elite Residents Association Individual Liability Insurance Policy

Transcription

1 elite Residents Association Individual Liability Insurance Policy Elite RAIL_1 ix.05

2 Elite RAIL_1 ix.05

3 INDEX Contents Page 1. Insuring Agreement 1 2. Definitions Exclusions Conditions 4.1 Limit of Liability Retention Claims and Investigations Advancement of Defence Costs and Allocation of Loss Takeovers and Mergers Other Insurance Subrogation Authorisation Non-assignment Policy Interpretation Contracts (Rights of Third Parties) Act Discovery Period Proposal form disclosure and severability Extensions 7.1 Subsidiaries Directors and Officers Retired Director or Officer Cover Takeovers and Mergers Run-off Outside Directorship Extension Corporate Manslaughter Extension Management Buy-outs National Insurance Contributions 13 Complaints Procedure 14 Elite RAIL_1 ix.05

4 Elite RAIL_1 ix.05

5 ACE European Group Ltd. ACE Building 100 Leadenhall Street, London, EC3A 3BP tel fax ACE European Group Limited is authorised and regulated by the Financial Services Authority elite Residents Association Individual Liability Insurance Policy CLAIMS MADE POLICY In consideration of the payment of the premium shown at Item 9 of the Schedule and in reliance upon the Proposal and subject to all terms, conditions and limitations of this policy the Insurer agrees with the Insured and with the Company as follows: 1. Insuring Agreement A. The Insurer will pay on behalf of the Insured all Loss resulting from a Claim first made during the Policy Period or Discovery Period (if applicable) against an Insured for a Wrongful Act or an Employment Related Wrongful Act, except for and to the extent that the Company has indemnified the Insured. B. The Insurer will pay on behalf of the Company all Loss resulting from a Claim first made during the Policy Period or Discovery Period (if applicable) against an Insured for a Wrongful Act or an Employment Related Wrongful Act, that the Company is legally required or permitted to pay the Insured as advancement or indemnity under applicable company indemnity laws or agreements. C. The Insurer will pay on behalf of the Insured all Legal Representation Expenses in respect of an Investigation. D. The Insurer will pay on behalf of the Company all Legal Representation Expenses in respect of an Investigation where the Company is legally required or permitted to pay the Insured as advancement or indemnity under applicable company indemnity laws or agreements. E. The Insurer will pay on behalf of the Company all reasonable costs and expenses of replacing or restoring Documents which are lost, damaged or destroyed during the Policy Period, up to a maximum liability for the Policy Period of 25,000. SIGNED for and on behalf of the Insurer Andrew Kendrick Chairman and Chief Executive Officer A 24-hour help-line is available to any Director or Officer of the Company requiring legal advice in respect of his or her role as a Director or Officer of the Company in connection with the insurance provided by this policy. This service is restricted to matters governed by the laws of England and Wales and Scotland. The telephone number is or in Scotland , and it will be necessary to quote the policy number. Elite RAIL_1 1 ix.05

6 2. Definitions 2.1 Claim means (i) (ii) (iii) (iv) any Written Demand made against an Insured based upon a specified Wrongful Act seeking damages or such other relief as could be sought in legal proceedings; or any civil or arbitral proceeding against an Insured; or any criminal prosecution against an Insured; or any formal administrative or regulatory proceeding commenced against an Insured based upon a specified Wrongful Act; first made during the Policy Period. 2.2 Company means the company, partnership or unincorporated association shown in Item 1 of the Schedule and any Subsidiary. 2.3 Corporate Manslaughter means the prosecution of a Director, Officer or Employee for involuntary manslaughter including constructive manslaughter or gross negligence manslaughter, in relation to the business of the Company. 2.4 Defence Costs means reasonable legal fees, costs and expenses incurred by an Insured (including the cost of an appeal bond but without the obligation to apply for and furnish any such bond) with the written consent of the Insurer, not to be unreasonably withheld, that are necessary to defend or appeal a Claim. 2.5 Director or Officer means any natural person who was, now is, or shall become: (i) a director or officer of the Company including the equivalent position in any other jurisdiction; (ii) a de facto director; and (iii) a duly appointed trustee, governor, governing committee or governing body member, or volunteer working for the Company (whether or not such person is remunerated). 2.6 Discovery Period means the period of 12 months immediately after expiry of the Policy Period during which (subject to the provisions of Clause 5) the Insured may notify Claims in writing in respect of Wrongful Acts occurring prior to expiry of the Policy Period. 2.7 Documents means documents (other than bearer bonds, coupons, shares, bank notes, stamps and other negotiable instruments) whether in physical or electronic format belonging to the Company. 2.8 Employee means a natural person who was, now is or shall become: (i) an employee of the Company for a Wrongful Act committed or alleged to have been committed in a managerial or supervisory capacity; and (ii) an employee of the Company for an Employment Related Wrongful Act. 2.9 Employment Related Wrongful Act means any actual or alleged: (i) wrongful or unfair or constructive dismissal; (ii) discharge or termination of employment; (iii) breach of oral or written or implied contract; (iv) employment-related misrepresentation; (v) discrimination; (vi) harassment; (vii) wrongful failure to employ or promote; (viii) wrongful deprivation of career opportunities; (ix) wrongful discipline; (x) failure to grant tenure or negligent evaluation; Elite RAIL_1 2 ix.05

7 (xi) (xii) (xiii) failure to provide accurate references; invasion of privacy; Retaliation; (xiv) breach of duty whether arising under statutory law or common law or otherwise committed by or on behalf of the Insured in connection with the employment by the Company of any current, former or prospective Employee Insured means a natural person who was, now is or shall become: (i) a Director or Officer; (ii) a Shadow Director of any company as a consequence of being a Director, Officer or Employee of the Company; (iii) an Employee; (iv) an Employee of the Company, not otherwise included as an Insured, in respect of Claims in which such employee is named as a co-defendant with any Director or Officer; (v) any lawful spouse of a Director or Officer, but only where the Claim results from the Wrongful Act of such Director or Officer; (vi) the estate, heir or legal representative of a deceased person who was a Director or Officer of the Company at the time of the Wrongful Act upon which the Claim is based; (vii) the legal representative of a Director or Officer in the event of the incapacity, insolvency or bankruptcy of such Director or Officer; provided that Insured does not include an external auditor Insurer means ACE EUROPEAN GROUP LTD Investigation means an official investigation, official examination or official enquiry in relation to the business or activities of the Company at which the attendance of an Insured is first required during the Policy Period Legal Representation Expenses means the reasonable legal costs for which an Insured is legally liable and which are incurred with the consent of the Insurer (but not including wages, salaries or other remuneration of any Director or Officer or Employee of the Company) for legal representation in relation to an Investigation up to the limit shown in Item 11 of the Schedule (such limit shall be part of and not in addition to the Limit of Liability shown in Item 3 of the Schedule); provided that such costs are not available from any other source of insurance or indemnification other than as advancement or indemnity under applicable company indemnity laws or agreements Loss (i) means any damages, judgments and settlements for which an Insured is legally liable in respect of a Claim; (ii) includes Defence Costs; (iii) includes Legal Representation Expenses; (iv) includes aggravated damages and punitive and exemplary damages where insurable by law, except in relation to Employment Related Wrongful Acts (provided that this exception shall not extend to a Claim for defamation, even if such Claim involves an Employment Related Wrongful Act); (v) excludes fines or penalties imposed by law, or any matter deemed uninsurable under the law; (vi) excludes taxes or sums payable in relation to taxes; (vii) excludes the multiplied portion of any damages award Outside Entity means a registered charity or a trade association or other non-profit organisation in the United Kingdom or the equivalent in any other jurisdiction Policy Period means the period of time shown in Item 2 of the Schedule of this policy. Elite RAIL_1 3 ix.05

8 2.17 Pollutant means any contaminant, irritant or other matter or substance including but not limited to oil, smoke, vapour, soot, asbestos, asbestos-containing materials, fumes, acids, alkalis, nuclear or radioactive material, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed Pollution means the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of any Pollutant whether in a solid, liquid, gas, odour, noise, vibration, electromagnetic radiation, ionising radiation, thermal or other form at any time Proposal means the proposal form submitted by the Company and/or any Insured in applying for this policy and all information and documentation accompanying it and also such proposal forms and accompanying information and documentation concerning any previous policy issued by the Insurer of which the policy is a replacement, renewal or continuation Retaliation means a Wrongful Act by an Insured relating to or alleged to be in response to any of the following activities: (i) the disclosure or threat of disclosure by an Employee to a superior or to any governmental agency or authority of any act by an Insured which act is alleged to be a violation of the law, common or statutory, of any state, territory, jurisdiction or political subdivision thereof; (ii) the actual or attempted exercise by an Employee of any right that such Employee has under law, including rights under any law relating to employee rights; (iii) any employee strike, work to rule or other similar action Retired Director or Officer means a Director or Officer who has ceased to hold such office prior to expiry of the Policy Period for any reason other than disqualification from holding office as a company director Schedule means the schedule to this policy Securities means: (i) shares and stock in the share capital of the Company; (ii) any instrument creating or acknowledging indebtedness issued by the Company including debentures, debenture stock, loan stock and bonds Shadow Director means any Director or Officer whilst acting in a capacity of a shadow director as defined: (i) under Section 741(2) of the Companies Act 1985 (as amended) of any company that is incorporated or domiciled in the United Kingdom; or (ii) under equivalent legislation in any other jurisdiction Subsidiary means a company that the Company shown in Item 1 of the Schedule directly or indirectly: (i) controls through holding a majority of the voting rights; or (ii) controls through the right to appoint or remove a majority of its board of Directors; or (iii) controls alone, pursuant to a written agreement with other shareholders, a majority of the voting rights therein; or (iv) holds more than half of the issued share capital. Elite RAIL_1 4 ix.05

9 2.26 Transaction means any one of the following events: (i) (ii) the Company shown in Item 1 of the Schedule merges with or consolidates into any other entity; or the Company shown in Item 1 of the Schedule sells all or more than 90% of its assets to any person or entity or persons or entities acting in concert; or (iii) any person or entity or persons or entities acting in concert acquire more than 50% of the issued share capital of the Company shown in Item 1 of the Schedule; or (iv) any person or entity or persons or entities acting in concert acquire control of the appointment of the majority of Directors of the Company shown in Item 1 of the Schedule Written Demand means a written demand which, in the case of a Claim by the Company or an Insured shall be filed in a court of law Wrongful Act means any: (i) actual or alleged, breach of trust, error, omission, misstatement, misleading statement, neglect or breach of duty by an Insured whilst acting in the capacity of Director, Officer or Employee of the Company or of an Outside Entity; or (ii) actual or alleged Employment Related Wrongful Act claimed against an Insured in his or her capacity as such; or (iii) matter claimed against a Director or Officer solely by reason of his or her status as a Director or Officer of the Company, occurring on or after the retroactive date shown in Item 5 of the Schedule. Elite RAIL_1 5 ix.05

10 3. Exclusions The Insurer shall not be liable to make any payment for Loss in connection with any Claim or Investigation: 3.1 based on, arising from or attributable to: (i) any dishonest or fraudulent act or omission of an Insured or an intentional breach of the law; or (ii) any personal profit or advantage gained by an Insured to which such Insured was not legally entitled; (iii) profits made from the sale or purchase by the Insured of Securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act 1934 and any amendment thereto or any similar provisions in any other territory; provided that: (a) this exclusion shall only apply if it is established through a judgment or any other adjudication or any admission by such Insured that the relevant conduct occurred; and (b) for the purposes of this exclusion the Wrongful Act of an Insured shall not be imputed to any other Insured; and (c) exclusion 3.1 (i) above shall not apply to Defence Costs or Legal Representation Expenses relating to any Claim or criminal investigation for Corporate Manslaughter (or equivalent in any jurisdiction); 3.2 based on, arising from or attributable to any pending or prior litigation or other proceedings (including but not limited to civil, criminal, regulatory and administrative proceedings or official investigations) involving the Company, an Outside Entity or an Insured and issued or otherwise begun before the date shown at Item 6 of the Schedule or alleging or derived from the same or substantially the same facts or circumstances alleged in the pending or prior litigation or proceedings; 3.3 based on, arising from or attributable to any fact, circumstance, act, omission, Claim, Wrongful Act or other matter of which notice has been given under any policy existing or expired before or on the inception date of this policy; 3.4 brought or maintained by or on behalf of any Insured or the Company, except: (i) a Claim (a) by an Insured; or (b) by the Company if, prior to making a Claim, a written opinion has been obtained by the Company from a lawyer approved by the Insurer, advising that the Company on the balance of probabilities will obtain a judgment against the Insured in respect of such Claim; (ii) a Claim alleging an Employment Related Wrongful Act; (iii) any shareholder derivative action brought or maintained on behalf of the Company without the solicitation or participation of an Insured or the Company; (iv) any Claim for contribution or indemnity if such Claim directly results from another Claim otherwise covered under this policy; (v) any Claim brought or maintained by a liquidator, receiver or administrative receiver, or similar person under the laws of any other jurisdiction; (vi) Defence Costs; (vii) any Claim made by a past Director, Officer or Employee of the Company; 3.5 in a capacity as a trustee of any pension, profit sharing, health, welfare or any other employee benefit programme established by the Company or for any actual or alleged breach of an Insured s responsibilities or obligations as imposed in the United Kingdom by the Pensions Act 1995 as from time to time amended, or any similar laws, common or statutory, including the equivalent laws in any other jurisdiction; Elite RAIL_1 6 ix.05

11 3.6 based on, arising from or attributable to the actual or intended private placement or public offering of any Securities during the Policy Period; provided that this Exclusion shall not apply where the total value of such placement or offering is equal to or lower than the sum shown at Item 8 of the Schedule; 3.7 (i) for bodily injury, mental illness, emotional distress, injury to feelings, sickness, disease or death of any person; or (ii) for damage to or destruction of any tangible property including loss of use of such property; provided that: (a) neither Exclusion 3.7 (i) nor 3.7 (ii) shall apply in respect of emotional distress and/or injury to feelings resulting from an Employment Related Wrongful Act; and (b) Exclusion 3.7 (i) shall not apply to Defence Costs or Legal Representation Expenses relating to any Claim or criminal investigation for Corporate Manslaughter (or equivalent in any other jurisdiction); (c) Exclusion 3.7 (ii) shall not apply to any Claim arising under Insuring clause 1. E. 3.8 based on, arising from, attributable to, in consequence of or in any way involving directly or indirectly Pollution; provided that this exclusion shall not apply to: (i) Defence Costs for a Claim based on or arising from or attributable to Pollution up to the sub-limit shown at Item 12 of the Schedule which shall apply in the aggregate for the Policy Period (such limit shall be part of and not in addition to the Limit of Liability shown in Item 3 of the Schedule); (ii) any Claim against an Insured instigated by a shareholder or group of shareholders of the Company directly or in the name of the Company without the solicitation, voluntary assistance or participation of any Insured; 3.9 brought against an Insured by an Outside Entity or by any Director, Officer, trustee, governor or equivalent in any such Outside Entity or any shareholder of the Outside Entity holding more than 20% of the issued and outstanding voting share capital of the Outside Entity provided however that these restrictions of cover shall not apply to: (i) a Claim alleging an Employment Related Wrongful Act; or (ii) any shareholder derivative action brought or maintained on behalf of the Outside Entity without the solicitation or participation of any Insured or any Director, Officer, trustee, governor or equivalent of the Outside Entity; (iii) a Claim for contribution or indemnity, if the Claim directly results from another Claim otherwise covered under this policy; (iv) any Claim brought or maintained by a liquidator, receiver or administrative receiver derivatively on behalf of the Outside Entity without the solicitation or participation of any Insured or any Director, Officer, trustee or governor or equivalent of the Outside Entity; (v) Defence Costs; 3.10 against a Shadow Director whether made in the name of or on behalf of : (i) any Shadow Directorship Company, or any person who is now or shall be a Director or Officer of the Shadow Directorship Company; and/or (ii) any parent, holding, controlling, subsidiary, affiliate or associated company or representative of the Shadow Directorship Company. For the purposes of this exclusion Shadow Directorship Company means any company in respect of which any Insured is a Shadow Director brought or maintained, in whole or in part, in the United States of America or based on, arising from, attributable to activities of the Company in the United States of America. Elite RAIL_1 7 ix.05

12 4. Conditions 4.1 Limit of Liability (i) The amount shown in Item 3 of the Schedule is the Insurer s maximum aggregate liability for all Loss under this policy irrespective of the number of Claims or Investigations under this policy or the number of Insureds who claim and irrespective of the amounts of any such Claims or Investigations or when they are made. (ii) The Insurer s maximum aggregate liability for all Loss in respect of which a sublimit is specified in the Schedule or any endorsement shall be that specified sublimit (such limit shall be part of and not in addition to the Limit of Liability shown in Item 3 of the Schedule), irrespective of the number of Claims under this policy for such Loss or the number of Insureds who may so claim and irrespective of the amounts of any such Claims or when they are made. (iii) Two or more Claims arising out of a single Wrongful Act or a series of related Wrongful Acts shall be treated as a single Claim. All such Claims shall be treated as though first made when the earliest such Claim was first made. In the event of an Investigation in respect of which Legal Representation Expenses have been incurred, such Investigation shall be treated as though first made at the time the attendance of an Insured at such Investigation was first required. 4.2 Retention (i) The retention shown in Item 4 of the Schedule shall apply to any Loss for a Claim for which advancement or indemnification by the Company is required or permissible under company indemnification laws or agreements or otherwise regardless of whether or not the Company actually advances or indemnifies the Insured for such Loss. The retention shall be paid by the Company. (ii) The Insurer shall have no obligation to pay any Loss for a Claim within the amount of such retention if applicable; provided that if the Company is unable to pay the amount of the retention due to insolvency then subject to all other terms and conditions of this policy the Insurer shall pay such Loss and be subrogated to the Insured s rights of indemnity. 4.3 Claims and Investigations (i) It is a condition precedent to the Insurer s liability to pay Loss under this policy in respect of a Claim or Investigation that the Company or the Insured gives written notice to the Insurer of such Claim or Investigation as soon as practicable. In event of expiry of the Policy Period, notification must be given in any event no later than 45 days after the expiration of the Policy Period, or, in relation to a Claim first made against the Insured during the Discovery Period if applicable no later than expiry of the Discovery Period. (ii) The Company and the Insured shall give the Insurer such information and cooperation as it may reasonably require. Notice and all information shall be sent in writing to the Insurer at 100 Leadenhall Street, London EC3A 3BP. (iii) Neither the Company nor the Insured shall do anything to prejudice any of the Insurer s rights nor shall they admit liability for or settle any Claim or incur Defence Costs or Legal Representation Expenses without the Insurer s prior written consent, which consent shall not be unreasonably withheld. The Insurer shall at all times have the right, but not the duty, to effectively associate in the defence or settlement of any Claim or the incurring of Legal Representation Expenses to which this policy may apply and to be given the opportunity to consult with the Insured in relation to proposed action that the Insured may wish to take in relation to such Claim or Legal Representation Expenses. Elite RAIL_1 8 ix.05

13 (iv) If there is a dispute between the Insurer and the Insured and/or the Company (as appropriate) about whether to agree to a proposed settlement or about whether a Claim should continue to be defended (taking into account whether the Claim is likely on the balance of probabilities to be defended and such possibilities as may exist for settling the Claim), the Insurer may obtain an opinion from a Queen s Counsel or equivalent in a different jurisdiction to decide the issue. That decision shall be binding upon the Insurer and the Insured and/or the Company (as appropriate), who shall act accordingly in relation to the proposed settlement or in continuing or not continuing to defend the action as the case may be. (v) If during the Policy Period or Discovery Period if applicable the Company or any Insured shall become aware of any circumstances that might give rise to a Claim and during such period gives notice of the same to the Insurer, then any Claim later made against any Insured shall for the purposes of this policy be treated as a Claim made during the Policy Period or Discovery Period if applicable. A notice of such a circumstance must describe as precisely as possible all facts and details including the reasons for anticipating a Claim with full particulars as to dates and persons involved and an estimate of quantum. (vi) If during the Policy Period the Company or any Insured shall become aware of any circumstances that might give rise to an Investigation and during such period gives notice of the same to the Insurer, then any Investigation later commenced against any Insured shall for the purposes of this policy be treated as an Investigation during the Policy Period. A notice of such a circumstance must describe as precisely as possible all facts and details including the reasons for anticipating an Investigation. 4.4 Advancement of Defence Costs and Allocation of Loss (i) The Insurer shall advance Defence Costs on an ongoing basis prior to the final payment or settlement of any Claim and shall advance Legal Representation Expenses; provided that: (a) such Defence Costs or Legal Representation Expenses are incurred with the written consent of the Insurer; and (b) such advance payments by the Insurer shall be repaid to the Insurer in the event that the Insured is not entitled to payment of such Loss or part of such Loss under the policy (the Limit of Liability shown in Item 3 of the Schedule shall be reduced by such amount until repaid to the Insurer). (ii) The Insurer shall advance Defence Costs which the Company fails to advance or indemnify where such failure is due solely to the insolvency of the Company. (iii) In the event of: (a) a Claim against an Insured which is not wholly covered by this policy; and/or (b) a Claim against an Insured being also made against the Company and/or one or more persons who are not Insureds; the Insurer and the Insured (and/or the Company if applicable) shall then use their best endeavours to determine a reasonable allocation of Loss that is covered under this policy and loss comprising damages, settlement, Defence Costs or other costs that is not covered. (iv) In the event of a dispute as to allocation under sub-paragraph (iii) above, the Insurer at its option or if requested by the Insured (or the Company if applicable) shall submit the dispute to binding arbitration before a panel consisting of one arbitrator selected by the Insured (or the Company if applicable), one arbitrator selected by the Insurer, and a third independent arbitrator selected by the first two. Such arbitration shall be conducted under the Rules of the London Court of International Arbitration, the Rules of which are hereby deemed incorporated. Elite RAIL_1 9 ix.05

14 4.5 Takeovers and Mergers If during the Policy Period a Transaction takes place then: (i) (ii) 4.6 Other Insurance the Company shown in Item 1 of the Schedule shall give written notice of the same to the Insurer within 30 days of the effective date of such Transaction; and the cover provided under this policy shall apply only to Wrongful Acts committed prior to the effective date of such Transaction. If an Insured or the Company is or would (but for the existence of this policy) be entitled to cover under any other policy (save for insurance specifically arranged to apply in excess of this policy) in respect of any Claim, the Insurer shall not be liable for Loss other than in excess of any amount that is or would (but for the existence of this policy) have been payable under any other such policy. 4.7 Subrogation In the event the Insurer makes any payment under this policy, the Insurer shall be subrogated to all of the Company s and any Insured s rights of recovery, and the Company and the Insured shall co-operate with the Insurer in securing such rights. Neither the Company nor any Insured shall do anything to prejudice the Insurer s ability to assert such rights. The Insurer shall not exercise any rights of subrogation against an Insured unless it is established that such Insured has committed a deliberate criminal act or obtained any profit or advantage to which such Insured was not legally entitled. 4.8 Authorisation The Company shown in Item 1 of the Schedule hereby agrees to act on behalf of all Insureds with respect to the giving and receiving of notice of a Claim, the payment of premiums and the receiving of any return premium that may become due under this policy, the negotiation, agreement to and acceptance of endorsements, and the giving or receiving of any notice provided for in this policy (except that the Insured shall be entitled to elect a Discovery Period) and each Insured agrees that the Company shall so act on his or her behalf. 4.9 Non-assignment No change in, modification of, or assignment of interest under this policy shall be effective unless made by written endorsement to this policy duly executed on behalf of the Insurer Policy Interpretation This policy shall be governed by English law. The Insurer, the Insured and the Company agree to submit to the exclusive jurisdiction of the English courts in relation to all disputes arising out of, relating to or connected with this policy and/or its negotiation, validity or enforceability Contracts (Rights of Third Parties) Act 1999 A person or company who is not a party to this policy has no rights under the Contracts (Rights of Third Parties) Act 1999 in respect of this policy. Elite RAIL_1 10 ix.05

15 5. Discovery Period (i) (ii) (iii) (iv) (v) (vi) If the Company shown in Item 1 of the Schedule refuses to renew this policy, it may upon payment of the sum referred to in Item 10(a) of the Schedule extend the cover under this policy for a period of 12 months from the date on which the Policy Period expires, for any Claim first made against the Insured before or during the Discovery Period, but only in respect of Wrongful Acts committed or alleged to have been committed prior to expiry of the Policy Period. If the Insurer refuses to renew this policy, the Company shown in Item 1 of the Schedule may upon payment of the sum referred to in Item 10(b) of the Schedule extend the cover under this policy for a period of 12 months from the date on which the Policy Period expires, for any Claim first made against the Insured before or during the Discovery Period, but only in respect of Wrongful Acts committed or alleged to have been committed prior to expiry of the Policy Period. The Company s right to purchase the Discovery Period as set out above must be exercised by notice to the Insurer in writing within 30 days of expiration of the Policy Period, and is only effective upon payment of the above sum. The Insurer s offer of renewal terms, conditions, limits of liability or premium different from those of the expiring policy shall not constitute a refusal to renew. The Company shall not have the right to purchase the Discovery Period as set out above in the following events: (a) a Transaction takes place; or (b) cover under this policy being maintained in accordance with Clause 7.3 or 7.4. The Insurer shall not be liable to make any payment in respect of any Claim first made against the Insured during the Discovery Period if at any time the Company obtains any other Directors and Officers insurance policy covering the whole or any part of the Discovery Period. 6. Proposal Form Disclosure and Severability The Insurer has relied upon the Proposal in granting cover under this policy. Such Proposal shall form the basis of this contract of insurance. However, the Proposal shall be construed as a separate proposal by each Insured and with respect to statements and particulars in the Proposal no statements made or information possessed by any Insured shall be imputed to any other Insured to determine whether cover is available for that other Insured. 7. Extensions 7.1 Subsidiaries (i) Cover for any Subsidiary shall apply only in respect of Wrongful Acts occurring whilst such subsidiary was a Subsidiary. (ii) Cover for any Subsidiary that ceased to be a Subsidiary prior to or after the inception of this policy shall apply only in respect of Wrongful Acts occurring whilst such subsidiary was a Subsidiary. (iii) If during the Policy Period the Company shown in Item 1 of the Schedule acquires or creates a Subsidiary that increases the Company s total assets by no greater than the Acquisition Limit referred to in Item 7 of the Schedule then cover shall extend to the Insureds of that Subsidiary for Claims for Wrongful Acts occurring on or after the effective date of such acquisition or creation, without notice to the Insurer or additional premium being payable. (iv) With the agreement of the Insurer and subject to any additional premium, terms and conditions, cover under this policy may be extended to the Directors or Officers of a Subsidiary which does not fall within (iii) above for a Wrongful Act occurring after the acquisition or creation of such Subsidiary. Elite RAIL_1 11 ix.05

16 (v) With the agreement of the Insurer and subject to any additional premium, terms and conditions, cover under this policy may be extended to apply in respect of Wrongful Acts committed by the Directors and Officers of any Subsidiary prior to the acquisition of such Subsidiary by the Company (vi) If during the Policy Period the Company effects a sale or dissolution of a Subsidiary, cover under this policy shall continue to apply (subject to the other policy terms and conditions) to persons who were Directors or Officers of such Subsidiary prior to the sale or dissolution for Claims for Wrongful Acts occurring prior to the effective date of sale or dissolution. 7.2 Directors and Officers In the event of the Insurer avoiding this policy from inception or from the time of any variation in cover due to fraudulent conduct, non-disclosure, misrepresentation or intent to deceive by the Company or one or more Insureds, the Insurer shall maintain cover for each Director or Officer who is an Insured under this policy until the expiry date of the Policy Period unless the Insurer is able to establish that such non-executive Director was involved in or aware of any such fraudulent conduct, non disclosure, misrepresentation or intent to deceive. 7.3 Retired Director or Officer Cover In the event that this policy is not renewed or replaced with any other policy affording Directors and Officers liability cover and a Discovery Period is not invoked, the cover provided by this policy shall subject to the Limit of Liability shown in Item 3 of the Schedule extend to indemnify any Retired Director or Officer in respect of Claims made against such persons during the period of 6 years immediately following the date of such non-renewal. 7.4 Takeovers and Mergers Run-off In the event of a Transaction taking place, then the Insurer may extend cover to apply in respect of Claims first made against an Insured within a period of 72 calendar months from the expiry date of the Policy Period and that arise from Wrongful Acts occurring prior to the date of such Transaction, but such extension of cover shall only be available if the Insurer so decides in its sole discretion, and subject to such additional terms, conditions, exclusions or premium as it may require. In the event of such cover being so extended, Clauses 5 and 7.1 shall be deemed to be deleted from this policy with effect from the date of such Transaction. 7.5 Outside Directorship Extension (i) Cover under this policy is extended (subject to the Insuring Agreement and the other terms and conditions of this policy and subject to the overall aggregate Limit of Liability) to a Director or Officer of the Company who at the specific request of the Company: (a) at the date of inception of the Policy Period was a Director or Officer of any Outside Entity; or (b) becomes a Director or Officer of any Outside Entity during the Policy Period. (ii) Cover under this policy is also extended (subject to the Insuring Agreement and the other terms and conditions of this policy and subject to the overall aggregate Limit of Liability) to a Director or Officer of the Company who at the specific request of the Company is or becomes a Director, Officer, trustee, governor or equivalent in any Outside Entity. (iii) Cover under sub-paragraph (i) or (ii) above shall be excess of any indemnification provided by the Outside Entity. Elite RAIL_1 12 ix.05

17 (iv) Cover under sub-paragraph (i) or (ii) above shall be specifically excess of any valid and collectible Directors and Officers Liability Insurance in force in respect of the Outside Entity and its Directors and Officers. If such insurance is provided by the Insurer or any member of the ACE group of companies (or would be provided except for the application of the retention amount or the exhaustion of the Limit of Liability), then the total aggregate Limit of Liability for all Loss covered by virtue of this extension shall be reduced by the amount paid for the benefit of the Outside Entity and its Directors and Officers under the other ACE insurance provided to the Outside Entity. 7.6 Corporate Manslaughter Extension (i) Subject to item (ii) below, cover under this policy is extended (subject to the Insuring Agreement and the other terms and conditions of this policy and subject to the overall aggregate Limit of Liability) to Defence Costs or Legal Representation Expenses relating to a Claim or criminal investigation for Corporate Manslaughter (or its equivalent in any jurisdiction). (ii) In the event that any element or all elements of cover provided solely by virtue of this Extension 7.6 are covered by any other policy of insurance, then this policy shall apply excess of any valid and collectible insurance. 7.7 Management Buy-outs In the event of a Subsidiary of the Company ceasing to be owned by the Company as a result of a buy-out by existing management the Insurer agrees to maintain cover in respect of such Subsidiary for a period of 30 days from the date of the buy-out for Wrongful Acts committed subsequent to the buy-out. This Extension shall not apply in circumstances where there is other insurance in force which provides cover in respect of such Wrongful Acts. 7.8 National Insurance Contributions The Definition of Loss is extended (subject to the Insuring Agreement and the other terms and conditions of this policy) to include unpaid National Insurance Contributions, so far as the insurance of such liability is not prohibited by law, where the Company has become insolvent and where there exists personal liability of a Director, Officer or Employee. Such cover shall apply in the aggregate up to the sub-limit shown in Item 13 of the Schedule (such sub-limit shall be part of and not in addition to the Limit of Liability shown in Item 3 of the Schedule). Elite RAIL_1 13 ix.05

18 Complaints Procedure We are dedicated to providing you with a high quality service, and want to maintain this at all times. If you feel that we have not offered you a first class service or you wish to make an enquiry regarding this insurance, please contact the intermediary who arranged this insurance for you or the manager of the branch of the company which issued your policy. If you are still not satisfied, you may write to our Chief Executive of the company at ACE s head office the address is shown on your policy. ACE European Group Limited is a member of the Financial Ombudsman Service (FOS) and in limited circumstances, you can approach them for assistance if you remain dissatisfied with our response. Those limited circumstances are where the policy is taken out by: a) An individual b) A business with an annual group turnover of less than GBP1,000,000 c) A charity with annual income of less than GBP1,000,000 and d) A trustee of a trust that has a net asset value of less than GBP1,000,000 The FOS s contact details are FOS, South Quay, 183 Marsh Wall, London, E14 9SR, Phone: enquiries@financial-ombudsman.org.uk Financial Services Authority ACE European Group Limited, UK Head Office, 100 Leadenhall Street, London EC3A 3BP, authorised and regulated by the Financial Services Authority, registration number FRN Full details can be found on the FSA s Register by visiting or by contacting the FSA on Data Protection ACE European Group Limited and its group companies ( ACE ) will use the information supplied during the formation and performance of this Policy for policy administration, customer services, paying claims and fraud prevention. ACE may disclose this information to our service providers and both you and our agents for these purposes. We will keep this information for a reasonable period. Where sensitive personal data has been disclosed, including any medical or criminal record information, ACE will also use this information for the above purposes. ACE may also transfer certain information to countries that do not provide the same level of data protection as the UK for the above purposes. A contract will be in place to ensure the information transferred is protected. Individuals whose information has been supplied to ACE have a right to ask for a copy of that information and to have any inaccuracies corrected. ACE may record telephone calls to make sure it follows instructions correctly and for staff training purposes. When personal or sensitive data is supplied to ACE about third parties other than the Insured, both during the formation and performance of this policy, ACE assumes that those third parties consent to the supply of this information to ACE, to ACE processing this data, including sensitive personal data, and to the transfer of their information abroad. ACE will also assume that the supplier of the information is authorised to receive, on their behalf, any data protection notices. Elite RAIL_1 14 ix.05