EXHIBIT 10(y)(3)
CNA INSURANCE COMPANIES
CNA Plaza.
Chicago, IL 60685
DECLARATIONS EXCESS INSURANCE POLICY
NOTICE
THIS IS A "CLAIMS-MADE" POLICY AND, SUBJECT TO ITS PROVISIONS,
APPLIES ONLY TO ANY CLAIM FIRST MADE AGAINST THE INSUREDS DURING
THE POLICY PERIOD. NO COVERAGE EXISTS FOR ANY CLAIM FIRST MADE
AFTER THE END OF THE POLICY PERIOD UNLESS, AND TO THE EXTENT, THE
EXTENDED REPORTING PERIOD APPLIES. THE LIMIT OF LIABILITY SHALL BE
REDUCED BY AMOUNTS INCURRED AS DEFENSE COSTS.
ACCOUNT NUMBER 45386
COVERAGE PROVIDED BY CONTINENTAL CASUALTY COMPANY
POLICY NUMBER DOX 600028634
AGENCY 910 701862
NAMED ENTITY AND PRINCIPAL ADDRESS
Item 1.
RICHARDSON ELECTRONICS, LTD.
40W267 KESLINGER RD.
LAFOX, IL 60147
Attn: William J. Garry
AGENT
Mesirow Insurance Services, Inc.
Ms. Robina K. Fisher
600 Central Ave., Ste. #390
Highland Park, IL 60035
Item 2. Policy Period:
May 31, 1997 to May 31, 1998
12:01 a.m. Standard Time at the Principal Address stated in Item 1.
Item 3. Limit of Liability (Inclusive of Defense Costs):
$5,000,000 Maximum aggregate Limit of Liability for the Policy
Period.
Item 4. Schedule of Underlying Insurance:
A. Primary Policy:
Name of Carrier Federal Insurance Company
Policy No. 8125-64-60E
Limits $15,000,000
Deductible/Retention Amount 0/0/$250,000
B. Underlying Excess Policy(ies):
Name of Carrier St. Paul Mercury Insurance Company
Policy No. 900DX0414
Limits $15,000,000
Deductible/Retention Amount N/A
Item 5. Policy Premium:
$18,000
Item 6. Forms and Endorsements forming a part of this policy at
inception: G-11713-A12, FIG-1005-A, FIG-1006-A, FIG-1014-A
These Declarations along with the completed and signed Application
and the Excess Insurance Policy, shall constitute the contract
between the Insureds, the Named Entity, and the Insurer.
Authorized Representative /s/ Juli Antoya
Date: 2/23/98
Excess Insurance Policy
In consideration of the payment of the premium and in reliance on
all statements made and information furnished to Continental
Casualty Company (hereinafter called the "Insurer"), and/or to the
insurers of the Underlying Insurance, including the statements made
in the Application made a part hereof and subject to all of the
provisions of this Policy, the Insurer and the Insured agree as
follows:
I. INSURING AGREEMENT
The Insurer shall provide the Insureds with excess coverage over
the Underlying Insurance as set forth in Item 4 of the Declarations
during the Policy Period set forth in Item 2 of the Declarations.
Coverage hereunder shall attach only after all such Underlying
Insurance has been exhausted by payments for losses and shall then
apply in conformance with the same provisions of the Primary Policy
at its inception, except for premium, limit of liability and as
otherwise specifically set forth in the provisions of this Policy.
II. POLICY DEFINITIONS
Application shall mean the written application for this Policy,
including any materials submitted therewith, which together shall
be on file with the Insurer and deemed a part of and attached
hereto as if physically attached to this Policy.
Named Entity means the organization named in Item 1 of the
Declarations.
Insureds means those persons or organization(s) insured under the
Primary Policy, at its inception.
Policy Period means the period from the effective date and hour of
this Policy as set forth in Item 2. of the Declarations, to the
Policy expiration date and hour set forth in Item 2. of the
Declarations, or its earlier cancellation date or termination date,
if any.
Primary Policy means the Policy scheduled in Item 4(a) of the
Declarations.
Underlying Insurance means all those Policies scheduled in Item 4
of the Declarations and any Policies replacing them.
III. MAINTENANCE OF UNDERLYING INSURANCE
All of the Underlying Insurance scheduled in Item 4 of the
Declarations shall be maintained during the Policy Period in full
effect, except for any reduction of the aggregate limit(s) of
liability available under the Underlying Insurance solely by reason
of payment of losses thereunder. Failure to comply with the
foregoing shall not invalidate this Policy but the Insurer shall
not be liable to a greater extent than if this condition had been
complied with. To the extent that any Underlying Insurance is not
maintained in full effect during the currency of this Policy
Period, then the Insureds shall be deemed to have retained any loss
for the amount of the limit of liability of any Underlying
Insurance which is not maintained as set forth above.
In the event of any actual or alleged (a) failure by the Insureds
to give notice or to exercise any extensions under any Underlying
Insurance or (b) misrepresentation or breach of warranties by any
of the Insureds with respect to any Underlying Insurance, the
Insurer shall not be liable hereunder to a greater extent than it
would have been in the absence of such actual or alleged failure,
misrepresentation or breach.
It is further a condition of this Policy that the Insurer shall be
notified in writing, as soon as practicable of cancellation and/or
alteration of any provisions of any of the policies of Underlying
Insurance.
IV. LIMIT OF LIABILITY
The amount set forth in Item 3 of the Declarations shall be the
maximum aggregate Limit of Liability of the Insurer for the Policy
Period.
Costs of defense shall be part of and not in addition to the Limit
of Liability in Item 3 of the Declarations, and such costs of
defense shall reduce the Limit of Liability stated in Item 3 of the
Declarations.
V. DEPLETION OF UNDERLYING LIMIT(S)
In the event of the depletion of the limit(s) of liability of the
Underlying Insurance solely as the result of actual payment of
losses thereunder by the applicable insurers, this Policy shall,
subject to the Insurer's Limit of Liability and to the other terms
of this Policy, continue to apply to losses as Excess Insurance
over the amount of insurance remaining under such Underlying
Insurance. In the event of the exhaustion of all of the limit(s)
of liability of such Underlying Insurance solely as a result of
payment of losses thereunder, the remaining limits available under
this Policy shall, subject to the Insurer's Limit of Liability and
to the other provisions of this Policy, continue for subsequent
losses as primary insurance and any retention specified in the
Primary Policy shall be imposed under this Policy as to each claim
made; otherwise no retention shall be imposed under this Policy.
This Policy only provides coverage excess of the Underlying
Insurance. This Policy does not provide coverage for any loss not
covered by the Underlying Insurance except and to the extent that
such loss is not paid under the Underlying Insurance solely by
reason of the reduction or exhaustion of the available Underlying
Insurance through payments of loss thereunder. In the event the
insurer of one or more of the Underlying Insurance policies fails
to pay loss in connection with any claim covered under the
Underlying Insurance as a result of the insolvency, bankruptcy, or
liquidation of said insurer, then the Insureds hereunder shall be
deemed to have retained any loss for the amount of the limit of
liability of said insurer which is not paid as a result of such
insolvency, bankruptcy or liquidation.
If any Underlying Insurance bears an effective date which is prior
to the effective date of this Policy and if any such insurance
becomes exhausted or impaired by payment of loss with respect to
any claim which, shall be deemed to be made prior to the effective
date of this Policy, then with respect to any claim made after the
effective date of this Policy, the Insureds shall be deemed to have
retained any loss for the amount of any such Underlying Insurance
which is exhausted or impaired by payment of loss with respect to
such claim made prior to the effective date of this Policy.
VI. CLAIM PARTICIPATION
The Insured shall not admit liability, consent to any judgment
against them, or agree to any settlement which is reasonably likely
to involve the Limit of Liability of this Policy without the
Insurer's consent, such consent not to be unreasonably withheld.
The Insurer may, at its sole discretion, elect to participate in
the investigation, settlement or defense of any claim against any
of the Insureds for matters covered by this Policy even if the
Underlying Insurance has not been exhausted.
All provisions of the Underlying Insurance are considered as part
of this Policy except that it shall be the duty of the Insureds and
not the duty of the Insurer to defend any claims against any of the
Insureds.
VII. SUBROGATION - RECOVERIES
In that this Policy is "Excess Coverage", the Insureds and the
Insurer's right of recovery against any person or other entity may
not be exclusively subrogated. Despite the foregoing, in the event
of any payment under this Policy, the Insurer shall be subrogated
to all the Insured's rights of recovery against any person or
organization, and the Insureds shall execute and deliver
instruments and papers and do whatever else is necessary to secure
such rights.
Any amounts recovered after payment of loss hereunder shall be
apportioned in the inverse order of payment to the extent of actual
payment. The expenses of all such recovery proceedings shall be
apportioned in the ratio of respective recoveries.
VIII. NOTICE
The Insurer shall be given notice in writing as soon as is
practicable in the event of (a) the cancellation of any Underlying
Insurance and (b) any additional or return premiums charged or
allowed in connection with any Underlying Insurance. Notice
regarding (a) and (b) above shall be given to Manager, Directors
and Officers Liability Underwriting, CNA Insurance Companies, CNA
Plaza, Chicago, Illinois 60685.
The Insurer shall be given notice as soon as practicable of any
notice of claim or any situation that could give rise to a claim
under any Underlying Insurance. Notice of any claim to the Insurer
shall be given in writing to Manager, Professional Liability
Claims, CNA Insurance Companies, CNA Plaza, Chicago, Illinois
60685.
IX. COMPANY AUTHORIZATION CLAUSE
By acceptance of this Policy, the Named Entity named in Item 1 of
the Declarations agrees to act on behalf of all the Insureds with
respect to the giving and receiving of notice of claim or
cancellations, the payment of premiums and the receiving of any
return premiums that may become due under this Policy and the
Insureds agree that the Named Entity shall in all cases be
authorized to act on their behalf.
X. ALTERATION
No change in or modification of this Policy shall be effective
except when made by endorsement signed by an authorized employee of
the Insurer or any of its agents relating to this Policy.
XI. POLICY CANCELLATION
This Policy may be cancelled by the Named Entity at any time by
written notice or by surrender of this Policy to the Insurer. This
Policy may also be cancelled by or on behalf of the Insurer by
delivery to the Named Entity or by mailing to the Named Entity, by
registered, certified or other first class mail, at the address
shown in Item 1 of the Declarations, written notice stating when,
not less than thirty (30) days thereafter, the cancellation shall
become effective. The mailing of such notice as aforesaid shall be
sufficient proof of notice and this Policy shall cancel at the date
and hour specified in such notice.
If the period of limitation relating to the giving of notice is
prohibited or made void by any law controlling the construction
thereof, such period shall be deemed to be amended so as to be
equal to the minimum period of limitation permitted by such law.
The Insurer shall refund the unearned premium computed at less than
pro-rata if the Policy is cancelled in its entirety by the Named
Entity. Under any other circumstances the refund shall be computed
pro rata.
XII. EXCLUSIONS
Notwithstanding any provisions of the Underlying Insurance, the
Insurer shall not be liable to make payment for loss in connection
with any claim based upon, arising out of, relating to, directly or
indirectly resulting from, or in consequence of, or in any way
involving:
1. nuclear reaction, radiation or contamination regardless of
causes;
2. pollutants, including but not limited to loss arising out of
any:
a. request, demand or order that any of the Insureds or
others test for, monitor, clean up, remove, contain,
treat, detoxify or neutralize, or in any way respond to,
or assess the effects of pollutants, or
b. claim by or on behalf of a governmental authority for
damages because of testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying or
neutralizing or in any way responding to or assessing the
effects of pollutants;
Pollutants means any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis,
chemicals and waste. Waste includes materials to be recycled,
reconditioned or reclaimed .
XIII. CONDITIONS
No action shall be taken against the Insurer unless, as a condition
precedent, there shall have been full compliance with all the
provisions of this Policy, nor until the amount of the Insureds
obligation to pay shall have been finally determined either by
final and nonappealable judgement against the Insureds after trial,
or by written agreement of the Insureds, the claimant and the
Insurer.
D.W. Lowry, Secretary D.H. Chookasigian, Chairman of the Board
State Provisions - Illinois
Any cancellation or non-renewal provisions contained in the policy
to which this endorsement is attached are deleted and replaced by
the following:
1. Cancellation
A. This policy can be cancelled by either the first named insured
or the insurer.
1. The named insured can cancel this policy at any time by
mailing advance written notice to the insurer stating when the
cancellation is to be effective.
2. The insurer can cancel this policy by giving written
notice to the named insured at least:
a. 10 days, if cancellation is for non-payment of
premium. However, the named insured may continue the coverage by
payment in full at any time prior to the effective date of
cancellation;
b. 30 days, if cancellation is for any other reason
provided that the policy has been in effect for 60 days or less; or
c. 60 days, if the policy has been in effect for more
than 60 days and cancellation is for any other reason as set forth
below;
before the effective date of cancellation.
B. The insurer will mail notice to the named insured at the
last mailing address known to the insurer, and a copy shall also be
mailed to the named insured's agent.
C. Notice of cancellation will state the effective date of
cancellation. The policy will end on that date. The specific
reason for such cancellation shall also be stated.
D. Proof of mailing will be sufficient proof of notice.
E. If this policy is cancelled, the insurer will send the
first named insured any premium refund due. If the insurer
cancels, the refund will be pro-rata. If the named insured
cancels, the refund may be less than pro-rata.
The cancellation will be effective even if the insurer has not
made or offered a refund.
If this policy has been in effect for more than 60 days, the
insurer shall not terminate this policy except for one or more of
the following conditions:
1. Non-payment of premium;
2. Material misrepresentation;
3. A material increase in the hazard insured against;
4. Violation of any terms or conditions of the policy by the
named insured;
5. Substantial loss of reinsurance by the insurer affecting
this particular type of insurance, certified to the insurance
regulatory authority;
6. A determination by the insurance regulatory authority
that continuation of the policy will place the insurer in violation
of the insurance laws of the state.
II. Non-Renewal
If the insurer decides not to renew this policy, 60 days advance
written notice shall be mailed to the named insured as the last
known address.
The notice shall include the specific reason for such non-renewal.
If the insurer offers to renew this policy at terms which involve
an increase in premium of 30% or more or changes in deductibles or
coverage that materially alter the policy, such terms will take
effect on the renewal date if the insurer has notified the named
insured of the terms at least 60 days prior to the expiration date
of this policy.
This notice is to advice the named insured that should any
complaints arise regarding this insurance, the named insured may
contact the following:
CNA Insurance Companies
Attn: Consumer Affairs Department - 13S
CNA Plaza
Chicago, IL 60685
and/or
Illinois Department of Insurance
Consumer Division or Public Service Section
Springfield, IL 62767
This endorsement, which forms a part of and is for attachment to
the following described Policy issued by the designated Insurers
takes effect on the effective date of said Policy, unless another
effective date is shown below, at the hour stated in said Policy
and expires concurrently with said Policy.
Endt. No. 01
Policy No. 600028634
CNA Authorized Representative
Prior Notice Exclusion
In consideration of the premium paid for this policy, it is agreed
that Section XII, Exclusions, is amended with the addition of the
following:
Any fact, circumstance, situation, transaction or event which
constitutes the basis of notice of claim to the Insurer or any
insurance carriers designated in Item 4 of the Declarations, prior
to the inception date of this policy.
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for attachment to
the following described Policy issued by the designated Insurers
takes effect on the effective date of said Policy, unless another
effective date is shown below, at the hour stated in said Policy
and expires concurrently with said Policy.
Endt. No. 02
Policy No. 600028634
CNA Authorized Representative
Prior or Pending Litigation Exclusion
In consideration of the premium paid for this policy, it is agreed
that Section XII, is amended with the addition of the following:
3. Any fact, circumstance, situation, transaction or event
underlying or alleged in any prior and/or pending litigation as of
5/31/91, regardless of the legal theory upon which such litigation
is predicated.
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for attachment to
the following described Policy issued by the designated Insurers
takes effect on the effective date of said Policy, unless another
effective date is shown below, at the hour stated in said Policy
and expires concurrently with said Policy.
Endt. No. 03
Policy No. 600028634
CNA Authorized Representative
Inapplicability of Primary Policy Endorsement
In consideration of the premium paid for this policy, it is agreed
that for the coverage afforded under this policy endorsement number
8 to the Primary Policy shall not apply to this Policy.
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for attachment to
the following described Policy issued by the designated Insurers
takes effect on the effective date of said Policy, unless another
effective date is shown below, at the hour stated in said Policy
and expires concurrently with said Policy.
Endt. No. 04
Policy No. 600028634
CNA Authorized Representative