AMERICAN INTERNATIONAL COMPANIES
/_/ AIU Insurance Company /_/ Granite State Insurance Company
/_/ American Home Assurance Company /_/ Illinois National Insurance Company
/_/ American International Pacific
Insurance Company /X/ National Union Fire Insurance
Co. of Pittsburgh, Pa.
/_/ American International South
Insurance Company /_/ National Union Fire Insurance
Company of Louisiana
/_/ Birmingham Fire Insurance Company
of Pennsylvania /_/ New Hampshire Insurance Company
(each of the above being a capital stock company)
POLICY #: 280-69-48
RENEWAL OF: 858-56-36
EXECUTIVE AND ORGANIZATION LIABILITY INSURANCE POLICY
NOTICE: COVERAGES A, B AND C ARE CLAIMS MADE. THE COVERAGE OF THIS POLICY IS
GENERALLY LIMITED TO LIABILITY FOR CLAIMS THAT ARE FIRST MADE AGAINST THE
INSUREDS AND CRISIS FIRST OCCURING DURING THE POLICY PERIOD AND REPORTED IN
WRITING TO THE INSURER PURSUANT TO THE TERMS HEREIN. PLEASE READ THIS POLICY
CAREFULLY AND REVIEW ITS COVERAGE WITH YOUR INSURANCE AGENT OR BROKER.
NOTICE: AMOUNTS INCURRED FOR LEGAL DEFENSE SHALL REDUCE THE LIMIT OF LIABILITY
AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS, AND SHALL BE APPLIED AGAINST THE
RETENTION AMOUNT.
NOTICE: THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND. THE INSURER MUST ADVANCE
DEFENSE COSTS, EXCESS OF THE APPLICABLE RETENTION, PURSUANT TO THE TERMS HEREIN
PRIOR TO THE FINAL DISPOSITION OF A CLAIM.
NOTICE: TERMS APPEARING IN BOLD FACE TYPE HAVE SPECIAL MEANING. SEE CLAUSE 2 OF
THE POLICY.
DECLARATIONS
ITEMS
1 NAMED ENTITY: STV GROUP, INCORPORATED
(herein "Named Entity")
1(a) MAILING ADDRESS: 205 WEST WELSH DRIVE
DOUGLASSVILLE, PA 19518
1(b) STATE OF INCORPORATION/FORMATION: Pennsylvania
2 POLICY PERIOD: From: May 5, 2000 To: May 5, 2001
12:01 A.M. standard time at the address stated in Item 1(a)
3 POLICY AGGREGATE LIMIT OF LIABILITY
(herein "Limit of Liability")
For all Loss, in the aggregate, under this policy including Defense
Costs: $6,000,000
4 RETENTION: Not applicable to Non-Indemnifiable Loss and certain
Defense Costs - (See Clause 6 for details.)
4(a) Securities Claims: $125,000 4(b) Employment Practices
Claims: $125,000
4(c) All other Claims: $125,000
1
<PAGE>
ITEMS (continued)
5 CONTINUITY DATE (herein "Continuity Date")
5(a) Coverages A and B, other than
Outside Entity Executive coverage: October 26, 1983
5(b) Outside Entity Executive coverage, including Coverage C: May 3, 1996
5(c) Coverage D: May 5, 2000
The date on which the Insured Person first served as an Outside Entity
Executive of such Outside Entity
6 PREMIUM: $66,475
7 CRISISFUND(SM) limit:
7(a) Crisis Loss: $50,000 7(b) Additional CRISISFUND(SM)
for Delisting Crisis Loss:
$25,000
8 NAME AND ADDRESS OF INSURER (herein "Insurer"):
National Union Fire Insurance Company of Pittsburgh, Pa.
175 Water Street
New York, NY 10038
This policy is issued only by the insurance company indicated in this Item 8.
2
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this policy to be signed on the
Declarations page by its President, a Secretary and a duly authorized
representative of the Insurer.
/s/ Elizabeth M. Tuck /s/ John Keogh
--------------------- --------------------
SECRETARY PRESIDENT
/s/ Paul L. Schiavone
-------------------------
AUTHORIZED REPRESENTATIVE
--------------------- ----------------
COUNTERSIGNATURE DATE COUNTERSIGNED AT
ROEHRS & COMPANY INC
PO BOX 100
EXTON, PA 19341
<PAGE>
EXECUTIVE AND ORGANIZATION LIABILITY INSURANCE POLICY
In consideration of the payment of the premium, and in reliance upon the
Application and the statements therein, which form a part of this policy, the
Insurer agrees as follows:
1. INSURING AGREEMENTS
With respect to Coverage A, B and C, solely with respect to Claims first
made against an Insured during the Policy Period or the Discovery Period
(if applicable) and reported to the Insurer pursuant to the terms of this
policy, and subject to the other terms, conditions and limitations of this
policy, this policy affords the following coverage:
COVERAGE A: EXECUTIVE LIABILITY INSURANCE
This policy shall pay the Loss of any Insured Person arising from a Claim
made against such Insured Person for any Wrongful Act of such Insured
Person, except when and to the extent that an Organization has indemnified
such Insured Person. Coverage A shall not apply to Loss arising from a
Claim made against an Outside Entity Executive.
COVERAGE B: ORGANIZATION INSURANCE
(i) Organization Liability. This policy shall pay the Loss of any
Organization arising from a Securities Claim made against such
Organization for any Wrongful Act of such Organization.
(ii) Indemnification of an insured Person: This policy shall pay the Loss
of an Organization arising from a Claim made against an Insured Person
(including an Outside Entity Executive) for any Wrongful Act of such
Insured Person, but only to the extent that such Organization has
indemnified such Insured Person.
COVERAGE C: OUTSIDE ENTITY EXECUTIVE LIABILITY INSURANCE
This policy shall pay the Loss of any Outside Entity Executive arising from
a Claim made against such Outside Entity Executive for any Wrongful Act of
such Outside Entity Executive but only excess of any indemnification
provided by an Outside Entity and any insurance coverage afforded to an
Outside Entity or its Executives applicable to such Claim, except when and
to the extent that an Organization has indemnified such Outside Entity
Executive.
COVERAGE D: CRISISFUND(SM) INSURANCE
This policy shall pay the Crisis Loss (including Delisting Crisis Loss) of
an Organization solely with respect to a Crisis (including a Delisting
Crisis) occurring during the Policy Period or the Discovery Period (if
applicable) and reported to the Insurer pursuant to the terms of this
policy, up to the amount of the respective CrisisFund(SM), from first
dollar; provided that payment of any Crisis Loss under this policy shall
not waive any of the Insurer's rights under this policy or at law. This
Coverage D shall apply regardless of whether a Claim is ever made against
an Insured arising from such Crisis and, in the case where a Claim is made,
regardless of whether the amount is incurred prior to or subsequent to the
making of the Claim.
2. DEFINITIONS
(a) "Application" means each and every signed application, any attachments
to such applications, other materials submitted therewith or
incorporated therein and any other documents submitted in connection
with the underwriting of this policy or the underwriting of any other
directors and officers (or equivalent) liability policy issued by
1
<PAGE>
the Insurer, or any of its affiliates, of which this policy is a renewal,
replacement or which it succeeds in time, and any public documents filed by
an Organization with any federal, state, local or foreign regulatory agency
(including but not limited to the Securities and Exchange Commission
(SEC)).
(b) "Claim" means:
(1) a written demand for monetary, non-monetary or injunctive relief;
(2) a civil, criminal, administrative, regulatory or arbitration
proceeding for monetary, non-monetary or injunctive relief which
is commenced by: (i) service of a complaint or similar pleading;
(ii) return of an indictment, information or similar document (in
the case of a criminal proceeding); or (iii) receipt or filing of
a notice of charges; or
(3) a civil, criminal, administrative or regulatory investigation of
an Insured Person:
(i) once such Insured Person is identified in writing by such
investigating authority as a person against whom a
proceeding described in Definition (b)(2) may be commenced;
or
(ii) in the case of an investigation by the SEC or a similar
state or foreign government authority, after the service of
a subpoena upon such Insured Person.
The term "Claim" shall include any Securities Claim and any Employment
Practices Claim.
(c) "Crisis" has the meaning as defined in Appendix B attached to this
policy.
(d) "CrisisFund(SM)" means:
(1) in the case of all Crisis Loss, other than Delisting Crisis Loss,
the dollar amount set forth in Item 7(a) of the Declarations; and
(2) in the case of Delisting Crisis Loss the dollar amount set forth
in Item 7(a) of the Declarations plus the additional dollar
amount set forth in Item 7(b) of the Declarations, combined.
(e) "Crisis Loss" has the meaning as defined in Appendix B attached to
this policy. "Delisting Crisis Loss" means a Crisis Loss resulting
solely from a Delisting Crisis (as defined in Appendix B).
(f) "Defense Costs" means reasonable and necessary fees, costs and
expenses consented to by the Insurer (including premiums for any
appeal bond, attachment bond or similar bond arising out of a covered
judgment, but without any obligation to apply for or furnish any such
bond) resulting solely from the investigation, adjustment, defense
and/or appeal of a Claim against an Insured, but excluding any
compensation of any Insured Person or any Employee of an Organization.
(g) "Employee" means any past, present or future employee, other than an
Executive of an Organization, whether such employee is in a
supervisory, co-worker or subordinate position or otherwise, including
any full-time, part-time, seasonal and temporary employee.
(h) "Employment Practices Claim" means a Claim alleging any Employment
Practices Violation.
(i) "Employment Practices Violation" means any actual or alleged:
2
<PAGE>
(1) wrongful dismissal, discharge or termination, either actual or
constructive, of employment;
(2) harassment (including but not limited to sexual harassment);
(3) discrimination;
(4) retaliation;
(5) employment-related misrepresentation;
(6) employment-related libel, slander, humiliation, defamation or
invasion of privacy;
(7) wrongful failure to employ or promote;
(8) wrongful deprivation of career opportunity, wrongful demotion or
negligent Employee evaluation;
(9) wrongful discipline
(10) failure to grant tenure; or
(11) with respect to any of the foregoing items (1) through (10) of
this definition: negligent hiring, retention, training or
supervision, infliction of emotional distress, failure to provide
or enforce adequate or consistent corporate policies and
procedures, or violation of an individual's civil rights,
but only if such act, error or omission relates to an Executive of, an
Employee of or an applicant for employment with an Organization or an
Outside Entity, whether committed directly, indirectly, intentionally
or unintentionally. In addition, with respect to any natural person
customer or client, "Employment Practices Violation" shall mean only
actual or alleged discrimination, sexual harassment or violation of an
individual's civil rights relating to such discrimination or sexual
harassment, whether committed directly, indirectly, intentionally or
unintentionally.
(j) "Executive" means any:
(1) past, present and future duly elected or appointed director,
officer, trustee or governor of a corporation, management
committee member of a joint venture and member of the management
board of a limited liability company (or equivalent position);
(2) past, present and future person in a duly elected or appointed
position in an entity organized and operated in a Foreign
Jurisdiction that is equivalent to an executive position listed
in Definition (j)(1); or
(3) past, present and future General Counsel and Risk Manager (or
equivalent position) of the Named Entity
(k) "Foreign Jurisdiction" means any jurisdiction, other than the United
States or any of its territories or possessions.
(1) "Foreign Policy" means the Insurer's or any other company of American
International Group, Inc.'s (AIG) standard executive managerial
liability policy (including all mandatory endorsements, if any)
approved by AIG to be sold within a Foreign Jurisdiction that provides
coverage substantially similar to the coverage afforded under this
policy. If more than one such policy exists, then "Foreign Policy"
means the standard policy most recently registered in the local
language of the Foreign Jurisdiction, or if no such policy has been
registered, then the policy most recently registered in that Foreign
Jurisdiction. The term "Foreign Policy" shall not include any
partnership managerial, pension trust or professional liability
coverage.
(m) "Indemnifiable Loss" means Loss for which an Organization has
indemnified or is permitted or required to indemnify an Insured Person
pursuant to law or contract or the charter, bylaws, operating
agreement or similar documents of an Organization.
3
<PAGE>
(n) "Insured" means any:
(1) Insured Person; or
(2) Organization, but only with respect to a Securities Claim.
(o) "Insured Person" means any:
(1) Executive of an Organization;
(2) Employee of an Organization; or
(3) Outside Entity Executive:
(p) "Loss" means damages, settlements, judgments (including
pre/post-judgment interest on a covered judgment), Defense Costs and
Crisis Loss; however, " Loss" (other than Defense Costs) shall not
include: (1) civil or criminal fines or penalties; (2) taxes; (3)
punitive or exemplary damages; (4) the multiplied portion of
multiplied damages; (5) any amounts for which an Insured is not
financially liable or which are without legal recourse to an Insured;
and (6) matters which may be deemed uninsurable under the law pursuant
to which this policy shall be construed.
Notwithstanding the foregoing paragraph, Loss shall specifically
include (subject to this policy's other terms, conditions and
limitations, including but not limited to exclusions relating to
profit or advantage, deliberate fraud or deliberate criminal acts):
(1) civil penalties assessed against any Insured Person pursuant to
Section 2(g) (2)(C) of the Foreign Corrupt Practices Act, 15 U.S.C.
ss.78dd-2(g)(2)(C); and (2) solely with respect to Securities Claims,
punitive, exemplary and multiplied damages. Enforceability of this
paragraph shall be governed by such applicable law that most favors
coverage for such penalties and punitive, exemplary and multiple
damages.
In the event of a Claim alleging that the price or consideration paid
or proposed to be paid for the acquisition or completion of the
acquisition of all or substantially all the ownership interest in or
assets of an entity is inadequate, Loss with respect to such Claim
shall not include any amount of any judgment or settlement
representing the amount by which such price or consideration is
effectively increased; provided, however, that this paragraph shall
not apply to Defense Costs or to any Non-Indemnifiable Loss in
connection therewith.
(q) "Management Control" means: (1) owning interests representing more
than 50% of the voting, appointment or designation power for the
selection of a majority of: the Board of Directors of a corporation;
the management committee members of a joint venture; or the members of
the management board of a limited liability company; or (2) having the
right, pursuant to written contract or the by-laws, charter, operating
agreement or similar documents of an Organization, to elect, appoint
or designate a majority of: the Board of Directors of a corporation;
the management committee of a joint venture; or the management board
of a limited liability company.
(r) "No Liability" means a final judgment of no liability obtained: (1)
prior to trial, in favor of each and every Insured named in the Claim,
by reason of a motion to dismiss or a motion for summary judgment,
after the exhaustion of all appeals; or (2) after trial and after the
exhaustion of all appeals, in favor of each and every Insured named in
the Claim. In no event shall the term "No Liability" apply to a Claim
made against an Insured for which a settlement has occurred.
(s) "Non-indemnifiable Loss" means Loss for which an Organization has
neither indemnified nor is permitted or required to indemnify an
Insured Person pursuant to law or contract or the charter, bylaws,
operating agreement or similar documents of an Organization.
4
<PAGE>
(t) Organization means:
(1) the Named Entity;
(2) each Subsidiary; and
(3) in the event a bankruptcy proceeding shall be instituted by or
against the foregoing entities, the resulting
debtor-in-possession (or equivalent status outside the United
States), if any.
(u) "Outside Entity" means any: (1) not-for-profit entity; or (2) other
entity listed as an "Outside Entity" in an endorsement attached to
this policy.
(v) "Outside Entity Executive" means any: (1) Executive of an Organization
who is or was acting at the specific written request or direction of
an Organization as an Executive of an Outside Entity; or (2) any other
person listed as an Outside Entity Executive in an endorsement
attached to this policy.
(w) "Policy Period" means the period of time from the inception date shown
in Item 2 of the Declarations to the earlier of the expiration date
shown in such Item 2 or the effective date of cancellation of this
policy.
(x) "Pollutants" means, 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.
(y) "Securities Claim" means a Claim, other than an administrative or
regulatory proceeding against, or investigation of an Organization,
made against any Insured:
(1) alleging a violation of any federal, state, local or foreign
regulation, rule or statute regulating securities (including but
not limited to the purchase or sale or offer or solicitation of
an offer to purchase or sell securities) which is:
(a) brought by any person or entity alleging, arising out of,
based upon or attributable to the purchase or sale or offer
or solicitation of an offer to purchase or sell any
securities of an Organization; or
(b) brought by a security holder of an Organization with respect
to such security holder's interest in securities of such
Organization; or
(2) brought derivatively on the behalf of an Organization by a
security holder of such Organization.
Notwithstanding the foregoing, the term "Securities Claim" shall
include an administrative or regulatory proceeding against an
Organization, but only if and only during the time that such
proceeding is also commenced and continuously maintained against an
Insured Person.
(z) "Subsidiary" means: (1) any for-profit entity that is not formed as a
partnership of which the Named Entity has Management Control
("Controlled Entity") on or before the inception of the Policy Period
either directly or indirectly through one or more other Controlled
Entities; and (2) any not-for-profit entity under section 501(c)(3) of
the Internal Revenue Code of 1986 (as amended) sponsored exclusively
by an Organization.
(aa) "Wrongful Act" means:
(1) any actual or alleged breach of duty, neglect, error,
misstatement, misleading statement, omission or act or any actual
or alleged Employment Practices Violation:
5
<PAGE>
(i) with respect to any Executive of an Organization, by such
Executive in his or her capacity as such or any matter
claimed against such Executive solely by reason of his or
her status as such;
(ii) with respect to any Employee of an Organization, by such
Employee in his or her capacity as such, but solely in
regard to any: (a) Securities Claim; or (b) other Claim so
long as such other Claim is also made and continuously
maintained against an Executive of an Organization; or
(iii)with respect to any Outside Entity Executive, by such
Outside Entity Executive in his or her capacity as such or
any matter claimed against such Outside Entity Executive
solely by reason of his or her status as such; or
(2) with respect to an Organization, any actual or alleged breach of
duty, neglect, error, misstatement, misleading statement,
omission or act by such Organization, but solely in regard to a
Securities Claim.
3. WORLDWIDE EXTENSION
Where legally permissible, this policy shall apply to any Claim made
against any Insured anywhere in the world.
In regard to Claims brought and maintained solely in a Foreign Jurisdiction
against an Organization formed and operating in such Foreign Jurisdiction
or an Insured Person thereof for Wrongful Acts committed in such Foreign
Jurisdiction, the Insurer shall apply to such Claim(s) those terms and
conditions (and related provisions) of the Foreign Policy registered with
the appropriate regulatory body in such Foreign Jurisdiction that are more
favorable to such Insured than the terms and conditions of this policy.
However, this paragraph shall apply only to Clauses 1-4, 9-13, 15, 16, 18,
20 and 21 of this policy and the comparable provisions of the Foreign
Policy. In addition, this paragraph shall not apply to the non-renewal or
claims made and reported provisions of any policy.
All premiums, limits, retentions, Loss and other amounts under this Policy
are expressed and payable in the currency of the United States of America.
If judgment is rendered, settlement is denominated or other elements of
Loss are stated or incurred in a currency other than United States of
America dollars, payment of covered Loss due under this policy (subject to
the terms, conditions and limitations of this policy) will be made either
in such other currency (at the option of the Insurer and if agreeable to
the Named Entity) or, in United States of America dollars, at the rate of
exchange published in The Wall Street Journal on the date the Insurer's
obligation to pay such Loss is established (or if not published on such
date the next publication date of The Wall Street Journal).
4. EXCLUSIONS
The Insurer shall not be liable to make any payment for Loss in connection
with any Claim made against an Insured:
(a) arising out of, based upon or attributable to the gaining in fact of
any profit or advantage to which the Insured was not legally entitled;
(b) arising out of, based upon or attributable to payments to an Insured
of any remuneration without the previous approval of the stockholders
or members of an Organization, which payment without such previous
approval shall be held to have been illegal;
(c) arising out of, based upon or attributable to the committing in fact
of any deliberate criminal or deliberate fraudulent act by the
Insured;
6
<PAGE>
(d) alleging, arising out of, based upon or attributable to the facts
alleged, or to the same or related Wrongful Acts alleged or contained
in any Claim which has been reported, or in any circumstances of which
notice has been given, under any policy of which this policy is a
renewal or replacement or which it may succeed in time;
(e) alleging, arising out of, based upon or attributable to, as of the
Continuity Date, any pending or prior: (1) litigation; or (2)
administrative or regulatory proceeding or investigation of which an
Insured had notice, or alleging or derived from the same or
essentially the same facts as alleged in such pending or prior
litigation or administrative or regulatory proceeding or
investigation;
(f) with respect to any Outside Entity Executive, for any Wrongful Act
occurring prior to the Continuity Date if any Insured, as of such
Continuity Date, knew or could have reasonably foreseen that such
Wrongful Act could lead to a Claim under this policy;
(g) alleging, arising out of, based upon or attributable to any actual or
alleged act or omission of an Insured Person serving in his or her
capacity as an Executive or an Employee of any entity that is not an
Organization or an Outside Entity, or by reason of his or her status
as an Executive or an Employee of such other entity;
(h) for bodily injury (other than emotional distress or mental anguish),
sickness, disease, or death of any person, or damage to or destruction
of any tangible property, including the loss of use thereof;
(i) which is brought by or on behalf of an Organization or any Insured
Person, other than an Employee of an Organization; or which is brought
by any security holder or member of an Organization, whether directly
or derivatively, unless such security holder's or member's Claim is
instigated and continued totally independent of, and totally without
the solicitation of, or assistance of, or active participation of, or
intervention of, any Executive of an Organization or any Organization;
provided, however, this exclusion shall not apply to:
(1) any Claim brought by an Insured Person in the form of a
cross-claim or third-party claim for contribution or indemnity
which is part of, and results directly from, a Claim that is
covered by this policy;
(2) any Employment Practices Claim brought by an Insured Person,
other than an Insured Person who is or was a member of the Board
of Directors (or equivalent governing body) of an Organization;
(3) in any bankruptcy proceeding by or against an Organization, any
Claim brought by the examiner, trustee, receiver, liquidator or
rehabilitator (or any assignee thereof) of such Organization, if
any;
(4) any Claim brought by any past Executive of an Organization who
has not served as a duly elected or appointed director, officer,
trustee, governor, management committee member, member of the
management board, General Counsel or Risk Manager (or equivalent
position) of or consultant for an Organization for at least four
(4) years prior to such Claim being first made against any
person; or
(5) any Claim brought by an Executive of an Organization formed and
operating in a Foreign Jurisdiction against such Organization or
any Executive thereof, provided that such Claim is brought and
maintained outside the United States, Canada or any other common
law country (including any territories thereof);
(j) for any Wrongful Act arising out of the Insured Person serving as an
Executive of an Outside Entity if such Claim is brought by the Outside
Entity or by any Executive thereof; or which is brought by any
security holder of the Outside Entity, whether
7
<PAGE>
directly or derivatively, unless such security holder's Claim is
instigated and continued totally independent of, and totally without
the solicitation of, or assistance of, or active participation of, or
intervention of the Outside Entity, any Executive of the Outside
Entity or an Organization or any Executive of an Organization;
(k) alleging, arising out of, based upon or attributable to, directly or
indirectly: (i) the actual, alleged or threatened discharge,
dispersal, release or escape of Pollutants; or (ii) any direction or
request to test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize Pollutants, (including but not limited to a
Claim alleging damage to an Organization or its securities holders);
provided, however, that this exclusion shall not apply to
Non-Indemnifiable Loss, other than Non-indemnifiable Loss constituting
Cleanup Costs;
"Cleanup Costs" means expenses (including but not limited to legal and
professional fees) incurred in testing for, monitoring, cleaning up,
removing, containing, treating, neutralizing, detoxifying or assessing
the effects of Pollutants
(1) for emotional distress of any person, or for injury from libel,
slander, defamation or disparagement, or for injury from a violation
of a person's right of privacy; provided, however, this exclusion
shall not apply to an Employment Practices Claim; and
(m) for violation(s) of any of the responsibilities, obligations or duties
imposed upon fiduciaries by the Employee Retirement Income Security
Act of 1974 or amendments thereto, or any similar provisions of any
state, local or foreign statutory or common law.
For the purpose of determining the applicability of the foregoing
Exclusions 4(a) through 4(c) and Exclusion 4(f): (1) the facts pertaining
to and knowledge possessed by any Insured shall not be imputed to any other
Insured Person; and (2) only facts pertaining to and knowledge possessed by
any past, present or future chairman of the board, president, chief
executive officer, chief operating officer, chief financial officer or
General Counsel (or equivalent position) of an Organization shall be
imputed to an Organization.
This Clause 4, Exclusions, shall not be applicable to Crisis Loss.
5. LIMIT OF LIABILITY (FOR ALL LOSS-INCLUDING DEFENSE COSTS)
The Limit of Liability stated in Item 3 of the Declarations is the
aggregate limit of the Insurer's liability for all Loss, under Coverages A,
B, C and D combined, arising out of all Claims first made against each and
every Insured, and all Crisis Loss occurring, during the Policy Period and
the Discovery Period (if applicable). The Limit of Liability for the
Discovery Period and the CrisisFund(SM) shall be part of, and not in
addition to, the Limit of Liability for the Policy Period. Further, a Claim
which is made subsequent to the Policy Period or Discovery Period (if
applicable) which pursuant to Clause 7(b) or 7(c) is considered made during
the Policy Period or Discovery Period shall also be subject to the one
aggregate Limit of Liability stated in Item 3 of the Declarations. The
limit of the Insurer's liability for Crisis Loss and Delisting Crisis Loss
arising from all Crises occurring during the Policy Period, in the
aggregate, shall be the amounts set forth as the CrisisFund(SM). The
CrisisFund(SM). shall be the aggregate limit of the Insurer's liability for
all Crises under this policy regardless of the number of Crises occurring
during the Policy Period.
Defense Costs are not payable by the Insurer in addition to the Limit of
Liability. Defense Costs are part of Loss and as such are subject to the
Limit of Liability for Loss.
8
<PAGE>
6. RETENTION CLAUSE
For each Claim, the Insurer shall only be liable for the amount of Loss
arising from a Claim which is in excess of the applicable Retention amounts
stated in Items 4(a), 4(b) and 4(c) of the Declarations, such Retention
amounts to be borne by an Organization and/or the Insured Person and remain
uninsured, with regard to all Loss other than Non-Indemnifiable Loss. The
Retention amount specified in:
(i) Item 4(a), applies to Defense Costs that arise out of a Securities
Claim;
(ii) Item 4(b) applies to Loss that arises out of an Employment Practices
Claim; and
(iii)Item 4(c) applies to Loss that arises out of any Claim other than a
Securities Claim or an Employment Practices Claim.
A single Retention amount shall apply to Loss arising from all Claims
alleging the same Wrongful Act or related Wrongful Acts.
In the event a Claim triggers more than one of the Retention amounts stated
in Items 4(a), 4(b) and 4(c) of the Declarations, then, as to that Claim,
the highest of such Retention amounts shall be deemed the Retention amount
applicable to Loss (to which a Retention is applicable pursuant to the
terms of this policy) arising from such Claim.
Further, with respect to all Claims, other than Employment Practices
Claims, no Retention shall apply to Loss arising from such Claims and the
Insurer shall reimburse Defense Costs otherwise covered hereunder and paid
by the Insured, in the event of: (1) a determination of No Liability of
each and every Insured against whom the same Claim or related Claims have
been made; or (2) a dismissal or a stipulation to dismiss each and every
Insured against whom the same Claim or related Claims have been made
without prejudice and without the payment of any consideration by or on
behalf of any Insured. However, in the case of (2) above, such
reimbursement shall occur 90 days after the date of dismissal or
stipulation as long as such Claim is not brought (or any other Claim which
is subject to the same single retention by virtue of Clause 6 is not
pending or brought) again within that time, and further subject to an
undertaking by an Organization in a form acceptable to the Insurer that
such reimbursement shall be paid back by such Organization to the Insurer
in the event the Claim (or any other Claim which is subject to the same
single retention by virtue of Clause 6) is brought after such 90-day
period.
No Retention amount is applicable to Crisis Loss or Non-Indemnifiable Loss.
7. NOTICE/CLAIM REPORTING PROVISIONS
Notice hereunder shall be given in writing to the Insurer named in Item 8
of the Declarations at the address indicated in Item 8 of the Declarations.
If mailed, the date of mailing shall constitute the date that such notice
was given and proof of mailing shall be sufficient proof of notice.
(a) An Organization or an Insured shall, as a condition precedent to the
obligations of the Insurer under this policy, give written notice to
the Insurer of a Claim made against an Insured or a Crisis as soon as
practicable: (i) after the Named Entity's Risk Manager or General
Counsel (or equivalent position) first becomes aware of the Claim; or
(ii) the Crisis commences, but in all events no later than either:
(1) the end of the Policy Period or the Discovery Period (if
applicable); or
(2) within 30 days after the end of the Policy Period or the
Discovery Period (if applicable), as long as such Claim was first
made against an Insured within the final 30 days of the Policy
Period or the Discovery Period (if applicable).
9
<PAGE>
(b) If written notice of a Claim has been given to the Insurer pursuant to
Clause 7(a) above, then a Claim which is subsequently made against an
Insured and reported to the Insurer alleging, arising out of, based
upon or attributable to the facts alleged in the Claim for which such
notice has been given, or alleging any Wrongful Act which is the same
as or related to any Wrongful Act alleged in the Claim of which such
notice has been given, shall be considered related to the first Claim
and made at the time such notice was given.
(c) If during the Policy Period or during the Discovery Period (if
applicable) an Organization or an Insured shall become aware of any
circumstances which may reasonably be expected to give rise to a Claim
being made against an Insured and shall give written notice to the
Insurer of the circumstances, the Wrongful Act allegations anticipated
and the reasons for anticipating such a Claim, with full particulars
as to dates, persons and entities involved, then a Claim which is
subsequently made against such Insured and reported to the Insurer
alleging, arising out of, based upon or attributable to such
circumstances or alleging any Wrongful Act which is the same as or
related to any Wrongful Act alleged or contained in such
circumstances, shall be considered made at the time such notice of
such circumstances was given.
8. DEFENSE COSTS, SETTLEMENTS, JUDGMENTS (INCLUDING THE ADVANCEMENT OF DEFENSE
COSTS)
Under Coverages A, B and C of this policy, except as hereinafter stated,
the Insurer shall advance, excess of any applicable retention amount,
covered Defense Costs no later than ninety (90) days after the receipt by
the Insurer of such defense bills. Such advance payments by the Insurer
shall be repaid to the Insurer by each and every Insured or Organization,
severally according to their respective interests, in the event and to the
extent that any such Insured or Organization shall not be entitled under
this policy to payment of such Loss.
The Insurer does not, however, under this policy, assume any duty to
defend. The Insureds shall defend and contest any Claim made against them.
The Insureds shall not admit or assume any liability, enter into any
settlement agreement, stipulate to any judgment, or incur any Defense Costs
without the prior written consent of the Insurer. Only those settlements,
stipulated judgments and Defense Costs which have been consented to by the
Insurer shall be recoverable as Loss under the terms of this policy. The
Insurer's consent shall not be unreasonably withheld, provided that the
Insurer shall be entitled to effectively associate in the defense, the
prosecution and the negotiation of any settlement of any Claim that
involves or appears reasonably likely to involve the Insurer.
The Insurer shall have the right to effectively associate with each and
every Organization and Insured Person in the defense and prosecution of any
Claim that involves, or appears reasonably likely to involve, the Insurer,
including, but not limited to, negotiating a settlement. Each and every
Organization and Insured Person shall give the Insurer full cooperation and
such information as it may reasonably require.
Notwithstanding any of the foregoing, if all Insured defendants are able to
dispose of all Claims which are subject to one retention amount (inclusive
of Defense Costs) for an amount not exceeding any applicable retention
amount, then the Insurer's consent shall not be required for such
disposition.
No Organization is covered in any respect under Coverage A or Coverage C.
An Organization is covered, subject to the policy's terms, conditions and
limitations only with respect to: (i) its indemnification of its Insured
Persons under Coverage B(ii) as respects a Claim against such Insured
Persons; and (2) under Coverage B(i) for a Securities Claim. Accordingly,
the Insurer has no obligation under this policy for covered Defense Costs
10
<PAGE>
incurred by, judgments against or settlements by an Organization arising
out of a Claim made against an Organization other than a covered Securities
Claim, or any obligation to pay Loss arising out of any legal liability
that an Organization has to a claimant, except as respects a covered
Securities Claim against such Organization.
With respect to: (i) Defense Costs jointly incurred by; (ii) any joint
settlement entered into by; and/or (iii) any judgment of joint and several
liability against any Organization and any Insured in connection with any
Claim other than a Securities Claim, any such Organization and any such
Insured and the Insurer agree to use their best efforts to determine a fair
and proper allocation of the amounts as between any such Organization, any
such Insured and the Insurer, taking into account the relative legal and
financial exposures, and the relative benefits obtained by any such Insured
and any such Organization. In the event that a determination as to the
amount of Defense Costs to be advanced under the policy cannot be agreed
to, then the Insurer shall advance Defense Costs excess of any applicable
retention amount which the Insurer states to be fair and proper until a
different amount shall be agreed upon or determined pursuant to the
provisions of this policy and applicable law.
This Clause 8 shall not be applicable to Crisis Loss. Nevertheless the
Insurer does not, under this policy, assume any duty to defend.
9. PRE-AUTHORIZED SECURITIES DEFENSE ATTORNEYS
Affixed as Appendix A hereto and made a part of this policy is a list of
Panel Counsel law firms ("Panel Counsel Firms"). The list provides the
Insureds with a choice of law firms from which a selection of legal counsel
shall be made to conduct the defense of any Securities Claim made against
such Insureds.
The Insureds shall select a Panel Counsel Firm to defend the Securities
Claim made against the Insureds in the jurisdiction in which the Securities
Claim is brought. In the event the Claim is brought in a jurisdiction not
included on the list, the Insureds shall select a Panel Counsel Firm in the
listed jurisdiction which is the nearest geographic jurisdiction to either
where the Securities Claim is brought or where the corporate headquarters
of the Named Entity is located. In such instance the Insureds also may,
with the express prior written consent of the Insurer, which consent shall
not be unreasonably withheld, select a non-Panel Counsel Firm in the
Jurisdiction in which the Securities Claim is brought to function as "local
counsel" on the Claim to assist the Panel Counsel Firm which will function
as "lead counsel" in conducting the defense of the Securities Claim.
With the express prior written consent of the Insurer, an Insured may
select a Panel Counsel Firm different from that selected by another Insured
defendant if such selection is required due to an actual conflict of
interest or is otherwise reasonably justifiable. The list of Panel Counsel
Firms may be amended from time to time by the Insurer. However, no firm
shall be removed from the specific list attached to this policy during the
Policy Period, without the consent of the Named Entity.
10. DISCOVERY CLAUSE
Except as indicated below, if the Named Entity shall cancel or the Named
Entity or the Insurer shall refuse to renew this policy, the Named Entity
shall have the right to a period of either one, two or three years
following the effective date of such cancellation or nonrenewal (the
"Discovery Period") upon payment of the respective "Additional Premium
Amount" described below in which to give to the Insurer written notice
pursuant to Clause 7(a) and 7(c) of the policy of: (i) Claims first made
against an Insured, and (ii) circumstances of which an Organization or an
Insured shall be come aware, in either
11
<PAGE>
case during said Discovery Period and solely with respect to a Wrongful Act
occurring prior to the end of the Policy Period and otherwise covered by
this policy.
The Additional Premium Amount for: (1) one year shall be no more than 75%
of the Full Annual Premium; (2) two years shall be no more than 150% of the
Full Annual Premium; and (3) three years shall be no more than 225% of the
Full Annual Premium. As used herein, " Full Annual Premium" means the
premium level in effect immediately prior to the end of the Policy Period.
Notwithstanding the first paragraph of Clause 5, if the Named Entity shall
cancel or the Insurer or the Named Entity shall refuse to renew this
policy, then the Named Entity shall also have the right, to request an
offer from the Insurer of a Discovery Period (with respect to Wrongful Acts
occurring prior to the end of the Policy Period) with an aggregate limit of
liability applicable to Claims made against the Insured during such
Discovery Period which is in addition to, and not part of, the applicable
Limit of Liability set forth in Item 3 of the Declarations. The Insurer
shall quote such a Discovery Period pursuant to such terms, conditions,
exclusions and additional premium as it deems appropriate in its sole and
absolute discretion.
In the event of a Transaction as defined in Clause 12(a), the Named Entity
shall have the right to request an offer from the Insurer of a Discovery
Period (with respect to Wrongful Acts occurring prior to the effective time
of the Transaction). The Insurer shall offer such Discovery Period pursuant
to such terms, conditions, exclusions and additional premium as the Insurer
may reasonably decide. In the event of a Transaction, the right to a
Discovery Period shall not otherwise exist except as indicated in this
paragraph.
The Discovery Period is not cancelable and the additional premium charged
shall be fully earned at inception. This Clause 10 shall not apply to any
cancellation resulting from nonpayment of premium. The rights contained in
this Clause 10 shall terminate unless written notice of election of a
Discovery Period together with any additional premium due is received by
the Insurer no later than thirty (30) subsequent to the effective date of
the cancellation, nonrenewal or Transaction.
11. CANCELLATION CLAUSE
This policy may be canceled by the Named Entity at any time only by mailing
written prior notice to the Insurer or by surrender of this policy to the
Insurer or its authorized agent. This policy may only be canceled by or on
behalf of the Insurer in the event of non-payment of premium by the Named
Entity. In the event of non-payment of premium by the Named Entity, the
Insurer may cancel this policy by delivering to the Named Entity or by
mailing to the Named Entity, by registered, certified, or other first class
mail, at the Named Entity's address as shown in Item 1(a) of the
Declarations, written notice stating when, not less than 15 days
thereafter, the cancellation shall be effective. The mailing of such notice
as aforesaid shall be sufficient proof of notice. The Policy Period
terminates at the date and hour specified in such notice, or at the date
and time of surrender. The Insurer shall have the right to the premium
amount for the portion of the Policy Period during which the policy was in
effect.
If this policy shall be canceled by the Named Entity, the Insurer shall
retain the customary short rate proportion of the premium herein. If the
period of limitation relating to the giving of notice as set forth in this
Clause 11 is also set forth in any law controlling the construction
thereof, then such period shall be deemed to be amended so as to be equal
to the minimum period of limitation set forth in the controlling law.
12
<PAGE>
12. ORGANIZATIONAL CHANGES
(a) If during the Policy Period:
(1) the Named Entity shall consolidate with, merge into, or sell all
or substantially all of its assets to any other person or entity
or group of persons or entities acting in concert; or
(2) any person or entity or group of persons or entities acting in
concert shall acquire Management Control of the Named Entity;
(any of such events being a "Transaction"), then this policy shall
continue in full force and effect as to Wrongful Acts occurring prior
to the effective time of the Transaction, but there shall be no
coverage afforded by any provision of this policy for any actual or
alleged Wrongful Act occurring after the effective time of the
Transaction. This policy may not be canceled after the effective time
of the Transaction and the entire premium for this policy shall be
deemed earned as of such time. The Named Entity shall also have the
right to an offer by the Insurer of a Discovery Period described in
the fourth paragraph of Clause 10 of this policy.
(b) Subsidiary Additions: "Subsidiary" also means any for-profit entity
that is not formed as a partnership of which the Named Entity first
had Management Control during the Policy Period, whether directly or
indirectly through one or more other Subsidiaries, and:
(1) whose assets total less than 25% of the total consolidated assets
of each and every Organization as of the inception date of this
policy; or
(2) whose assets total 25% or more than the total consolidated assets
of each and every Organization as of the inception date of this
policy, but such entity shall be a "Subsidiary" only: (i) for a
period of sixty (60) days from the date the Named Entity first
had Management Control of such entity; or (ii) until the end of
the Policy Period, which ever ends or occurs first (hereinafter
"Auto-Subsidiary Period");
provided that the Named Entity or any other Insured shall report such
Subsidiary to the Insurer, in writing, prior to the end of the Policy
Period.
The Insurer shall extend coverage for any Subsidiary described in
12(b)(2) above, and any Insured Person thereof, beyond its respective
Auto-Subsidiary Period if during such Auto-Subsidiary Period, the
Named Entity shall have provided the Insurer with full particulars of
the new Subsidiary and agreed to any additional premium and amendment
of the provisions of this policy required by the Insurer relating to
such Subsidiary. Further, coverage as shall be afforded to any
Subsidiary and any Insured Person thereof is conditioned upon the
Named Entity paying when due any additional premium required by the
Insurer relating to such Subsidiary.
(c) Insured Persons and Outside Entity Executives: Coverage will
automatically apply to all new Insured Persons of and Outside Entity
Executives of an Organization following the inception date of this
policy.
(d) Other Organizational Changes: In all events, coverage as is afforded
under this policy with respect to a Claim made against any
Organization and/or any Insured Person thereof shall only apply for
Wrongful Acts committed or allegedly committed after the effective
time such Organization became an Organization and such Insured Person
became an Insured Person, and prior to the effective time that such
Organization ceases to be an Organization or such Insured Person
ceases to be an Insured Person. An Organization ceases to be an
Organization when the Named Entity no longer maintains Management
Control of an Organization either directly or indirectly through one
or more of its Subsidiaries.
13
<PAGE>
13. SUBROGATION
In the event of any payment under this policy, the Insurer shall be
subrogated to the extent of such payment to all of each and every
Organization's and Insured's rights of recovery thereof, and each such
Organization and Insured shall execute all papers required and shall do
everything that may be necessary to secure such rights including the
execution of any and all documents necessary to enable the Insurer
effectively to bring suit in the name of each such Organization and each
such Insured. In no event, however shall the Insurer exercise its rights of
subrogation against an Insured under this policy unless such Insured has
been convicted of a deliberate criminal act, or been determined to have in
fact committed a deliberate fraudulent act, or been determined to have in
fact obtained any profit or advantage to which such Insured was not legally
entitled.
14. OTHER INSURANCE AND INDEMNIFICATION
Such insurance as is provided by this policy shall apply only as excess
over any other valid and collectible insurance, unless such other insurance
is written only as specific excess insurance over the Limit of Liability
provided by this policy. This policy shall specifically be excess of any
other valid and collectible insurance pursuant to which any other insurer
has a duty to defend a Claim for which this policy may be obligated to pay
Loss.
In the event of a Claim made against an Outside Entity Executive, coverage
as is afforded by this policy, whether under Coverage B(ii) or Coverage C,
shall be specifically excess of: (1) any indemnification provided by an
Outside Entity; and (2) any insurance coverage afforded to an Outside
Entity or its Executives applicable to such Claim. Further, in the event
such other Outside Entity insurance is provided by the Insurer or any other
company of American International Group, Inc. (AIG) (or would be provided
but for the application of the retention amount, exhaustion of the limit of
liability or failure to submit a notice of a claim as required) then the
Insurer's maximum aggregate Limit of Liability for all Loss under this
policy, as respects any such Claim, shall be reduced by the amount of the
limit of liability (as set forth on the Declarations) of the other AIG
insurance provided to such Outside Entity.
15. NOTICE AND AUTHORITY
It is agreed that the Named Entity shall act on behalf of its Subsidiaries
and each and every Insured with respect to the giving of notice of Claim,
the giving and receiving of notice of cancellation, the payment of premiums
and the receiving of any return premiums that may become due under this
policy, the receipt and acceptance of any endorsements issued to form a
part of this policy and the exercising or declining of any right to a
Discovery Period.
16. ASSIGNMENT
This policy and any and all rights hereunder are not assignable without the
written consent of the Insurer.
17. ALTERNATIVE DISPUTE RESOLUTION PROCESS
It is hereby understood and agreed that all disputes or differences which
may arise under or in connection with this policy, whether arising before
or after termination of this policy, including any determination of the
amount of Loss, shall be submitted to the alternative dispute resolution
("ADR") process set forth in this clause.
Either the Insurer or an Insured may elect the type of ADR process
discussed below; provided, however, that such insured shall have the right
to reject the Insurer's choice of the type of ADR process at any time prior
to its commencement, in which case such Insured's choice of ADR process
shall control.
14
<PAGE>
The Insurer and each and every Insured agrees that there shall be two
choices of ADR process: (1) non-binding mediation administered by the
American Arbitration Association, in which the Insurer and any such Insured
shall try in good faith to settle the dispute by mediation under or in
accordance with its then-prevailing Commercial Mediation Rules; or (2)
arbitration submitted to the American Arbitration Association in accordance
with its then-prevailing Commercial Arbitration Rules, in which the
arbitration panel shall consist of three disinterested individuals. In
either mediation or arbitration, the mediator or arbitrators shall have
knowledge of the legal, corporate management, or insurance issues relevant
to the matters in dispute. The mediator or arbitrators shall also give due
consideration to the general principles of the law of the state where the
Named Entity is incorporated in the construction or interpretation of the
provisions of this policy. In the event of arbitration, the decision of the
arbitrators shall be final and binding and provided to both parties, and
the arbitrators' award shall not include attorneys fees or other costs. In
the event of mediation, either party shall have the right to commence a
judicial proceeding; provided, however, that no such judicial proceeding
shall be commenced until the mediation shall have been terminated and at
least 120 days shall have elapsed from the date of the termination of the
mediation. In all events, each party shall share equally the expenses of
the ADR process.
Either choice of ADR process may be commenced in New York, New York;
Atlanta, Georgia; Chicago, Illinois; Denver, Colorado; or in the state
indicated in Item 1(a) of the Declarations as the mailing address for the
Named Entity. The Named Entity shall act on behalf of each and every
Insured in deciding to proceed with an ADR process under this clause.
18. ACTION AGAINST INSURER
Except as provided in Clause 17 of the policy, no action shall lie against
the Insurer unless, as a condition precedent thereto, there shall have been
full compliance with all of the terms of this policy, or until the amount
of the Insured's obligation to pay shall have been finally determined
either by judgment against such Insured after actual trial or by written
agreement of the Insured, the claimant and the Insurer.
Any person or organization or the legal representative thereof who has
secured such judgment or written agreement shall thereafter be entitled to
recover under this policy to the extent of the insurance afforded by this
policy. No person or organization shall have any right under this policy to
join the Insurer as a party to any action against any Insured or
Organization to determine the Insured's liability, nor shall the Insurer be
impleaded by any Insured Person, their spouse, any Organization or any
legal representative of the foregoing.
19. BANKRUPTCY
Bankruptcy or insolvency of any Organization or any Insured Person shall
not relieve the Insurer of any of its obligations hereunder.
It is further understood and agreed that the coverage provided under this
policy is intended to protect and benefit the Insured Persons. Further, if
a liquidation or reorganization proceeding is commenced by the Named Entity
and/or any other Organization (whether voluntarily or involuntarily) under
Title 11 of the United States Code (as amended), or any similar state,
local or foreign law (collectively "Bankruptcy Law") then, in regard to a
covered Claim under this policy, the Insureds hereby:
(a) waive and release any automatic stay or injunction to the extent it
may apply in such proceeding to the proceeds of this policy under such
Bankruptcy Law; and
(b) agree not to oppose or object to any efforts by the Insurer or any
Insured to obtain relief from any stay or injunction applicable to the
proceeds of this policy as a result of the commencement of such
liquidation or reorganization proceeding.
15
<PAGE>
20. SPOUSAL AND LEGAL REPRESENTATIVE EXTENSION
If a Claim against an Insured Person includes a Claim against: (i) the
lawful spouse of such Insured Person; or (ii) a property interest of such
spouse, and such Claim arises from any actual or alleged Wrongful Act of
such Insured Person, this policy shall cover Loss arising from the Claim
made against that spouse or the property of that spouse to the extent that
such Loss does not arise from a Claim for any actual or alleged act, error
or omission of such spouse. This policy shall cover Loss arising from a
Claim made against the estates, heirs, or legal representatives of any
deceased Insured Person, and the legal representatives of any Insured
Person, in the event of incompetency, insolvency or bankruptcy, who was an
Insured Person at the time the Wrongful Acts upon which such Claim is based
were committed.
21. RENEWAL APPLICATION PROCEDURE
If this policy is a renewal of, a replacement of, or succeeds in time any
policy (providing similar coverage) issued by the Insurer, or any of its
affiliates, then in granting coverage under this policy it is agreed that
the Insurer has relied upon the Application as being accurate and complete
in underwriting this policy. This Clause 21 together with the Application
constitute the complete Application that is the basis of this policy and
form a part hereof, and is material to the risk assumed by the Insurer. No
written renewal application form need be completed by the Named Entity in
order to receive a renewal quote from the Insurer, although the Insurer
reserves the right to require specific information upon renewal.
22. ORDER OF PAYMENTS
In the event of Loss arising from a covered Claim for which payment is due
under the provisions of this policy, then the Insurer shall in all events:
(a) first, pay Loss for which coverage is provided under Coverage A and
Coverage C of this policy; then
(b) only after payment of Loss has been made pursuant to Clause 22(a)
above, with respect to whatever remaining amount of the Limit of
Liability is available after such payment, at the written request of
the chief executive officer of the Named Entity, either pay or
withhold payment of such other Loss for which coverage is provided
under Coverage B(ii) of this policy; and then
(c) only after payment of Loss has been made pursuant to Clause 22(a) and
Clause 22(b) above, with respect to whatever remaining amount of the
Limit of Liability is available after such payment, at the written
request of the chief executive officer of the Named Entity, either pay
or withhold payment of such other Loss for which coverage is provided
under Coverages B(i) and D of this policy.
In the event the Insurer withholds payment pursuant to Clause 22(b) and/or
Clause 22(c) above, then the Insurer shall at such time and in such manner
as shall be set forth in written instructions of the chief executive
officer of the Named Entity remit such payment to an Organization or
directly to or on behalf of an Insured Person.
The bankruptcy or insolvency of any Organization or any Insured Person
shall not relieve the Insurer of any of its obligations to prioritize
payment of covered Loss under this policy pursuant to this Clause 22.
23. HEADINGS
The descriptions in the headings of this policy are solely for convenience,
and form no part of the terms and conditions of coverage.
16
<PAGE>
-1-
APPENDIX A
PANEL COUNSEL
California
----------
Brobeck, Phleger & Harrison
Spear Street Tower
One Market
San Francisco, CA 94105
Contact:
Tower C. Snow Jr. 415-442-0900
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071-3197
Contact:
Robert S. Warren 213-229-7326
Philip Bosl 213-229-7543
Wayne W. Smith 213-229-7464
Heller, Ellman, White & McAuliffe
333 Bush Street San Francisco,
CA 94104 Main Tel:
Contact: 415-772-6000
Douglas N. Schwab
M. Laurence Popofsky
Heller, Ellman, White & McAuliffe
525 University Avenue
Palo Alto, CA 94301
Contact:
Norman J. Blears 415-324-7000
Irell & Manella
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067
Contact:
Richard Borow 310-277-1010
Latham & Watkins
633 West Fifth Avenue
Suite 4000
Los Angeles CA, 90071-2007
Contact:
Hugh Stevens Wilson 213-485-1234
Latham & Watkins
505 Montgomary Street
Suite 1900
San Francisco, CA 94111
Contact:
Paul H. Dawes 415-391-0600
McCutchen Doyle, Brown & Emerson
355 South Grand Avenue
Suite 4400
Los Angeles, CA 90071-1560
Contact:
John C. Morrissey 213-680-6400
McCutchen, Doyle, Brown & Emerson
Three Embarcadero Center
San Francisco, CA 94111
Contact:
David M. Balabanian 415-393-2000
Mary Huser 415-393-2000
Morrison & Foerster
425 Market Street
San Francisco, CA 94104-2482
Contact:
Paul T. Friedman 415-268-7444
Morrison & Foerster
555 West 5th Street - Suite 3500
Los Angles, CA 90013-1024
Contact:
Rober S. Stern 213-892-5464
Munger, Tolles & Olson
355 South Grand Avenue-35th Floor
Los Angeles, CA 90071-1560
Contact:
Dennis L. Kinnaird 213-683-9264
John W. Spiegel 213-683-9152
O'Melveny & Myers
400 South Hope Street
Los Angeles, CA 90071-2899
Main Tel: 213-669-6000
Contact:
Seth Aronson
Robert Vanderet
O'Melveny & Myers
610 Newport Center
Newport Beach, CA 92660
Contact:
Phillip Kaplan 714-760-9600
<PAGE>
-2-
APPENDIX A (continued)
PANEL COUNSEL
O'Melveny & Myers
275 Battery Street
San Francisco, CA 94111
Contact:
Richard Warmer 415-984-8700
Orrick Herrington & Sutcliffe
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, CA 94111
Main Tel: 415-773-5344
Contact:
William Alderman
W. Reece Bader
Richard J. Lucas
Pillsbury Madison & Sutro
2550 Hanover st
Palo Alto, Ca 94304
Contact:
Walter Robinson 650-233-4500
Pillsbury Madison & Sutro
725 South Figueroa Street
Suite 1200
Los Angeles CA 90017
Contact:
Steve 0. Kramer 213-488-7100
Pillsbury Madison & Sutro
101 West Broadway
Suite 1800
San Diego, CA 92101
Contact:
Richard Seigal 619-234-5000
Sherman & Sterling
555 California Street
San Francisco, CA 94104
Contact:
Susan Samuels Muck 415-616-1100
Dean Krystowski
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, CA 90071
Main Tel: 213-687-5000
Contact:
Frank Rothman
James E. Lyons
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo, Alto, CA 94304-1050
Main Tel: 415-493-9300
Contact:
Bruce G. Vanyo
Steven M. Schatz
Boris Feldman
District of Columbia
--------------------
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004-1202
Contact:
Scott Schreiber 202-942-5672
Davis, Polk & Wardwell
1300 I Street, N.W.
Washington, DC 20005
Main Tel: 202-962-7000
Contact
Scott W. Muller
Greenberg Traurig
1300 Connecticut Avenue, N.W.
Washington, D.C. 20036
Contact:
Joe Reeder 202-331-3100
C. Allen Foster
Gibson, Dunn & Crutcher
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5306
Contact:
F. Joseph Warin 202-887-3609
Patton Boggs, L.L.P.
2550 M Street N.W.
Washington, D.C. 20037
Contact:
Lanny Davis 202-457-6000
Eric Kuwana
Sherman & Sterling
801 Pennsylvania Avenue, N.W.
Washington, DC 20004-2604
Main Tel: 202-508-8000
Contact:
Thomas S. Martin
Jonathan L. Greenblat
Willkie Farr & Gallagher
Three Lafayette Centre
1155 21st Street N.W.
Washington, D.C. 20036-3384
Contact:
Kevin B. Clark 202-328-8000
<PAGE>
-3-
APPENDIX A (continued)
PANEL COUNSEL
Florida
-------
Fowler White, Gillen, Boggs, Villareal
and Banker, P.A.
501 East Kennedy Boulevard
Suite 1700
Tampa, Fl 33602
Contact:
W. Donald Cox 813-228-7411
Fowler, White, Gillen, Boggs, Villareal
and Banker, P.A.
601 Cleveland Street
Suite 800
Clearwater Florida 34615
Contact:
Burton W. Wiand 813-446-8525
Greenberg Traurig
1221 Brickell Avenue
Miami, Florida 33131
Contact:
Hillarie Bass 305-579-0500
Katz, Barron, Squtiero, Faust & Berman, P.A.
2699 South Bayshore Drive
Seventh Floor
Miami, Florida 33133-5408
Contact:
Richard E. Berman 305-856-2444
Zuckerman Spaeder Taylor & Evans LLP
900 Miami Center
201 South Biscayne Boulevard
Miami, Fl 33131
Main Tel: 305-358-5000
Ronald B. Ravikoff
Thomas J. Meeks
Guy A. Rasco
Steel, Hector & Davis LLP
200 South Biscayne Boulevard
Miami, FL 33131-2398
Contact:
Lewis F. Murphy, P.A. 305-577-2957
Holland & Knight
400 North Ashley Drive
Suite 2300
Tampa, FL 33602
Main Tel: 813-227-8500
Contact:
Frederick S. Schrils
Calvin Hayes
Gregory P. Hansel
Holland & Knight
50 North Laura Street
Suite 3900
Jacksonville, Fl 32202
Main Tel: 904-353-2000
Contact:
George E. Schultz, Jr.
Holland & Knight
701 Brickell Avenue
Suite 3000
Miami, FL 33131
Main Tel: 305-374-8500
Contact:
Marty Steinberg
William F. Hamilton
Holland & Knight
315 South Calhoun Street
Suite 600
Tallahassee, FL 32301
Main Tel: 904-224-7000
Contact:
Robert R. Feagin, III
Georgia
-------
Alston & Bird
One Atlantic Center
1201 W. Peachtree Street
Atlanta, GA 30309
Contact:
Peter Q. Bassett 404-881-7343
Mary C. Gill 404-881-7276
King & Spalding
191 Peachtree Street
Atlanta, GA 30303-1763
Main Tel: 404-572-4600
Contact:
Grippin B. Bell
Michael R. Smith
Paul Hastings Janofsky & Walker, LLP
600 Peachtree Street, N.W.
Atlanta, GA 30308
Contact:
J. Allen Maines 404-815-2500
<PAGE>
-4-
APPENDIX A (continued)
PANEL COUNSEL
Smith Gambrell & Russel
3343 Peachtree Road, N.E.-Suite 1800
Atlanta, GA 30326-1010
Contact:
David A. Handley 404-264-2671
Robert C. Schwartz 404-264-2658
Illinois
--------
Jenner & Block
One IBM Plaza
Chicago, IL 60611
Contact:
Jerold Solovy 312-222-9350
Freeborn & Peters
311 South Wacker Drive
Suite 3000
Chicago, IL 60606-6677
Contact:
David H. Kistenbroker 312-360-6567
Kirkland & Ellis
2000 East Randolph Drive
Chicago, IL 60601
Main Tel: 312-861-2000
Contact:
Garrett B. Johnson
Robert J. Kopecky
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Contact:
Walter C. Carlson 312-853-7734
Robert A. Downing 312-853-7434
Eugene A. Schoon 312-853-7279
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, IL 60606
Main Tel: 312-407-0700
Contact: Susan Getzendanner
Timothy A. Nelsen
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606
Contact:
Harold D. Shapiro 312-876-8035
Massachusetts
-------------
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Contact:
Don M. Kennedy 617-570-1000
Hale & Dorr
60 State Street
Boston, MA 02109
Main Tel: 617-526-6000
Contact:
Jeffrey Rudman
John Batter
Mintz, Levin, Cohn, Feris, Glovsky & Popeo
One Financial Center
Boston, MA 02111
Contact:
Peter M. Saparoff 617-542-6000
Palmer & Dodge
One Beacon Street
Boston, MA 02108
Contact:
Peter S. Terris 617-573-0100
Ropes & Gray
One International Plaza
Boston, MA 02110-2624
Contact:
John D. Donovan, Jr. 617-951-7566
Skadden, Arps, Slate, Meager & Flom
One Beacon Street
Boston, Ma 02108
Main Tel: 617-573-4800
Contact:
Thomas A. Dougherty
George J. Skelly
<PAGE>
-5-
APPENDIX A (continued)
PANEL COUNSEL
Testa, Hurwitz & Thibeault
High Street Tower
125 High Street
Boston, MA 02110
Contact:
Brian E. Pastuszenski 617-248-7000
Edmund G. Case
New York
--------
Arnold & Porter
399 Park Avenue
New York, NY 10022-4690
Contact:
Scott Schreiber 212-715-1000
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Main Tel: 212-701-3000
Contact:
Charles A. Gilman
Immanuel Kohn
Thomas J. Kavaler
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Main Tel: 212-450-4000
Contact:
Henry L. King
Daniel F. Kolb
Fried, Frank, Harris, Shiver & Jacobson
One New York Plaza
New York, NY 10004
Contact:
Sheldon Raab 212-859-8090
Greenberg Traurig
200 Park Avenue
New York City, NY 10166
Contact:
Marshall Fishman 212-801-6400
Joe Reeder 212-801-3200
Kaye, Scholer, Fiernan, Hays & Handler
425 Park Avenue
New York, NY 10022
Contact:
Frederic W. Yerman 212-836-8663
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, NY 10022-4675
Main Tel: 212-446-4800
Contact:
Yosef J. Riemer
Frank M. Holozubiec
Kramer Levin Naftalis & Frankel
919 Third Avenue
New York, NY 10022
Contact:
Gary Naftalis 212-715-3100
Mikbank, Tweed Hadley & McCloy
One Chase Manhattan Plaza
New York, NY 10005
Contact: 212-530-5554
Russell Brooks
Paul Weiss Rifkind Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Contact:
Martin Flumenbaum 212-373-3000
Claudia Hammerman
Roger & Wells
200 Park Avenue
New York, NY 10166
Contact:
James Benedict 212-878-8000
John Carroll
Richard Cirillo
Shearman & Sterling
Citicorp Center
153 East 53rd Street
New York, NY 10022-4676
Contact
Paul Wickes 212-848-8000
Stuart Baskin
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Main Tel: 212-455-2000
Contact:
Michael J. Chepiga
Bruce P. Angiollo
Roy L. Reardon
Skadden, Arps, Slate, Meager & Folm
919 Third Avenue
New York, NY 10022
Main Tel: 212-735-3000
Contact:
Barry H. Garfinkel
Jonathan J. Lerner
<PAGE>
-6-
APPENDIX A (continued)
PANEL COUNSEL
Stroock, & Stroock & Lavan
Seven Hanover Square
New York, NY 10004-2696
Main Tel: 212-806-5400
Contact
Melvin A Brosterman
Lawrence Greenwald
Alvin K. Hellerstein
Sullivan & Cromwell
125 Broad Street
New York, NY 10004-2498
Main Tel: 212-558-4000
Contact:
John L. Warden
Philip L. Grahman, Jr.
Wachtell, Lipton, Rosen & Katz
51 West 57th Street
New York, NY 10019
Contact:
Norman Redlich 216-371-9200
Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
Contact:
Irwin Warren 213-310-8000
Wilkie, Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-4677
Main Tel: 212-728-8000
Contact:
David L. Foster
Richard L. Posen
Michael R. Young
Ohio
----
Jones Day, Reavis & Pogue
North Point
Lakeside Avenue
Cleveland, OH 44114
Contact:
John Newman Jr. 216-586-3939
Philadelphia
------------
Blank, Rome, Comisky & McCauley
1200 Four Penn Center
Philadelphia, PA 19103
Main Tel: 215-569-5500
Contact:
Alexander D. Bono
Richard P. McElroy
Jerome R. Richter
Cozen and O'Connor
The Atrium
1900 Market Street
Philadelphia, PA 19103
Main Tel: 215-665-2000
Contact:
Patrick J. O'Connor
Thomas C. Zielinski
H. Robert Fiebach
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Main Tel: 215-994-4000
Contact:
Seymour Kurland
Jeffrey G. Weil
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Main Tel: 215-963-5000
Contact:
Gregory M. Harvey
Marc J. Sonnenfeld
Elizabeth Hoop Fay
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Main Tel: 215-981-4000
Contact:
Jon A. Baughman
Laurence Z. Shiekman
<PAGE>
-7-
APPENDIX A (continued)
PANEL COUNSEL
Wolf, Block, Schorr and Solis-Cohen
12th Floor-Packard Building S.E.
Corner 15th & Chestnut Streets
Philadelphia, PA 19102-2678
Contact:
Jay A. Dubow 215-977-2058
Pittsburgh
----------
Buchanan Ingersoll, P.C.
One Oxford Center, 20th Fl.
301 Grant Street
Pittsburgh, PA 15219-8800
Contact:
John R. Leathers 412-562-1880
Washington
----------
Foster Pepper & Shefelman
1111 Third Avenue, Suite 3400
Seattle, Washington 98101-2399
Main Tel: 206-447-4400
Main Fax: 206-447-9700
Contact:
Peter S. Ehrlichman 206-447-8998
Stellman Keehnel 206-447-8935
Davis Wright Tremain
2600 Century Square
1501 Fourth Avenue
Seattle, Washington 98101-1688
Main Tel: 206-622-3150
Contact:
Stephen M. Rummage 206-628-7755
Bogle & Gates
Two Union Square
601 Union Street
Seattle, Washington 98101-2346
Main Tel: 206-682-5151
Contact:
Evan Schweb 206-621-1478
Arthur C. Claflin 206-621-1448
Heller, Ehrman, White & McAuliffe
701 Fifth Avenue
Seattle, WA 98104-7098
Main Tel: 206-447-0900
Main Fax: 206-447-0849
Contact:
George E. Greer
Lane Powell Spearslubersky
1420 Fifth Avenue, Suite 4100
Seattle, Washington 98101-2338
Main Tel: 206-223-7000
Main Fax: 206-223-7107
Contact:
James L. Robart
Rudy A. Englund
James B. Stoetzer
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
Main Tel: 206-583-8888
Main Fax: 206-583-8500
Contact:
Ronald L. Berenstain
Harry H. Schneider
Texas
-----
Akin, Gump, Statauss, Haurer & Feld, L.L.P.
1700 Pacific Avenue
Suite 4100
Dallas, TX 75201-4618
Main Tel: 214-969-2800
Contact:
Lou Bickel
Mike Lowenberg
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Pennzoil Place - South Tower
711 Louisiana Street
Suite 1900
Houston, TX 77002
Main Tel: 713-220-5800
Contact:
Charlie Moore
Paula Hinton
Baker & Botts, L.L.P.
910 Louisianna
Houston, TX 77002-4995
Main Tel: 713-229-1234
Contact:
William C. Slusser
Harold L. Metts
<PAGE>
-8-
APPENDIX A (continued)
PANEL COUNSEL
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, TX 75201-2916
Contact:
Ronald L. Palmer 214-953-6500
Fulbright & Jaworski, L.L.P.
1301 McKinney
Suite 5100
Houston, TX 77010
Main Tel: 713-651-5151
Contact:
Frank G. Jones
Richard N. Carrell
Fullbright & Jaworski, L.L.P.
2200 Ross Avenue
Suite 2800
Dallas, TX 75201
Contact:
Karl G. Dial 214-855-8000
Haynes & Boone, L.L.P.
3100 Nationsbank Plaza
901 Main Street
Dallas, TX 75202-3789
Main Tel: 214-651-5000
Contact:
Michael Boone
George Bramblett
Noel Hensley
Locke Purnell Rain Harrell
2200 Ross Avenue
Suite 2200
Dallas, TX 75201-6776
Contact:
John McElhaney 214-740-8458
Peter Flynn 214-740-8654
Morris Harrell 214-740-8404
Thompson & Knight, P.C.
1700 Pacific
Suite 3300
Dallas, TX 75201-4693
Contact:
Timothy R. McCormick 214-969-1103
Vinson & Elkins
2500 First City Tower
1001 Fannin
Houston, TX 77002-6760
Contact:
David T. Hedges, Jr. 713-758-2676
Vinson & Elkins
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, TX 75201-2975
Contact:
Orrin L. Harrison
<PAGE>
APPENDIX B
I. DEFINITIONS
(a) "Crisis" means:
(1) a Delisting Crisis; and
(2) one of the following events which, in the good faith opinion of the
Chief Financial Officer of an Organization did cause or is reasonably
likely to cause a "Material Effect on an Organization's Common Stock
Price":
(i) Negative earning or sales announcement
The public announcement of an Organization's past or future
earnings or sales, which is substantially less favorable than any
of the following: (i) an Organization's prior year's earnings or
sales for the same period; (ii) an Organization's prior public
statements or projections regarding earnings or sales for such
period; or (iii) an outside securities analyst's published
estimate of an Organization's earnings or sales.
(ii) Loss of a patent, trademark or copyright or major customer or
contract
The public announcement of an unforeseen loss of: (i) an
Organization's intellectual property rights for a patent,
trademark or copyright, other than by expiration; (ii) a major
customer or client of an Organization; or (iii) a major contract
with an Organization.
(iii)Product recall or delay
The public announcement of the recall of a major product of an
Organization or the unforeseen delay in the production of a major
product of an Organization.
(iv) Mass tort
The public announcement or accusation that an Organization has
caused the bodily injury, sickness, disease, death or emotional
distress of a group of persons, or damage to or destruction of
any tangible group of properties, including the loss of use
thereof.
(v) Employee layoffs or loss of key executive officer(s)
The public announcement of layoffs of Employees of an
Organization. The death or resignation of one or more key
Executives of the Named Entity.
(vi) Elimination or suspension of dividend
The public announcement of the elimination or suspension of a
regularly scheduled dividend previously being paid by an
Organization.
1
<PAGE>
(vii)Write-off of assets
The public announcement that an Organization intends to write off
a material amount of its assets.
(viii)Debt restructuring or default
The public announcement that an Organization has defaulted or
intends to default on its debt or intends to engage in a debt
restructuring.
(ix) Bankruptcy
The public announcement that an Organization intends to file for
bankruptcy protection or that a third party is seeking to file
for involuntary bankruptcy on behalf of an Organization; or that
bankruptcy proceedings are imminent, whether voluntary or
involuntary.
(x) Governmental or regulatory litigation
The public announcement of the commencement or threat of
commencement of litigation or governmental or regulatory
proceedings against an Organization.
(xi) Unsolicited takeover bid
An unsolicited written offer or bid by any person or entity other
than an Insured or any affiliate of any Insured, whether publicly
announced or privately made to an Executive of an Organization,
to effect a Transaction (as defined in Clause 12(a) of the
policy) of the Named Entity.
A Crisis shall first commence when an Organization or any of its
Executives shall first become aware of such Crisis. A Crisis shall
conclude once a Crisis Firm advises an Organization that such Crisis
no longer exists or when the CrisisFund(SM) has been exhausted.
(b) "Crisis Firm" means any public relations firm, crisis management firm
or law firm as listed in section II of this Appendix B. Any "Crisis
Firm" may be hired by an Organization to perform Crisis Services
without further approval by the Insurer.
(c) "Crisis Loss" means the following amounts incurred during the pendency
of a Crisis for which an Organization is legally liable:
(1) the reasonable and necessary fees and expenses incurred by a
Crisis Firm in the performance of Crisis Services for an
Organization;
(2) the reasonable and necessary fees and expenses incurred in the
printing, advertising or mailing of materials; and
(3) travel costs incurred by Executives, employees or agents of an
Organization or of the Crisis Firm, arising from or in connection
with the Crisis.
2
<PAGE>
(d) "Crisis Services" means those services performed by a Crisis Firm in
advising an Insured or any Employee of an Organization on minimizing
potential harm to an Organization from the Crisis (including but not
limited to maintaining and restoring investor confidence in an
Organization), and solely with respect to Delisting Crisis Loss, any
legal services performed by a Crisis Firm in responding to a Delisting
Crisis.
(e) "Delisting Crisis" means written notice to an Organization that such
Organization will be or has been delisted from an Exchange.
(f) "Exchange" means NASDAQ, the American Stock Exchange, the New York
Stock Exchange and the Singapore Exchange.
(g) "Material Effect on an Organization's Common Stock Price" means,
within a period of 24 hours, that the price per share of an
Organization's common stock shall decrease by the greater of $2.00, or
15% net of the percentage change in the Standard & Poor's Composite
Index.
II. EXCLUSIONS
The term Crisis shall not include any event relating to:
(i) any Claim which has been reported, or any circumstances of which
notice has been given, under any policy of which this policy is a
renewal or replacement or which it may succeed in time;
(ii) the actual, alleged or threatened discharge, dispersal, release
or escape of Pollutants; or any direction or request to test for,
monitor, clean up, remove, contain, treat, detoxify or neutralize
Pollutants; provided, however, the foregoing shall not apply the
policy contains any endorsement modifying or deleting, in part or
in whole, exclusion (k) of the policy; or
(iii)the hazardous properties of nuclear materials; provided,
however, the foregoing shall not apply to any Crisis arising from
the ownership of, operation of, construction of, management of,
planning of, maintenance of or investment in any nuclear
facility.
3
<PAGE>
III. PRE-APPROVED CRISIS FIRMS
(a) For all Crises (including a Delisting Crisis), Crisis Firm(s) means
any public relations firm listed in (1)-(7) below:
(1) ABERNATHY MACGREGOR (5) ROBINSON LERER & MONTGOMERY
SCANLON 75 Rockefeller Plaza, 6th floor
501 Madison Avenue New York, NY 10019
New York, NY 10022 (212 )484-7721
(212 )371-5999 Contact: Michael Gross
Contact: James T. MacGregor
(2) BURSON-MARSTELLER (6) SARD VERBINNEN & CO.
230 Park Avenue South 630 Third Avenue
New York, NY 10003-1566 New York, NY 10017
(212 )614-5236 (212) 687-8080
Contact: Michael Claes Contact: Paul Verbinnen or
George Sard
(3) PATTON BOGGS, LLP (7) SITRICK & COMPANY
2550 M Street, N.W. 2029 Century Park East
Washington, D.C., 20037 Suite 1750
(202 )457-6000 Los Angeles, CA 90067
Contact: Thomas H. Boggs (310) 788-2850
Contact: Michael Sitrick
(4) KEKST AND COMPANY
437 Madison Avenue
New York, NY 10022
(212 )593-2655
Contact: Andrew Baer
(b) Solely for Delisting Crises, "Crisis Firm(s)" shall also include any
Panel Counsel Firm (as defined in Clause 9) approved to handle
Securities Claims.
4
<PAGE>
ENDORSEMENT# 1
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
NUCLEAR ENERGY LIABILITY EXCLUSIONS ENDORSEMENT
WITH SHAREHOLDER CARVE-OUT
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 any Insured:
A. alleging, arising out of, based upon, attributable to, or in any way
involving, directly or indirectly, the Hazardous Properties of Nuclear
Material, including but not limited to:
(1) Nuclear Material located at any Nuclear Facility owned by, or operated
by or on behalf of, the Organization, or discharged or dispersed
therefrom; or
(2) Nuclear Material contained in spent fuel or waste which was or is at
any time possessed, handled, used, processed, stored, transported or
disposed of by or on behalf of the Organization; or
(3) the furnishing by an Insured or the Organization of services,
materials, parts or equipment in connection with the planning,
construction, maintenance, operation or use of any Nuclear Facility;
or
(4) Claims for damage or other injury to the Organization or its
shareholders which allege, arise from, are based upon, are attributed
to or in any way involve, directly or indirectly, the Hazardous
Properties of Nuclear Material.
B. (1) which is 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 insured under any such policy but for its termination or
exhaustion of its limit of liability; or,
(2) with respect to which: (a) any person or organization is required to
maintain financial protection pursuant to the Atomic Energy Act of
1954, or any law amendatory thereof, or (b) the Insured is, or had
this policy not been issued would be, entitled to indemnity from the
United States of America, or any agency thereof, under any agreement
entered into by the United States of America, or any agency thereof,
with any person or organization.
As used in this endorsement:
"Hazardous Properties" include radioactive, toxic or explosive properties.
<PAGE>
ENDORSEMENT #1 (Continued)
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
"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 wastes;
(c) any equipment or device used for the processing, fabricating or
alloying of special nuclear material if at any time the total amount
of such material in the custody of the Insured at the premises where
such equipment or device is located consists of or contains more than
25 grams of plutonium or uranium 233 or any combination thereof, or
more than 250 grams of uranium 235; and
(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 Material" means source material, special nuclear material or byproduct
material.
"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.
"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 by product 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.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
/s/ Paul L. Schiavone
----------------------------------
AUTHORIZED REPRESENTATIVE
<PAGE>
ENDORSEMENT #2
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
CAPTIVE INSURANCE COMPANY EXCLUSION
In consideration of the premium charged, it is hereby understood and agreed that
the Insurer shall not be liable to make any payments for Loss in connection with
any Claim made against any Insured alleging, arising out of, based upon,
attributable to the ownership, management, maintenance, operation and/or control
by the Organization of any captive insurance company or entity including but not
limited to any Claim alleging the insolvency or bankruptcy of an Organization as
a result of such ownership, operation, management and control.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED
/s/ Paul L. Schiavone
----------------------------------
AUTHORIZED REPRESENTATIVE
<PAGE>
ENDORSEMENT #3
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
PENNSYLVANIA AMENDATORY ENDORSEMENT
Wherever used in this endorsement:
"we", "us", "our", and "Insurer" mean the insurance company which issued this
policy, "you", "your", "named Insured", "First Named insured", and "Insured"
mean the Named Corporation, Named Organization, Named Sponsor, Named Insured, or
Insured stated in the Declarations Page; and "Other Insured(s)" means all other
persons or entities afforded coverage under the policy.
CANCELLATION/NONRENEWAL
-----------------------
The cancellation provision of this policy is amended as follows:
Cancelling a policy midterm is prohibited except if:
1) A condition material to insurability has changed substantially;
2) Decrease or loss of reinsurance has occurred;
3) Material misrepresentation by the Insured or Other Insured(s);
4) Policy was obtained through fraud;
5) The Insured has failed to pay a premium when due;
6) The Insured has requested cancellation;
7) Material failure to comply with terms;
8) Other reasons that the commissioner may approve.
NOTICE REQUIREMENTS FOR MIDTERM CANCELLATION AND NONRENEWAL
-----------------------------------------------------------
Notice shall be mailed by registered or first class mail by the Insurer directly
to the named Insured. Written notice will be forwarded directly to the named
Insured at least sixty (60) days in advance of the termination date unless one
or more of the following exists:
1) The Insured have made a material misrepresentation which affects the
insurability of the risk, in which case the prescribed written notice
of cancellation shall be forwarded directly to the named Insured at
least fifteen (15) days in advance of the effective date of
termination.
<PAGE>
ENDORSEMENT # 3 (Continued)
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union fire Insurance Company of Pittsburgh, Pa.
2) The Insured has failed to pay a premium when due, whether the premium
is payable directly to the Insurer or its agents or indirectly under a
premium finance plan or extension of credit, in which case the
prescribed written notice of cancellation shall be forwarded directly
to the Named Insured at least fifteen (15) days in advance of the
effective date of termination.
3) The policy was cancelled by the named Insured, in which case written
notice of cancellation shall not be required and coverage shall be
terminated on the date requested by the Insured. Nothing in these
three sections shall restrict the Insurer's right to rescind an
insurance policy ab initio upon discovery that the policy was obtained
through fraudulent statements, omissions or concealment of fact
material to the acceptance of the risk or to the hazard assumed by the
Insurer.
The notice shall be clearly labeled "Notice of Cancellation" or "Notice of
Nonrenewal". A midterm cancellation or nonrenewal notice shall state the
specific reasons for the cancellation or nonrenewal. The reasons shall identity
the condition or loss experience which caused the midterm cancellation or
nonrenewal. The notice shall provide sufficient information or data for the
Insured to correct the deficiency.
A midterm cancellation or nonrenewal notice shall state that, at the Insured's
request, the Insurer shall provide loss information to the Insured for at least
three years or the period of time during which the Insurer has provided coverage
to the Insured, whichever is less. Loss information on the Insured shall consist
of the following:
1) Information on closed claims, including date and description or
occurrence, and any amount of payments, if any;
2) Information on open claims, including date and description of
occurrence, amount of payment, if any, and amount of reserves, if
any;
3) The Insured's written request for loss information must be made within
ten (10) days of the Insured's receipt of the midterm cancellation or
nonrenewal notice. The Insurer shall have thirty (30) days from the
date of receipt of the Insured's written request to provide the
requested information;
<PAGE>
ENDORSEMENT # 3 (Continued)
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
NOTICE OF INCREASE IN PREMIUM
-----------------------------
The Insurer shall provide not less than sixty (60) days notice of intent to
increase the Insured's renewal premium with thirty (30) days notice of an
estimate of the renewal premium. The notice of renewal premium increase will be
mailed or delivered to the Insured's last known address. If notice is mailed, it
will be by registered or first-class mail.
RETURN OF UNEARNED PREMIUM
--------------------------
Cancellation Initiated by Insurer - Unearned premium must be returned to the
Insured not later than ten (10) business days after the effective date of
termination.
Cancellation Initiated by Insured - Unearned premium must be returned to the
Insured not later than thirty (30) days after the effective date of termination.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED,
/s/ Paul L. Schiavone
----------------------------------
AUTHORIZED REPRESENTATIVE
<PAGE>
ENDORSEMENT # 4
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
ARCHITECT OR ENGINEER E&O EXCLUSION
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(s) made against any Insured(s) alleging, arising out of, based upon or
attributable to the performance of or failure to perform services as an
architect or engineer, or any act, error or omission related thereto.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
/s/ Paul L. Schiavone
----------------------------------
AUTHORIZED REPRESENTATIVE
<PAGE>
ENDORSEMENT # 5
This endorsement, effective 12:01 am May 5, 2000 forms a part of
policy number 280-69-48
issued to STV GROUP, INCORPORATED
by National Union Fire Insurance Company of Pittsburgh, Pa.
P&P Dates for Excess Limits
In consideration of the premium charged, it is hereby understood and agreed that
Clause 4, EXCLUSION (e) of the form 70320is deleted in its entirety and replaced
by the following:
(e) alleging, arising out of, based upon or attributable to any pending or
prior litigation as of May 05, 1992 or alleging or derived from the
same or essentially the same facts as alleged in such pending or prior
litigation.
It is further understood and agreed that with respect to the Limit of Liability
$1,000,000 excess of $3,000,000, exclusion 4(e) is amended to indicate that the
Insurer shall not be liable to make any payment for Loss in connection with any
claim or claims made against the Directors and Officers alleging, arising out
of, based upon or attributable to any pending or prior litigation as of August
19, 1992 or alleging or derived from the same or essentially the same facts as
alleged in such pending or prior litigation.
It is further understood and agreed that with respect to the Limit of Liability
$2,000,000 excess of $4,000.000; exclusion 4(e) is amended to indicate that the
Insurer shall not be liable to make any payment for Loss in connection with any
claim or claims made against the Directors and Officers alleging, arising out
of, based upon or attributable to any pending or prior litigation as of May 05,
1994 or alleging or derived from the same or essentially the same facts as
alleged in such pending or prior litigation
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED
/s/ Paul L. Schiavone
----------------------------------
AUTHORIZED REPRESENTATIVE
