outstanding?
Yes No X
If "Yes", provide details:
8. Has the Entity filed, or contemplated filing, a
registration statement with the Securities and
Exchange Commission:
a. within the past 12 months?
Yes No X
b. within the next 12 months?
Yes No X
If "Yes", to either of the above, provide details and
furnish a copy of such registration statement if
available.
9. a. Within the last 12 months has the Named Entity
or any Subsidiary made or joined in a Schedule
13-D filing with the Securities and Exchange
Commission with respect to ownership to the
securities of another corporation?
Yes No X
If "Yes", provide details.
b. Within the last 12 months, has the Named Entity
or any Subsidiary become aware that any person,
corporation or other entity has made a Schedule
13-D filing with respect to the ownership of the
securities of the Named Entity or any Subsidiary?
Yes X No
If "Yes", provide details. Dimensional Fund
Advisors, Inc., 1229 Ocean Avenue, Santa Monica, California 179,700
shares
10. Please provide the following insurance information:
a. Pension/Fiduciary Liability Limit: 1,000,000
Carrier: Federal (Chubb) Expir Date: 6/1/95
b. Commercial Crime/Fidelity Limit: 5,000,000
Carrier: Liberty Mutual Expir Date: 6/1/95
c. General Liability Limit: 1,000,000
Carrier: Liberty Mutual Expir Date: 6/1/95
11. During the last 12 months has the Entity or any ofthe
Directors and Officers been involved in any of the
following:
a. any anti-trust, copyright or patent litigation?
Yes No X
b. any civil or criminal action or administrative
proceeding charging a violation of any federal
or state security law or regulation?
Yes No X
c. any representative actions, class actions or
derivative suits?
Yes No X
d. other material litigation?
Yes No X
If "Yes", to any of the above, please attach full details.
12. The undersigned declares that to the best of his/her knowledge
the statements set forth herein are true and correct and that
reasonable efforts have been made to obtain sufficient
information from all of the Director and Officers to facilitate
the proper and accurate completion of this Application for the
proposed Policy. Signing of this Application does not bind
the undersigned to complete the Insurance, but it is agreed that
this Application shall be the basis of the contract should a
Policy be issued, and this Application will be attached to and
become part of such Policy. The undersigned agrees that if after
the date of this Application and prior to the effective date
of the Policy, any occurrence, event or other circumstance should
render any of the information contained in this Application
inaccurate or incomplete, then the undersigned shall notify the
Insurer of such occurrence, event or circumstance and shall
provide the Insurer with information that would complete, update
or correct the information contained in this Application. Any
outstanding quotations may be modified or withdrawn at the sole
discretion of the Insurer.
13. It is agreed that this Renewal Application and allApplication(s)
for all policies issued by the Insurer of which the proposed
Policy would be a direct or indirect renewal or replacement,
copies of which will be attached to the proposed Policy, and any
materials submitted or required (which shall be maintained on
file by the Insurer and be deemed attached as if physically
attached to the proposed Policy), are true and are the basis of
the proposed Policy and are to be considered as incorporated into
and constituting a part of the proposed Policy.
14. The information requested in this Application is for underwriting
purposes only and does not constitute notice to the Insurer under
any Policy of a Claim or potential claim. All such notices must
be submitted to the Insurer pursuant to Section VII of the
Policy.
The undersigned acknowledges that he or she is aware that
Defense Costs reduce and may exhaust the Limit of Liability.
The Insurer is not liable for any Loss (which includes
Defense Costs) in excess of the Limit of Liability.
This Application must be signed by the Chairman of the Board
or President.
Signed Harry A. Holzwasser
Title Chairman of the Board
Corporation Arrow Automotive Industries Inc.
Date 12/8/94
A POLICY CANNOT BE ISSUED UNLESS THE APPLICATION IS PROPERLY
SIGNED AND DATED
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENT OF INCOME, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-24-1995
<PERIOD-END> MAR-25-1995
<CASH> 306
<SECURITIES> 0
<RECEIVABLES> 10,969
<ALLOWANCES> 0
<INVENTORY> 37,367
<CURRENT-ASSETS> 51,332
<PP&E> 34,611
<DEPRECIATION> 22,078
<TOTAL-ASSETS> 65,850
<CURRENT-LIABILITIES> 18,691
<BONDS> 10,713
<COMMON> 297
0
0
<OTHER-SE> 32,547
<TOTAL-LIABILITY-AND-EQUITY> 65,850
<SALES> 81,801
<TOTAL-REVENUES> 81,828
<CGS> 62,243
<TOTAL-COSTS> 82,047
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,440
<INCOME-PRETAX> (219)
<INCOME-TAX> (84)
<INCOME-CONTINUING> (135)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (135)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
