EXHIBIT 10.1
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POLICY NUMBER:
445-86-62
[LOGO OF AMERICAN INTERNATIONAL COMPANIES]
DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE POLICY
[_]AIU Insurance Company [_]Illinois National Insurance Company
[_]American Global Insurance Company [X]National Union Fire Insurance Company of Pittsburgh, Pa
[_]Granite State Insurance Company [_]National Union Fire Insurance Company of Louisiana
[_]New Hampshire Insurance Company [_]Birmingham Fire Insurance Company of Pennsylvania
(each of the above being a capital stock company)
__________________________________________________________________
NOTICE: EXCEPT TO SUCH EXTENT AS MAY OTHERWISE BE PROVIDED HEREIN, THE
COVERAGE OF THIS POLICY IS GENERALLY LIMITED TO LIABILITY FOR ONLY THOSE CLAIMS
THAT ARE FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD AND REPORTED
IN WRITING TO THE INSURER PURSUANT TO THE TERMS HEREIN. PLEASE READ THE POLICY
CAREFULLY AND DISCUSS THE COVERAGE THEREUNDER WITH YOUR INSURANCE AGENT OR
BROKER.
NOTICE: THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL
BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE. AMOUNTS INCURRED FOR LEGAL
DEFENSE SHALL BE APPLIED AGAINST THE RETENTION AMOUNT.
NOTICE: THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND; HOWEVER, THE INSURER
MUST ADVANCE DEFENSE COSTS PAYMENTS PURSUANT TO THE TERMS HEREIN PRIOR TO THE
FINAL DISPOSITION OF A CLAIM.
DECLARATIONS
ITEM 1. NAMED CORPORATION: VENCOR INC
MAILING ADDRESS: 3300 PROIVIDIAN CENTER
LOUISVILLE, KY 40202
STATE OF INCORPORATION OF THE NAMED CORPORATION: Delaware
ITEM 2. SUBSIDIARY COVERAGE: any past, present or future Subsidiary of the Named Corporation
ITEM 3. POLICY PERIOD: From: September 28, 1995 To: September 28, 1996
(12:01 AM standard time at the address stated in Item 1.)
ITEM 4. LIMIT OF LIABILITY: $20,000,000 aggregate for Coverages A and B combined
(including Defense Costs)
ITEM 5. RETENTION:
SECURITIES CLAIMS
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Judgments & Settlements (all coverages) None
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Defense Costs (non-Indemnifiable Loss) None
Defense Costs (Coverage B(i) and
Indemnifiable Loss) $ 200,000 for Loss arising from Claims alleging the
same Wrongful Act or related Wrongful Acts
(waivable under Clause 6 in certain
circumstances)
OTHER CLAIMS:
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Judgments, Settlements and Defense
Costs (non-Indemnifiable Loss) None
Judgments, Settlements and Defense
Costs (Indemnifiable Loss) $200,000 for Loss arising from Claims alleging the
same Wrongful Act or related Wrongful Acts
ITEM 6. CONTINUITY DATES:
A. Coverages A and B(ii): September 01, 1989
B. Coverage B(i): September 28, 1995
C. Outside Entity Coverage: Per Outside Entity, see endorsement # 15, 16, 17 & 18
ITEM 7. PREMIUM: $335,000 + $ 5,025 KY Surcharge
ITEM 8. NAME AND ADDRESS OF INSURER ("Insurer"):
(This policy is issued only by the insurance company indicated below.)
National Union Fire Insurance Company of Pittsburgh, Pa.
70 Pine Street
New York, NY 10270
IN WITNESS WHEREOF, the Insurer has caused this policy to be signed by its
President and Secretary and signed on the Declarations Page by a duly authorized
representative of the Insurer.
/s/ Elizabeth M. Tuck [SIGNATURE ILLEGIBLE]
SECRETARY PRESIDENT
ALEXANDER & ALEXANDER
TWO PRUDENTIAL PLAZA
CHICAGO, IL 60601-6714
[SIGNATURE ILLEGIBLE]
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AUTHORIZED REPRESENTATIVE
11-27-95 LOUISVILLE, KY
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COUNTERSIGNATURE DATE COUNTERSIGNED AT
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DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE POLICY
In consideration of the payment of the premium, and in reliance upon the
statements made to the Insurer by application forming a part hereof and its
attachments and the material incorporated therein, the insurance company
designated in Item 8 of the Declarations, herein called the "Insurer", agrees as
follows:
1. INSURING AGREEMENTS
COVERAGE A: DIRECTORS AND OFFICERS INSURANCE
This policy shall pay the Loss of each and every Director or Officer of the
Company arising from a Claim first made against the Directors or Officers
during the Policy Period or the Discovery Period (if applicable) and
reported to the Insurer pursuant to the terms of this policy for any actual
or alleged Wrongful Act in their respective capacities as Directors or
Officers of the Company, except when and to the extent that the Company has
indemnified the Directors or Officers. The Insurer shall, in accordance
with and subject to Clause 8, advance Defense Costs of such Claim prior to
its final disposition.
COVERAGE B: CORPORATE LIABILITY INSURANCE
This policy shall pay the Loss of the Company arising from a:
(i) Securities Claim first made against the Company, or
(ii) Claim first made against the Directors or Officers,
during the Policy Period or the Discovery Period (if applicable) and
reported to the Insurer pursuant to the terms of this policy for any actual
or alleged Wrongful Act, but, in the case of (ii) above, only when and to
the extent that the Company has indemnified the Directors or Officers for
such Loss pursuant to law, common or statutory, or contract, or the Charter
or By-laws of the Company duly effective under such law which determines
and defines such rights of indemnity. The Insurer shall, in accordance with
and subject to Clause 8, advance Defense Costs of such Claim prior to its
final disposition.
2. DEFINITIONS
(a) "Claim" means:
(1) a written demand for monetary or non-monetary relief, or
(2) a civil, criminal, or administrative proceeding for monetary or
non-monetary relief which is commenced by:
(i) service of a complaint or similar pleading; or
(ii) return of an indictment (in the case of a criminal
proceeding); or
(iii) receipt or filing of a notice of charges.
The term "Claim" shall include a Securities Claim; provided, however,
that with respect to Coverage B(i) only, Claim or Securities Claim
shall not mean a criminal or administrative proceeding against the
Company.
(b) The "Company" means the Named Corporation designated in Item I of the
Declarations and any Subsidiary thereof.
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(c) "Continuity Date" means the date set forth in:
(1) Item 6A of the Declarations with respect to Coverages A and
B(ii); or
(2) Item 6B of the Declarations with respect to Coverage B(i); or
(3) Item 6C of the Declarations with respect to Coverages A or B for
a Claim against an Insured arising out of such Insured serving as
a director, officer, trustee or governor of an Outside Entity.
(d) "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, but without any
obligation to apply for or furnish any such bond) resulting solely
from the investigation, adjustment, defense and appeal of a Claim
against the Insureds, but excluding salaries of Officers or employees
of the Company.
(e) "Director(s) or Officer(s)" or "Insured(s)" means:
(1) with respect to Coverages A and B(ii), any past, present or
future duly elected or appointed directors or officers of the
Company. In the event the Named Corporation or a Subsidiary
thereof operates outside the United States, then the term
"Director(s) or Officer(s)" or "Insured(s)" also means those
titles, positions or capacities in such foreign Named Corporation
or Subsidiary which is equivalent to the position of Director or
Officer in a corporation incorporated within the United States.
Coverage will automatically apply to all new Directors and
Officers after the inception date of this policy;
(2) with respect to Coverage B(i) only, the Company.
(f) "Listed Event" means any of the following events:
(1) any event for which the Company has reported or is required to
report on Form 8-K filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934; or
(2) any restatement or correction of a Company financial statement
contained in any document filed with the Securities and Exchange
Commission; or
(3) any statement or disclosure made by or on the behalf of the
Company relating to a prior forecast, estimate or projection of
the Company's earnings or sales made by or on the behalf of the
Company, which statement or disclosure represents a greater than
15% change from such prior forecast, estimate or projection.
(g) "Loss" means damages, judgments, settlements and Defense Costs;
however, Loss shall not include civil or criminal fines or penalties
imposed by law, punitive or exemplary damages, the multiplied portion
of multiplied damages, taxes, any amount for which the Insureds are
not financially liable or which are without legal recourse to the
Insureds, or matters which may be deemed uninsurable under the law
pursuant to which this policy shall be construed.
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Further, with respect to Coverage B only, Loss shall not include
damages, judgments or settlements arising out of a Claim alleging that
the Company paid an inadequate or unfair price or consideration for
the purchase of its own securities or the securities of a subsidiary.
Notwithstanding the foregoing, with respect to Coverage B(i) only and
subject to the other terms, conditions and exclusions of the policy,
Loss shall include punitive damages (if insurable by law) imposed upon
the Company.
(h) "No Liability" means with respect to a Securities Claim made against
the Insured(s): (1) a final judgment of no liability obtained prior to
trial, in favor of all Insureds, by reason of a motion to dismiss or a
motion for summary judgment, after the exhaustion of all appeals; or
(2) a final judgment of no liability obtained after trial, in favor of
all Insureds, after the exhaustion of all appeals. In no event shall
the term "No Liability" apply to a Securities Claim made against an
Insured for which a settlement has occurred.
(i) "Outside Entity" means:
(1) a not-for-profit organization under section 501(c)(3) of the
Internal Revenue Code of 1986 (as amended); or
(2) any other corporation, partnership, joint venture or other
organization listed by endorsement to this policy.
(J) "Policy Period" means the period of time from the inception date shown
in Item 3 of the Declarations to the earlier of the expiration date
shown in Item 3 of the Declarations or the effective date of
cancellation of this policy; however, to the extent that coverage
under this policy replaces coverage in other policies terminating at
noon standard time on the inception date of such coverage hereunder,
then such coverage as is provided by this policy shall not become
effective until such other coverage has terminated.
(k) "Securities Claim" means a Claim made against an Insured which alleges
a violation of the Securities Act of 1933 or the Securities Exchange
Act of 1934, rules or regulations promulgated thereunder, the
securities laws of any state, or any foreign jurisdiction, and which
alleges a Wrongful Act in connection with the claimant's purchase or
sale of; or the offer to purchase or sell to the claimant, any
securities of the Company, whether on the open market or arising from
a public or private offering of securities by the Company.
(l) "Subsidiary" means:
(1) a corporation of which the Named Corporation owns on or before
the inception of the Policy Period more than 50% of the issued
and outstanding voting stock either directly, or indirectly
through one or more of its Subsidiaries;
(2) automatically a corporation whose assets total less than 10% of
the total consolidated assets of the Company as of the inception
date of this policy, which corporation becomes a Subsidiary
during the Policy Period. The Named Corporation shall provide the
Insurer with full particulars of the new Subsidiary before the
end of the Policy Period;
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(3) a corporation which becomes a Subsidiary during the Policy Period
(other than a corporation described in paragraph (2) above) but
only upon the condition that within 90 days of its becoming a
Subsidiary, the Named Corporation shall have provided the Insurer
with full particulars of the new Subsidiary and agreed to any
additional premium and/or amendment of the provisions of this
policy required by the Insurer relating to such new Subsidiary.
Further, coverage as shall be afforded to the new Subsidiary is
conditioned upon the Named Corporation paying when due any
additional premium required by the Insurer relating to such new
Subsidiary.
A corporation becomes a Subsidiary when the Named Corporation owns
more than 50% of the issued and outstanding voting stock, either
directly, or indirectly through one or more of its Subsidiaries. A
corporation ceases to be a Subsidiary when the Named Corporation
ceases to own more than 50% of the issued and outstanding voting
stock, either directly, or indirectly through one or more of its
Subsidiaries.
In all events, coverage as is afforded with respect to a Claim made
against a Subsidiary or any Director or Officer thereof shall only
apply for Wrongful Acts committed or allegedly committed after the
effective time that such Subsidiary became a Subsidiary and prior to
the time that such Subsidiary ceased to be a Subsidiary.
(m) "Wrongful Act" means:
(1) with respect to individual Directors or Officers, any breach of
duty, neglect, error, misstatement, misleading statement,
omission or act by the Directors or Officers of the Company in
their respective capacities as such, or any matter claimed
against them solely by reason of their status as Directors or
Officers of the Company, or any matter claimed against them
arising out of their serving as a director, officer, trustee or
governor of an Outside Entity in such capacities, but only if
such service is at the specific written request or direction of
the Company,
(2) with respect to the Company, any breach of duty, neglect, error,
misstatement, misleading statement, omission or act by the
Company, but solely as respects a Securities Claim.
3 EXTENSIONS
Subject otherwise to the terms hereof, this policy shall cover Loss arising
from a Claim made against the estates, heirs, or legal representatives of
deceased Directors or Officers, and the legal representatives of Directors
or Officers in the event of incompetency, insolvency or bankruptcy, who
were Directors or Officers at the time the Wrongful Acts upon which such
Claims are based were committed.
Subject otherwise to the terms hereof, this policy shall cover Loss
arising from a Claim made against the lawful spouse (whether such status is
derived by reason of statutory law, common law or otherwise of any
applicable jurisdiction in the world) of an individual Director or Officer
for a Claim arising solely out of his or her status as the spouse of an
individual Director or Officer, including a Claim that seeks damages
recoverable from marital community property, property jointly held by the
individual Director or Officer and the spouse, or property transferred from
the individual Director or Officer to the spouse; provided, however, that
this extension shall not afford coverage for any Claim for any actual or
alleged Wrongful Act of the spouse, but shall apply only to Claims arising
out of any actual or alleged Wrongful Acts of an individual Director or
Officer, subject to the policy's terms, conditions and exclusions.
62335 (5/95) 4
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4. EXCLUSIONS
The Insurer shall not be liable to make any payment for Loss in connection
with a 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 an Insured was not legally entitled;
(b) arising out of, based upon or attributable to: (1) profits in fact
made from the purchase or sale by an Insured of securities of the
Company within the meaning of Section 16(b) of the Securities Exchange
Act of 1934 and amendments thereto or similar provisions of any state
statutory law; or (2) payments to an Insured of any remuneration
without the previous approval of the stockholders of the Company,
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 criminal or deliberate fraudulent act;
[The Wrongful Act of a Director or Officer shall not be imputed to any
other Director or Officer for the purpose of determining the applicability
of the foregoing exclusions 4(a) through 4(c)]
(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 any pending or
prior litigation as of the Continuity Date, or alleging or derived
from the same or essentially the same facts as alleged in such pending
or prior litigation;
(f) alleging, arising out of, based upon or attributable to a Listed Event
that occurs no later than 90 days subsequent to the Continuity Date;
provided, however, that this exclusion shall only apply with respect
to coverage which would have otherwise been afforded under Coverage
B(i) of the policy;
(g) with respect to serving as a director, officer, trustee or governor of
an Outside Entity, for any Wrongful Act occurring prior to the
Continuity Date if the Insured knew or could have reasonably foreseen
that such Wrongful Act could lead to a Claim under this policy;
(h) alleging, arising out of, based upon or attributable to any actual or
alleged act or omission of the Directors or Officers serving in their
capacities as directors, officers, trustees or governors of any other
entity other than the Company or an Outside Entity, or by reason of
their status as directors, officers, trustees or governors of such
other entity;
(i) which is brought by any Insured or by the Company; or which is brought
by any security holder of the Company, whether 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,
any Insured or the Company; provided, however, this
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exclusion shall not apply to a wrongfUl termination of employment
Claim brought by a former employee other than a former employee who is
or was a Director of the Company;
(j) for any Wrongful Act arising out of the Insured serving as a director,
officer, trustee or governor of an Outside Entity if such Claim is
brought by the Outside Entity or by any director or officer thereof;
or which is brought by any security holder of the Outside Entity,
whether 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 director or officer
thereof, the Company or an Insured.
(k) for bodily injury, sickness, disease, death or emotional distress of
any person, or damage to or destruction of any tangible property,
including the loss of use thereof, or for injury from libel or slander
or defamation or disparagement, or for injury from a violation of a
person's right of privacy;
(l) alleging, arising out of, based upon, attributable to, or in any way
involving, directly or indirectly:
(1) the actual, alleged or threatened discharge, dispersal, release or
escape of pollutants; or
(2) 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 the Company
or its securities holders.
Pollutants include (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;
(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 state
statutory law or common law.
5. LIMIT OF LIABILITY (FOR ALL LOSS - INCLUDING DEFENSE COSTS)
The Limit of Liability stated in Item 4 of the Declarations is the limit of
the Insurer's liability for all Loss, under Coverage A and Coverage B
combined, arising out of any Claim first made against the Insureds during
the Policy Period and the Discovery Period (if applicable); however, the
Limit of Liability for the Discovery Period 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
aggregate Limit of Liability stated in Item 4 of the Declarations.
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.
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6. RETENTION CLAUSE
The Insurer shall only be liable for the amount of Loss arising from a
Claim which is in excess of the Retention amount stated in Item 5 of the
Declarations, such Retention amount to be borne by the Company and/or the
Insureds and shall remain uninsured, with regard to all Loss under: (i)
Coverage A or B(ii) for which the Company has indemnified or is permitted
or required to indemnify the Director(s) or Officer(s) ("Indemnifiable
Loss"); or (ii) Coverage B(i). A single Retention amount shall apply to
Loss arising from all Claims alleging the same Wrongful Act or related
Wrongful Acts.
Notwithstanding the foregoing, solely with respect to a Securities Claim
under this policy, the Retention shall only apply to Defense Costs;
provided, however, no Retention shall apply for a Securities Claim even as
respects Defense Costs in the event of a determination of No Liability of
all Insureds, and the Insurer shall thereupon reimburse such Defense Costs
paid by the Insured.
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) The Company or the Insureds 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 as soon as practicable
and either:
(1) anytime during the Policy Period or during 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(s) is
reported no later than 30 days after the date such Claim was
first made against an Insured.
(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 the
Insureds 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 made at the time such
notice was given.
(c) If during the Policy Period or during the Discovery Period (if
applicable) the Company or the Insureds shall become aware of any
circumstances which may reasonably be expected to give rise to a Claim
being made against the Insureds and shall give written notice to the
Insurer of the circumstances 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 the Insureds
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.
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8. DEFENSE COSTS, SETTLEMENTS, JUDGMENTS (INCLUDING THE ADVANCEMENT OF DEFENSE
COSTS)
Under both Coverage A and Coverage B of this policy, except as hereinafter
stated, the Insurer shall advance, at the written request of the Insured,
Defense Costs prior to the final disposition of a Claim. Such advance
payments by the Insurer shall be repaid to the Insurer by the Insureds or
the Company, severally according to their respective interests, in the
event and to the extent that the Insureds or the Company shall not be
entitled under the terms and conditions of 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 AND THE
NEGOTIATION OF ANY SETTLEMENT OF ANY CLAIM.
The Insurer shall have the right to effectively associate with the Company
and the Insureds in the defense of any Claim that appears reasonably likely
to involve the Insurer, including but not limited to negotiating a
settlement. The Company and the Insureds shall give the Insurer full
cooperation and such information as it may reasonably require.
The Insurer may make any settlement of any Claim it deems expedient with
respect to any Insured subject to such Insured's written consent. If any
Insured withholds consent to such settlement, the Insurer's liability for
all Loss on account of such Claim shall not exceed the amount for which the
Insurer could have settled such Claim plus Defense Costs incurred as of the
date such settlement was proposed in writing by the Insurer.
The Company is not covered in any respect under Coverage A; the Company is
covered, subject to the policy's terms and conditions, only with respect to
its indemnification of its Directors or Officers under Coverage B(ii) as
respects a Claim against such Directors and Officers, and subject to the
policy's terms and conditions, under Coverage B(i) for a Securities Claim
made against the Company. Accordingly, the Insurer has no obligation under
this policy for Defense Costs incurred by, judgments against or settlements
by the Company arising out of a Claim made against the Company other than a
covered Securities Claim, or any obligation to pay Loss arising out of any
legal liability that the Company has to a claimant except as respects a
covered Securities Claims against the Company.
With respect to (i) Defense Costs jointly incurred by, (ii) any joint
settlement made by, and/or (iii) any adjudicated judgment of joint and
several liability against the Company and any Director or Officer, in
connection with any Claim other than a Securities Claim, the Company and
the Director(s) or Officer(s) and the Insurer agree to use their best
efforts to determine a fair and proper allocation of the amounts as between
the Company and the Director(s) or Officer(s) and the Insurer, taking into
account the relative legal and financial exposures of and the relative
benefits obtained by the Directors and Officers and the Company. 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 such
Defense Costs 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.
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9. PRE-AUTHORIZED SECURITIES DEFENSE ATTORNEYS
Only with respect to a Securities Claim:
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
Insured 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 them.
The Insureds shall select a Panel Counsel Firm to defend a Securities Claim
made against the Insureds in the jurisdiction in which the Securities Claim
is brought. In the event a Securities 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 Corporation is located. In such instance the
Insureds also may, with the consent of the Insure, 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 Securities 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 other Insured
defendants 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 change shall be made to the specific list attached to
this policy during the Policy Period without the consent of the Named
Corporation. At the request of the Insured, the Insurer may in its
discretion add to the attached list of Panel Counsel Firms for the purposes
of defending a Securities Claim made against the Insured in any specified
jurisdiction (including a jurisdiction not originally included in the Panel
Counsel list) a Panel Counsel Firm not originally listed for such
jurisdiction. The Insurer may in its discretion waive, in part or in whole,
the provisions of this clause as respects a particular Claim.
10. DISCOVERY CLAUSE
Except as indicated below, if the Insurer or the Named Corporation shall
cancel or refUse to renew this policy, the Named Corporation shall have the
right, upon payment of an additional premium of 75% of the "full annual
premium", to a period of one year following the effective date of such
cancellation or nonrenewal (herein referred to as the Discovery Period) in
which to give to the Insurer written notice of Claims first made against
the Insureds during said one yew period for any Wrongful Act occurring
prior to the end of the Policy Period and otherwise covered by this policy.
As used herein, "full annual premium" means the premium level in effect
immediately prior to the end of the Policy Period. The rights contained in
this paragraph shall terminate, however, unless written notice of such
election together with the additional premium due is received by the
Insurer within 30 days of the effective date of cancellation or nonrenewal.
In the event of a Transaction, as defined in Clause 12, the Named
Corporation shall have the right, within 30 days before the end of the
Policy Period, 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) for a period of no less than three years or for such longer or
shorter period as the Named Corporation may request.
62335 (5/95) 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Insurer shall offer such Discovery Period pursuant to such terms,
conditions and 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 additional premium for the Discovery Period shall be fully earned at
the inception of the Discovery Period. The Discovery Period is not
cancelable. This clause and the rights contained herein shall not apply to
any cancellation resulting from non-payment of premium.
11. CANCELLATION CLAUSE
This policy may be canceled by the Named Corporation 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 also be canceled by
or on behalf of the Insurer by delivering to the Named Corporation or by
mailing to the Named Corporation, by registered, certified, or other first
class mail, at the Named Corporation's address as shown in Item 1 of the
Declarations, written notice stating when, not less than 60 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.
If this policy shall be canceled by the Named Corporation, the Insurer
shall retain the customary short rate proportion of the premium herein.
If this policy shall be canceled by the Insurer, the Insurer shall retain
the pro rata proportion of the premium herein.
Payment or tender of any unearned premium by the Insurer shall not be a
condition precedent to the effectiveness of cancellation, but such payment
shall be made as soon as practicable.
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.
12. CHANGE IN CONTROL OF NAMED CORPORATION
If during the Policy Period:
a. the Named Corporation shall consolidate with or merge into, or sell
all or substantially all of its assets to any other person or entity
or group of persons and/or entities acting in concert; or
b. any person or entity or group of persons and/or entities acting in
concert shall acquire an amount of the outstanding securities
representing more than 50% of the voting power for the election of
Directors of the Named Corporation, or acquires the voting rights of
such an amount of such securities;
(either of the above events herein referred to as the "Transaction")
62335 (5/95) 10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Corporation shall also have the right to
an offer by the Insurer of a Discovery Period described in Clause 10 of the
policy.
The Named Corporation shall give the Insurer written notice of the
Transaction as soon as practicable, but not later than 30 days after the
effective date of the Transaction.
13. SUBROGATION
In the event of any payment under this policy, the Insurer shall be
subrogated to the extent of such payment to all the Company's and the
Insureds' rights of recovery thereof, and the Company and the Insureds
shall execute all papers required and shall do everything that may be
necessary to secure such rights including the execution of such documents
necessary to enable the Insurer effectively to bring suit in the name of
the Company and/or the Insureds. 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 criminal act, or been
judicially determined to have committed a deliberate fraudulent act, or
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.
In the event of a Claim against a Director or Officer arising out of his or
her serving as a director, officer, trustee or governor of an Outside
Entity, coverage as is afforded by this policy shall be specifically excess
of indemnification provided by such Outside Entity and any insurance
provided to such Outside Entity with respect to its directors or officers.
Further, in the event such other Outside Entity insurance is provided by
the Insurer or any member 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) then the maximum aggregate Limit of Liability for all Losses
combined covered by virtue of this policy as respects any such Claim shall
be reduced by the limit of liability (as set forth on the Declarations
Page) of the other AIG insurance provided to such Outside Entity.
15. NOTICE AND AUTHORITY
It is agreed that the Named Corporation shall act on behalf of its
Subsidiaries and all Insureds with respect to the giving of notice of Claim
or giving and receiving 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 to exercise 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.
62335 (5/95) 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
17. ARBITRATION
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 American Arbitration Association
under and in accordance with its then prevailing commercial arbitration
rules. The arbitrators shall be chosen in the manner and within the time
frames provided by such rules. If permitted under such rules, the
arbitrators shall be three disinterested individuals having knowledge of
the legal, corporate management, or insurance issues relevant to the
matters in dispute.
Any party may commence such arbitration proceeding in either New York, NY;
Atlanta, Georgia; Chicago, Illinois; or Denver, Colorado. The arbitrators
shall give due consideration to the general principles of Delaware law in
the construction and interpretation of the provisions of this policy;
provided, however, that the terms, conditions, provisions and exclusions of
this policy are to be construed in an evenhanded fashion as between the
parties, including without limitation, where the language of this policy is
alleged to be ambiguous or otherwise unclear, the issue shall be resolved
in the manner most consistent with the relevant terms, conditions,
provisions or exclusions of the policy (without regard to the authorship of
the language, the doctrine of reasonable expectation of the parties and
without any presumption or arbitrary interpretation or construction in
favor of either party or parties, and in accordance with the intent of the
parties.)
The written decision of the arbitrators shall be provided to both parties
and shall be binding on them. The arbitrators' award shall not include
attorney fees or other costs.
Each party shall bear equally the expenses of the arbitration.
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, nor until the amount
of the Insureds' obligation to pay shall have been finally determined
either by judgment against the Insureds after actual trial or by written
agreement of the Insureds, 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 fight under this policy to
join the Insurer as a party to any action against the Insureds or the
Company to determine the Insureds' liability, nor shall the Insurer be
impleaded by the Insureds or the Company or their legal representatives.
Bankruptcy or insolvency of the Company or the Insureds or of their estates
shall not relieve the Insurer of any of its obligations hereunder.
19. HEADINGS
The descriptions in the headings of this policy are solely for convenience,
and form no part of the terms and conditions of coverage.
62335 (5/95) 12
- --------------------------------------------------------------------------------
APPENDIX A
----------
PANEL COUNSEL
Palo Alto
CALIFORNIA
Los Angeles
Wilson Sonsini Goodrich & Rosati
Gibson Dunn & Crutcher 650 Page Mill Road
333 South Grand Avenue Palo Alto, California 94304-1050
Los Angeles, California 90071-3197 Contact Person: Bruce Vanyo or
Contact Person: Robert Warren or Steven Sethatz (415) 493-9300
Robert S. Warren (213) 229-7326
Wayne W. Smith (213) 229-7464 Heller, Ellman, White & McAuliffe
John H. Sharer (213) 229-7476 525 University Avenue
Palo Alto, California 94301
Irell & Manella Contact Person: Norman J. Blears
1800 Avenue Of The Stars (415) 324-7000
Suite 900
Los Angeles, California 90067-4276
Contact Person: Richard Borow San Francisco
(310) 277-1010
Brobeck, Phleger & Harrison
Kirkland & Ellis Spear Street Tower
300 South Grand Avenue One Market
Los Angeles, California 90071 San Francisco, California 94104
Contact Person: Jeffrey S. Davidson or Contact Person:
Stephen C. Neal Tower C. Snow, Jr. (415) 442-0900
(213) 680-8400
Heller, Ehrman, White & McAuliffe
Latham & Watkins 333 Bush Street
633 West Fifth Avenue San Francisco, California 94104-2878
Los Angeles, CA 90071 Contact Person: Douglas Schwab or
Contact: M. Laurence Popofsky (415) 772-6000
Hugh Steven Wilson (213) 485-1234
McCutchen, Doyle, Brown & Enersen
Munger, Tolles & Olson 3 Embarcadero Center - 18th floor
355 South Grand Avenue - 35th floor San Francisco. California 94111-4034
Los Angeles, California 90071-1560 Contact Person: David Balabanian or
Contact Person: Dennis Kinnaird Phillip Rotner (415) 393-2000
(213) 683-9264
or John W. Spiegel (213) 683-9152 Morrison & Foerster
345 California Street
O'Melveny & Myers San Francisco, California 94104-2675
400 South Hope Street Contact Person:
Los Angeles, California 90071-2899 Melvin R. Goldman (415) 677-7311
Contact Person: Seth Aronson or Paul T. Friedman (415) 677-7444
Robert Vanderet (213) 669-6000
Orrick Herrington & Sutcliffe
Skadden, Arps, Slate, Meagher & Flom Old Federal Reserve Bank Bldg.
300 South Grand Avenue 400 Sansome Street
Suite 3400 San Francisco, California 94111
Los Angeles, California 90071 Contact Person: James A. Hughes
Contact Person: James E. Lyons or (415) 392-1122
Frank Rothman (213) 687-5000 or W. Reece Bader (415) 392-1122
Pillsbury, Madison & Sutro
P.O. Box 7880
235 Montgomery Street
San Francisco, California 94104
Contact Person: Gary H. Anderson
(415) 983-1341
PANEL COUNSEL
DISTRICT OF COLUMBIA GEORGIA
Washington Atlanta
Arnold & Porter Alston & Bird
555 Twelfth St. N.W. One Atlantic Center
Washington, DC 20004 1201 West Peachtree Street
Contact Person: Scott Schreiber Atlanta. Georgia 30309-3424
(202) 942-5672 Contact Person: Peter Q. Bassett (404) 881-7343
Mary C. Gill (404) 881-7276
Davis Polk & Wardwell
1300 I Street, NW King & Spalding
Suite 1100 191 Peachtree Street N.W.
Washington, D.C. 20005 Atlanta, Georgia 30303
Contact Person: Scott W. Muller Contact Person: Michael R. Smith or
Michael P. Carroll (202) 962-7000 Griffin Bell (404) 572-4600
Gibson, Dunn & Crutcher Long, Aldridge & Norman
1050 Connecticut Avenue, NW One Peachtree Center
Suite 900 303 Peachtree Street - Suite 5300
Washington, D.C. 20036-5306 Atlanta, Georgia 30308
Contact Person: F. Joseph Warin Contact Person: Clay C. Long (404) 527-4050
(202) 887-3609 J. Allen Maines (404) 527-8340
Mudge Rose Guthrie Alexander & Ferdon Smith, Gambrell & Russel
212 K Street, NW Suite 1800
Washington, D.C. 20037-5303 3343 Peachtree Road N.E.
Contact Person: Leonard Garment or Atlanta. Georgia 30326
I. Lewis Libby (202) 429-9355 Contact Person: David Handley (404) 264-2671
Robert C. Schwartz (404) 264-2658
Patton Boggs, LLP
2550 M Street N.W.
Suite 900 ILLINOIS
Washington, D.C. 20037 Chicago
Contact Person:
C. Allen Foster (202) 457 6320 Jenner & Block
or Charles H. Camp (202) 457-5265 One IBM Plaza
Chicago, Illinois 60611
Shearman & Sterling Contact Person: Jerold Solovy
801 Pennsylvania Avenue N.W. (312) 222-9350
Washington, D.C. 20004-2604
Contact Person: Thomas S. Martin or Kirkland & Ellis
Jonathan L Greenblatt (202) 508-8000 200 East Randolph Drive
Chicago, Illinois 60601
Willkie Farr & Gallagher Contact Person: Garrett B. Johnson
Three Lafayette Centre Robert J. Kopecky (312) 861-2000
1155 21st Street N.W.
Washington, D.C. 20036-3384
Contact Person:
Kevin B. Clark (202) 328-8000
PANEL COUNSEL
Sidley & Austin NEW YORK
One First National Plaza New York
Chicago, Illinois 60603-2003
Contact Person: Robert Downing (312) 853-7434 Cahill Gordon & Reindel
Eugene Schoon (312) 853-7279 80 Pine Street
Walter C. Carlson (312) 853-7734 New York, New York 10005
Contact Person: Charles A. Gilman
Skadden, Arps, Slate, Meagher & Flom or Thomas J. Kavaler (212) 701-3000
333 West Wacker Drive or Immanuel Kohn
Suite 2100
Chicago, Illinois 60606 Davis, Polk & Wardwell
Contact Person: Timothy Nelsen or 450 Lexington Avenue
Susan Getzendanner (312) 407-0700 New York, New York 10017
Contact Person: Henry King,
Sonnenschein Nath & Rosenthal or Dan Kolb (212) 450-4000
8000 Sears Tower
Chicago, Illinois 60606-6404
Contact Person: Harold D. Shapiro Fried Frank Harris Shriver & Jacobson
(312) 876-8035 1 New York Plaza - 27th Floor
New York, New York 10004
Contact Person: Sheldon Raab
MASSACHUSETTS (212) 820-8090
Boston
Kirkland & Ellis
Goodwin, Proctor & Hoar Citicorp Center
Exchange Place Boston, 153 East 53rd Street
Massachusetts 02109-2881 New York, New York 10022-4675
Contact Person: Don M. Kennedy Contact Person: Yosef J. Riemer or
(617) 570-1000 Frank M, Holozubiec (212) 446-4800
Hale & Dorr Milbank, Tweed, Hadley & McCloy
60 State St. 1 Chase Manhattan Plaza
Boston, Massachusetts 02109 New York, New York 10005
Jeffery Rudman (617) 742-9100 Contact Person: Russell E. Brooks
(212) 530-5554
Ropes & Gray
One International Plaza Mudge Rose Guthrie Alexander & Ferdon
Boston, Massachusetts 02110-2624 180 Maiden Lane
Contact Person: John Donovan, Jr. New York, New York 10038
(617) 951-7566 Contact Person: Kenneth Con boy,
John J. Kirby, Jr., or
Skadden, Arps, Slate, Meagher & Flom Laurence V. Senn, Jr. (212) 510-7000
1 Beacon Street
Boston, Massachusetts 02108 Shearman & Sterling
Contact Person: Thomas A. Dougherty or Citicorp Center
George J. Skelley 153 E 53rd Street
(617) 573-4800 New York, New York 10022-4676
Contact Person:
Palmer & Dodge Dennis Orr (212) 848-8000
1 Beacon Street
Boston, Massachusetts 02108
Contact Person: Peter Terris or
Peter Saparoff
(617) 573-0100
PANEL COUNSEL
Simpson Thacher & Bartlett TEXAS
425 Lexington Avenue Dallas
New York, New York 10017-3909
Contact Person: Roy L. Reardon, Akin, Gump, Strauss, Hauer & Feld, LLP.
James Hagan, or 4100 Suite
Michael J. Chepiga (212) 455-2000 1700 Pacific Avenue
Dallas, Texas 75201-4618
Contact Person: Michael Lowenberg P.C.
Skadden, Arps, Slate, Meagher & Flom or Louis P. Bickel (214) 969-2800
919 Third Avenue
New York, New York 10022 Fulbright & Jaworski
Contact Person: Barry H. Garfinkel or 2200 Ross Avenue
Jonathan Lerner (212) 735-3000 Suite 2800
Dallas, Texas 75201
Stroock & Stroock & Lavan Contact Person: Karl G. Dial
Seven Hanover Square (214) 855-8000
New York, NY 10004-2696
Contact: Locke Purnell Rain Harrell
Melvin A. Brosterman (212) 806-5400 2200 Ross Avenue
Laurence Greenwald (212) 806-5400 Suite 2200
Alvin K. Hellerstein (212) 806-5400 Dallas, TX 75201-6776
Contact Person:
Sullivan & Cromwell John McElhaney (214) 740-8458
125 Broad Street Peter Flynn (214) 740-8654
New York, New York 10004 Morris Harrell (214) 740-8404
Contact Person: John L Warden
(212) 558-4000 Thompson & Knight, P.C.
1700 Pacific Avenue
Wachtell, Lipton, Rosen & Katz Suite 3300
51 West 57th Street Dallas, TX 75201
New York, New York 10019 Contact Person:
Contact Person: Norman Redlich. Schuyler B. Marshall (214) 969-1246
(212) 371-9200
Baker & Botts, LLP.
Willkie Farr & Gallagher 2001 Ross Avenue
One Citicorp Center Dallas, Texas 75201-2916
153 East 53rd Street Contact Person:
New York, New York 10022-4677 Ronald L Palmer (214) 953-6500
Contact Person:
Michael R. Young (212) 821-8000 Haynes & Boone, LLP.
David L Foster (212) 821-8000 3100 NationsBank Plaza
Richard L Posen (212) 821-8000 901 Main Street
Dallas, Texas 75202-3789
Weil, Gotshal & Manges Contact Person: Michael Boone,
767 Fifth Avenue George Bramblett, or
New York, New York 10153 Noel Hensley (214) 651-5000
Contact Person: Dennis J. Block
(212) 310-8000
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Contact Person: Frederic W. Yerman
(212) 836-8663
PANEL COUNSEL
Houston
Vinson & Elkins
Akin, Gump, Strauss, Hauer & Feld, L.L.P. 2500 First City Tower
Pennzoil Place - South Tower 1001 Fannin
711 Louisiana Street Houston, Texas 77002-6760
Suite 1900 Contact Person: David T. Hedges Jr.
Houston, Texas 77002 (713) 758-2676
Contact Person: Charles Moore or
Paula Hinton (713) 220-5800 Baker & Botts
910 Louisiana Street
Fulbright & Jaworski, L.LP. One Shell Plaza
1301 McKinney Houston, Texas 77002-4995
Suite 5100 Contact Person:
Houston, Texas 77010-3095l William C. Slugger (713) 229-1234
Contact Person: Richard Carrell or Harold Metts (713) 229-1234
Frank Jones (713) 651-5151
NOTICE
STATE OF KENTUCKY
WARNING: "ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE
COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY
MATERIALLY FALSE INFORMATION OR CONCERNS, FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE
ACT, WHICH IS A CRIME."
ENDORSEMENT# 1
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
NUCLEAR ENERGY LIABILITY EXCLUSIONS ENDORSEMENT
(BROAD FORM)
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 or claims made
against any Insured(s):
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 Company, or
discharged or dispersed there from; 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 Company; or
(3) the furnishing by an Insured or the Company of
services, materials, parts or equipment in connection
with the planning, construction, maintenance, operation
or use of any nuclear facility; or
(4) claims for damages to the Company or its shareholders
which alleges, arises from, is based upon, is
attributed to or in any way involves, 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,
ENDORSEMENT# 1 (CONTINUED)
------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
(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 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;
"nuclear material" means source material, special nuclear
material or byproduct material;
"source material", "special nuclear material", and "byproduct
material" have the meanings given them in the Atomic Energy Act
of 1954 or in law amendatory thereof;
"spent fuel" means any fuel element or fuel component, solid or
liquid, which has been used or exposed to radiation in a nuclear
reactor;
"waste" means any waste material (1) containing byproduct
material and (2) resulting from the operation by any person or
organization of any nuclear facility included within the
definition of nuclear facility under paragraph (a) or (b)
thereof;
"nuclear facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for
(1) separating the isotopes of uranium or plutonium,
(2) processing or utilizing spent fuel, or
(3) handling, processing or packaging waste,
ENDORSEMENT# 1 (CONTINUED)
------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
(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,
(d) any structure, basin, excavation, premises or place prepared
or used for the storage or disposal of waste, and includes
the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for
such operations;
"nuclear reactor" means any apparatus designed or used to sustain
nuclear fission in a self-supporting chain reaction or to contain
a critical mass of fissionable material.
All other terms, conditions and exclusions remain unchanged.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 2
------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
COMMISSIONS 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 made against any
Insured(s) alleging, arising out of, based upon, attributable to:
(i) Payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
domestic or foreign government or armed services officials,
agents, representatives, employees or any members of their
family or any entity with which they are affiliated; or
(ii) Payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
officials, directors, agents, partners, representatives,
principal shareholders, or owners or employees, or
affiliates (as that term is defined in The Securities
Exchange Act of 1934, including any of their officers,
directors, agents, owners, partners, representatives,
principal shareholders or employees) of any customers of
the company or any members of their family or any entity
with which they are affiliated; or
(iii) Political contributions, whether domestic or foreign.
All other terms, conditions and exclusions remain unchanged.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 3 (REVISED)
------------
This endorsement, effective 12.01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby understood
and agreed that the term "Director or Officer" as stated in
Policy Form 62335 (5/95) is amended in part to include the
position of
- Administrators (all locations)
- All Corporate Directors including:
- Director of Acquisition and Development
- Director of Corporate Accounting
- Director of Finance
- Directors of Hospital Accounting
- Director of Reimbursement
- Director of Tax and Insurance
- Director of Vencare Accounting
- Assistant Administrator of Clinical Operations
(all locations)
- Assistant Administrator of Finance (Corporate)
- Assistant Administrator of Outpatient Services
(all locations)
- Medical Directors (all locations)
- Peer Review Committee (all locations)
- Regional Directors of Operations
- Manager of Investment Relations
- Director of Total Compensation
- Senior Director of Finance
- Senior Director Financial Planning
- Senior Director Management Information Services
- Senior Director Reimbursement
- Senior Director of Taxation
- Senior Director & Treasurer
- Senior Director Human Resources & Support Services
- Senior Director of Risk Management
- Senior Director Purchasing
- Senior Director Internal Audit
- Senior Director Investor Relations/Public Relations.
ENDORSEMENT# 4
--------------
This endorsement, effective 12.01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
DIRECTORS AND OFFICERS INSURANCE AND COMPANY REIMBURSEMENT POLICY
DEFINITION OF COMPANY
In consideration of the premium charged, it is hereby understood and agreed that
the term "Company" is amended, in part, to include the following entities:
The Hillhaven Foundation
It is further understood and agreed that this policy provides coverage only for
claim or claims against the Directors or Officers of each of the above listed
entities for alleged Wrongful Acts occurring on or after the date of creation or
acquisition of such entity, and otherwise covered by this policy,
All other terms and conditions of the policy remain unchanged.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ED0365
ENDORSEMENT# 5
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby understood
and agreed that Appendix A (PANEL COUNSEL FIRMS), is amended to
include the following two firms:
Heller, Ehrman, White & McAuliffe
6100 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104
Contact Person: George E. Greer
Phone: (206) 447-0900
Lane, Powell, Spears & Lubersky
1420 Fifth Avenue, Suite 4100
Seattle, WA 98101
Contact Person: James L. Robert
Phone (206) 223-7000
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 6
-------------
This endorsement, effective 12.01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
MEDICAL MALPRACTICE 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 or claims made
against the Directors or Officers alleging, arising out of, based
upon or attributable to medical or professional malpractice,
including but not limited to the rendering or failure to render
medical or professional service or treatment.
Provided, however, that the foregoing exclusion shall not be
applicable to any derivative or shareholder class action claims
against Directors or Officers alleging a failure to supervise
those who performed or failed to perform such professional
services.
All other terms and conditions and exclusions remain unchanged.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 7
------------
This endorsement, effective 12.01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
GENERAL 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 or claims made
against the Directors or Officers alleging, arising out of, based
upon or attributable to the Company's or an Insured's performance
of or failure to perform professional services for others for a
fee, or any act, error, or omission relating thereto.
Provided, however, that the foregoing exclusion shall not be
applicable to any derivative or shareholder class action claims
against Directors or Officers alleging a failure to supervise
those who performed or failed to perform such professional
services.
All other terms and conditions remain unchanged.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 8
------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
PROFESSIONAL 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 or claims made
against any Insured(s) alleging, arising out of, based upon or
attributable to the Company's or an Insured's performance of or
failure to perform professional services, or any act, error or
omission relating there to.
However, notwithstanding the foregoing, it is further understood
and agreed that this exclusion shall not apply to shareholder
actions against an Insured for failure to supervise those who
performed or failed to perform such professional services
provided that such shareholder action is instigated and continued
totally independent of, and totally without the solicitation of,
or assistance of, or active participation of, or intervention of,
any Insured or the Company.
ALL TERMS, CONDITIONS, AND EXCLUSIONS REMAIN UNCHANGED.
[SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 9
------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
REGULATORY EXCLUSION
(INSURANCE)
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 or claims made against the Directors or Officers brought directly or
indirectly by or on behalf of, or based upon, attributable to or alleging any
claim brought by or on the behalf of, any insurance regulatory agency or
supervisory authority, including but not limited to any state or local insurance
department or commission, or any state or local insurance guaranty or insolvency
fund (any of the foregoing organizations are hereinafter referred to as an
"Agency"), including any type of legal or equitable action which such Agency has
the legal right to bring as receiver, conservator, liquidator or assignee of the
Company, its security holders or its creditors, or otherwise; whether such
action or proceeding is brought in the name of such Agency, or by or on behalf
of such Agency in the name of any other entity, or solely in the name of any
third party.
All other terms and conditions remain unchanged.
[SIGNATURE ILLEGIBLE]
----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 10
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration for the premium charged, it is hereby understood
and agreed that Clause 11, CANCELLATION CLAUSE, is amended to
increase the Insurers required notice of cancellation to ninety
(90) days from sixty (60) days, except for non-payment of premium
in which case ten (10) days notice must be given.
[SIGNATURE ILLEGIBLE]
---------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 11
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
PRIOR ACTS EXCLUSION
(for listed Entity(ies)
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 or claims made
against the Insured(s) of any entity listed below for any
Wrongful Act(s) which occurred on or before such entity s
respective retroactive date listed below, and prior to the end of
the Policy Period, and otherwise covered by this policy. Loss(es)
arising out of the same related Wrongful Act(s) shall be deemed
to arise from the first such same or related Wrongful Act(s).
ENTITY RETROACTIVE DATE
Ventech Systems, Inc. December 22, 1993
Candle Subacute Services, Inc. February 4, 1994
Hillhaven Corporation September 28, 1995
All other terms, conditions and exclusions remain unchanged.
[SIGNATURE ILLEGIBLE]
----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 12
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby understood
and agreed that the Insurer shall not be liable to make payment
for loss in connection with any claim or claims including, but
not limited to, any derivative or representative class actions)
brought by or on behalf of East Ascension Parish Hospital Service
District and/or Lanoux or any of their subsidiaries, affiliates,
agents, employees or related parties against the directors and
officers alleging, arising out of, based upon or attributable to:
1. anti-trust actions;
2. medicare/medicaid fraud;
3. the Federal False Claims Act;
4. mismanagement and/or failure to manage a hospital in a
prudent matter;
5. seeking Rule 11 sanctions;
[SIGNATURE ILLEGIBLE]
---------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 13
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby
understood and agreed that:
I. Upon expiration of the policy period, the Insurer shall
renew this policy unless:
(1) during the Policy Period: (a) the Named Corporation
shall consolidate with or merge into, or sell all or
substantially all of its assets to, any person or
entity or group of persons and/or entities acting in
concert; or (b) any person or entity or group of
persons and/or entities acting in concert shall acquire
an amount of the outstanding securities representing
more than 50% of the voting power for the election of
Directors of the Named Corporation, or acquires the
voting rights of such an amount of such securities; or
(c) the Name Corporation has been adjudicated bankrupt
or insolvent or made an assignment for the benefit of
creditors, or a bankruptcy petition has been filed to
have the Named Corporation adjudicated bankrupt and the
matter is still pending at the expiration of the Policy
Period; or
(2) the Insurer has not been provided on a timely basis
with a properly completed renewal application and other
information for renewal underwriting; or
(3) this policy has been cancelled by the Named Corporation
or the Insurer as permitted or required by law and the
cancellation clause of this policy; or
(4) there has occurred a change in the law (including
insurance regulations) or insurance regulatory action
which prevents the Insurer from issuing a renewal
policy at the same terms and conditions as this policy.
II. A renewal of this policy pursuant to Section I shall be at
the same terms and conditions as this policy (except for the
inception and expiration dates of the policy period, and
with an endorsement like this one but
ENDORSEMENT# 13 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
having no requirement of adding a like endorsement to
any renewal) for one year. The premium for such
renewal shall be in accordance with Section III below.
III. The premium for a renewal of this policy pursuant to Section
I shall not exceed 110% of the greater of (i) the Pull
Annual Premium for this policy, or (ii] the Full Annual
Premium for the policy renewed by this policy; unless,
during the Policy Period, a notice of claim or notice of
circumstances which may reasonably be expected to give rise
to a claim has been given to the Insurer, in which case the
110% premium cap shall not apply. In this case, however, the
Insurer may, in its absolute discretion, agree in writing to
apply the cap notwithstanding the notice of claim or notice
of circumstances. If there has occurred a change in the law
(including insurance regulations) or insurance regulatory
action which prevents the Insurer from issuing a renewal
policy at any premium permitted by this Section III, then
all rights and obligations of all parties under this
endorsement shall terminate.
IV. Nothing in this endorsement shall be construed to affect any
rights the Insurer has to require an additional premium
and/or amendment of the provisions of this policy during the
Policy Period because of the addition of a new Subsidiary in
accordance with Section 2(1) of the policy.
V. The "Full Annual Premium" shall mean the premium level in
effect immediately prior to the end of the expiring policy
period, annualized to a full one year.
VI. The Named Corporation shall have the right, prior to
expiration of the Policy Period, to decline to have a
renewal of this policy issued by the Insurer.
[SIGNATURE ILLEGIBLE]
-------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 14
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
EMPLOYMENT PRACTICES ENDORSEMENT
COVERAGE
In consideration of the premium charged, it is hereby understood
and agreed that the coverage as is afforded by this policy is
extended to Employment Practice Claims against an individual
"Insured" (whether such Claims are brought by (i) a past, present
or prospective employee or employees, whether directly or by
class action; or (ii) by the Employee Equal Opportunity
Commission (EEOC) or any other state or federal governmental
authority regulating employment practices; or (iii) by any other
person or entity), subject to both the terms, conditions and
exclusions of this endorsement and the policy.
DEFINITIONS
It is further understood and agreed that for the purposes of this
endorsement only, the following definitions shall apply:
(1) "Employment Practice Claims" shall mean any Claim relating
to a past, present or prospective employee of the Company
for, or arising out of the following: (i) any actual or
alleged wrongful dismissal, discharge or termination (either
actual or constructive), of employment; (ii) employment-
related misrepresentation; (iii) wrongful failure to employ
or promote; (iv) wrongful deprivation of career opportunity;
(v) wrongful discipline; (vi) failure to grant tenure or
negligent employee evaluation; (vii) failure to provide
adequate employee policies and procedure; or (viii) sexual
or workplace harassment of any kind, (including the alleged
creation of a harassing workplace environment); or (ix)
unlawful discrimination, (including sexual or workplace
harassment or creation of a harassing workplace environment)
whether direct, indirect, or unintentional.
Employment Practices Claims shall include Claims brought
under state, local or federal law (whether common or
statutory) and shall include, but not be
ENDORSEMENT# 14 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
limited to, allegations of violations of the following federal
laws (as amended), including regulations promulgated thereunder:
1. Family and Medical Leave Act of 1993
2. Americans with Disabilities Act of 1992 (ADA),
3. Civil Rights Act of 1991,
4. Age Discrimination in Employment Act of 1967 (ADEA),
including the Older Workers Benefit Protection Act of 1990.
5. Title VII of the Civil Rights Law of 1964, as amended,
including the Pregnancy Discrimination Act of 1978.
6. Civil Rights Act of 1866, Section 1981, and
7. Fifth and Fourteenth Amendments of the U.S. Constitution.
(2) The term "Insured" shall include, for the purposes of Employment
Practices Claims only, any past, present or future duly elected
individual Director or Officer.
EXCLUSIONS
It is further understood and agreed that solely for the additional
coverage hereby granted for Employment Practices Claims exclusions (i)
and (k) are amended as follows:
(1) Exclusion (i) is amended by deleting the phrase, "wrongful
termination of employment claims", and substituting the phrase,
"Employment Practice Claims" (as defined in this endorsement) and
by deleting the word "former employee" and substituting the word
"employee" to read as follows:
(i) which are brought by any Insured or the Company; or which
are brought by any security holder of the Company, whether
directly or derivatively, unless such security holder's
Claim(s) is instigated and
ENDORSEMENT# 14 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
continued totally independent of, and totally without
the solicitation of, or assistance of, or active
participation of, or intervention of, any Insured or
the Company; provided, however, this exclusion shall
not apply to Employment Practice Claims brought by an
employee other than an employee who is or was a
Director of the Company.
(2) Exclusion (k) is amended by deleting the phrase, "emotional
distress", and by deleting the phrase, "or for injury from
libel or slander or defamation or disparagement or for
injury from a violation of a person's right of privacy", to
read as follows:
(k) for bodily injury, sickness, disease or death of any
person, or damage to or destruction of any tangible
property, including the loss of use thereof;
It is further understood and agreed that only as respects any
additional coverage granted by virtue of this endorsement, the
following exclusions shall apply:
(1) The Insurer shall not be liable for any Loss in connection
with any Claim or Claims made against an Insured alleging,
arising out of, based upon or attributable to any pending or
prior litigation as of September 28, 1995, or alleging or
derived from the same or essentially the same facts as
alleged in such pending or prior litigation.
(2) The Insurer shall not be liable for any Loss in connection
with any Claim or Claims made against an Insured for any
alleged Wrongful Act committed prior to
September 28, 1995 if any Insured(s), as of such date, knew
or could have reasonably foreseen that such Wrongful Act
could lead to a Claim.
ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS OF THE POLICY REMAIN
UNCHANGED.
[SIGNATURE ILLEGIBLE]
-----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 15
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part
of policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
OUTSIDE ENTITY ENDORSEMENT
(2x)
In consideration of the premium charged, it is hereby
understood and agreed that the following entities shall be
deemed an "Outside Entity", but only as respects the Outside
Entity's respective Continuity Date below:
OUTSIDE ENTITY CONTINUITY DATE
1) a not-for-profit organization September 1, 1989
under section 501(c)(3) of the
Internal Revenue Code of 1986
(as amended))
2) a not-for-profit organization September 1, 1989
other than a not-for-profit
organization listed in (1) above
(2/90) [SIGNATURE ILLEGIBLE]
------------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 16
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh. Pa.
In consideration of the premium charged, it is hereby understood
and agreed that the coverage as is afforded under this policy is
extended to Directors and Officers who were or now are at the
specific written request of Vencor, Inc a member of the
Partnership Management Committee of the Partnerships listed below
for any alleged Wrongful Acts in their respective capacities as a
member of this Partnership Management Committee.
Further, coverage as is afforded by virtue of this endorsement
shall be specifically excess of any insurance in force as
respects to the Partnership and any indemnification provided to
the Directors and Officers by the Partnership. Further, if said
other insurance in force as respects to any such Partnership is
provided by the Insurer or any member company of American
International Group, (or would be provided but for the
application of the retention amount or the exhaustion of the
Limit of Liability) then the Limit of Liability for all Loss
covered by virtue of this endorsement shall be reduced by the
Limit of Liability (as set forth on the Declarations Page) of
such other AIG insurance provided to such Partnership.
Furthermore, it is understood and agreed that coverage as is
afforded by virtue of this endorsement shall not apply to any
claim or claims for any alleged Wrongful Act, if as of the
effective date of the first Directors and Officers Liability and
Corporation Reimbursement Policy/Directors and Officers Insurance
and Company Reimbursement Policy/Directors, Officers and
Corporate Liability Insurance Policy for which coverage as is
afforded by this endorsement was granted issued by the Insurer to
the Company first named in Item 1 of the Declarations, as of such
date, knew or could have reasonably foreseen that such Wrongful
Act could lead to a claim.
It is further understood and agreed, as respects this
endorsement, that the Insurer shall not be liable for any Loss in
connection with any claim or claims made against the Directors or
Officers which are brought by or on behalf of any of the
Partnerships listed below; or which are brought by any member of
the Partnership Management Committee of any of the Partnerships
listed below; or which are brought by
ENDORSEMENT# 16 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
any security holder of the Partnerships listed below, whether
directly or derivatively, unless such claim(s) is instigated and
continued totally independent of, and totally without the
solicitation of, or assistance of, or active participation of, or
intervention of any member of the Partnership Management
Committee of any of the Partnerships listed below.
The Partnerships to which this endorsement applies is as follows:
PARTNERSHIPS
1. Pharmaceutical Infusion Therapy, a California General
Partnership, Advanced Infusion Systems has a 50.99%
interest.
2. CPS-Sacramento, a California General Partnership,
Advanced Infusion Systems has a 60% interest.
Further provided that for the purposes of the applicability of
this endorsement, the for-profit organizations listed above will
be conclusively deemed to have indemnified the Partnership
Management Committee members to the extent that the Partnerships
are permitted or required to grant such indemnification pursuant
to law, common or statutory, or contract or the Charter or the
By-laws of the Partnerships (which are deemed to adopt the
broadest provisions of the law which determines or defines such
rights of indemnity). The Partnerships hereby agree to indemnify
such persons to the fullest extent permitted by law and to no
less extent as indemnification is permitted for the Partnership's
management committee members.
[SIGNATURE ILLEGIBLE]
-----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 17
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
DIRECTORS AND OFFICERS INSURANCE AND COMPANY REIMBURSEMENT
POLICY
OUTSIDE DIRECTORSHIP EXTENSION: FOR-PROFIT
(DOUBLE EXCESS, SCHEDULED ORGANIZATIONS)
In consideration of the premium charged, it is hereby understood
and agreed that the coverage as is afforded under this policy is
extended to Directors or Officers who were, now are or hereafter
become at the specific written request of the Company a director
of the for-profit organization(s) listed below for any alleged
Wrongful Acts in their respective capacities as directors of such
for-profit organization.
Further, coverage as is afforded by virtue of this endorsement
shall be specifically excess of any insurance in force as
respects to these for-profit organizations and any
indemnification provided by these for-profit organizations.
Further, if said other insurance in force as respects to any such
for-profit organization is provided by the Insurer or any member
company of American International Group, Inc. (or would be
provided but for the application of the retention amount, the
exhaustion of the Limit of Liability or the failure to submit the
claim), then the Limit of Liability for all Loss by virtue of
this endorsement with respect of any such for-profit organization
shall be reduced by the Limit of Liability (as set forth on the
Declarations Page) of such other American International Group,
Inc. member company insurance provided to such for-profit
organization.
Furthermore, it is understood and agreed that coverage as is
afforded by virtue of this endorsement shall not apply to any
claim or claims for any alleged Wrongful Act: (i) occurring at
any time when the Insured was not sitting as a director of the
for-profit organization at the specific written request of the
Company, or (ii) for any Wrongful Act if as of the effective date
of the first Directors and Officers Liability and Corporation
Reimbursement Policy/Directors and Officers Insurance and Company
Reimbursement Policy for which coverage as is afforded by this
endorsement was granted issued by the Insurer to the Company
first named in Item 1 of the date of this policy,
ENDORSEMENT# 17 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
(or in the case of a newly appointed or elected director as of
the appointment or election date for such Insured) the
Insured(s), as of such date, knew or could have reasonably
foreseen that such Wrongful Act could lead to a claim.
The list of for-profit organization to which this endorsement
applies is as follows:
FOR-PROFIT ORGANIZATION
American X-Rays, Inc.
Evergreen Pharmaceutical, Inc.
All other terms and conditions of the policy remain unchanged.
[SIGNATURE ILLEGIBLE]
----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 18
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby understood
and agreed that the coverage as is afforded under this policy is
extended to Directors and Officers who were or now are at the
specific written request of Vencor Inc a member of the
Partnership Management Committee of the Partnerships listed below
for any alleged Wrongful Acts in their respective capacities as a
member of this Partnership Management Committee.
Further, coverage as is afforded by virtue of this endorsement
shall be specifically excess of any insurance in force as
respects to the Partnership and any indemnification provided to
the Directors and Officers by the Partnership, Further, if said
other insurance in force as respects to any such Partnership is
provided by the Insurer or any member company of American
International Group, (or would be provided but for the
application of the retention amount or the exhaustion of the
Limit of Liability) then the Limit of Liability for all Loss
covered by virtue of this endorsement shall be reduced by the
Limit of Liability (as set forth on the Declarations Page) of
such other AIG insurance provided to such Partnership.
Furthermore, it is understood and agreed that coverage as is
afforded by virtue of this endorsement shall not apply to any
claim or claims for any alleged Wrongful Act, if as of the
effective date of the first Directors and Officers Liability and
Corporation Reimbursement Policy/Directors and Officers Insurance
and Company Reimbursement Policy/Director, Officers and
Corporate Liability Insurance Policy for which coverage as is
afforded by this endorsement was granted issued by the Insurer to
the Company first named in Item 1 of the Declarations, as of such
date, knew or could have reasonably foreseen that such Wrongful
Act could lead to a claim.
It is further understood and agreed, as respects this
endorsement, that the Insurer shall not be liable for any Loss in
connection with any claim or claims made against the Directors or
Officers which are brought by or on behalf of any of the
Partnerships listed below; or which are brought by any member of
the Partnership Management Committee of any of the Partnerships
listed below; or which are brought by
ENDORSEMENT# 18 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
any security holder of the Partnerships listed below, whether
directly or derivatively, unless such claim(s) is instigated and
continued totally independent of, and totally without the
solicitation of, or assistance of, or active participation of, or
intervention of any member of the Partnership Management
Committee of any of the Partnerships listed below.
The Partnerships to which this endorsement applies is as
follows:
PARTNERSHIPS
1. Hillhaven Community Health Partnership, a Florida General
Partnership, First Healthcare Corporation, General Partner.
First Healthcare Corporation 50% interest.
2. Windsor Woods Nursing Home Partnership, a Washington General
Partnership, First Healthcare Corporation, General Partner,
First Healthcare Corporation 50% interest.
3. St. George Nursing Home Limited Partnership, an Oregon
Limited Partnership, Hillhaven Properties, Ltd., General
Partner, First Healthcare Corporation, a Limited Partner.
Hillhaven Properties, Ltd. owns 96% of the general partners'
interest, and First Healthcare Corporation owns 7.5% of the
limited partners' interest.
4. Bartlesville Nursing Home Partnership, an Oregon General
Partnership, First Healthcare Corporation, General Partner.
First Healthcare Corporation has 50% interest.
5. Carrollwood Care Center, a Florida General Partnership,
First Healthcare Corporation, General Partner. First
Healthcare Corporation has 50% interest.
6. Foothill Nursing Company Partnership, a California General
Partnership, First Healthcare Corporation, General Partner.
First Healthcare Corporation has 50% interest.
ENDORSEMENT# 18 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
7. San Marcos Nursing Home Partnership, a California General
Partnership, First Healthcare Corporation General Partner.
First Healthcare Corporation has 50% interest.
8. Fox Hill Village Partnership, a Massachusetts General
Partnership, Brim of Massachusetts, Inc. General Partner.
Brim of Massachusetts, Inc. has 50% interest.
9. Starr Farm Partnership, a Vermont General Partnership, First
Healthcare Corporation, General Partner. First Healthcare
Corporation has a 50% interest.
10. New Pond Village Associates, a Massachusetts General
Partnership, First Healthcare Corporation, General Partner.
First Healthcare Corporation purchase its partners interest
and now has 100% interest. The Partnership may be dissolved
in the future unless marketing reasons dictate otherwise.
11. Tuscon Retirement Center Limited, an Oregon Limited
Partnership, Hillhaven Properties, Ltd., General and Limited
Partner.
12. San Marcos Retirement Village, a California General Partner,
Hillhaven Properties, Ltd. General Partner. Hillhaven
Properties, Ltd. has a 35% interest.
13. Castle Gardens Retirement Center Limited Partnership, an
Oregon Limited Partnership, Hillhaven Properties, sole
General Partner, First Healthcare Corporation, sole Limited
Partner.
14. Lantana Partners, Ltd. a Florida Limited Partnership,
Hillhaven Properties, Ltd. and Twenty-Nine Hundred
Associates, Ltd. are sole General Partners.
15. Woodhaven Partners, Ltd. a Florida Limited Partnership,
Hillhaven Properties, Ltd. the General Partner and sole
Limited Partner. Hillhaven Properties, Ltd. has 50% interest
in the general partnership.
16. Hillcrest Retirement Center, Ltd., an Oregon Limited
Partnerships, Fairview Living Centers, Inc. sole General
ENDORSEMENT# 18 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
Partner, and has acquired eight limited partnership
interests out of 41.
17. Topeka Retirement Center, Ltd., a Kansas Limited
Partnerships, Hillhaven Properties, Ltd. the General
Partner. Hillhaven Properties, Ltd., has 90% interest.
18. Meridian Manor, a Louisiana General Partnerships, Hillhaven
Properties, Ltd. and First Healthcare Corporation are equal
General Partners.
19. Sandy Retirement Center Limited Partnerships, an Oregon
Limited Partnership, Hillhaven Properties, Ltd., sole
General Partner, first Healthcare Corporation, sole Limited
Partner.
20. Mayfair Retirement Center Limited Partnership, an Oregon
Limited Partnerships, Hillhaven Properties, Ltd. sole
General Partner, appears to own 1% interest.
21. Hillhaven-MSC Partnerships, a California General
Partnerships, First Healthcare Corporation, General Partner.
first Healthcare Corporation has 50% interest.
22. Stockton Health Care Center Limited Partnerships, an Oregon
Limited Partnerships, First Healthcare Corporation, is sole
General Partner and owns 1%.
23. Twenty-Nine Hundred Associates, Ltd., a Florida Limited
Partnerships, Twenty-Nine Hundred Corporation, is the sole
General Partner and Hillhaven Properties, Ltd., is the sole
Limited Partner.
24. Medisave Pharmacies Partnerships, d.b.a. HealthCare Network,
a California General Partnership, Medisave Pharmacies, Inc.
has 74% interest.
25. Medisave - CSSI Partnerships, a Florida General
Partnerships, Medisave of Florida, Inc. has a 51% interest.
26. VNA/CPS Pharmaceutical Services, a California General
Partnerships, Advanced Infusion Systems has a 46.2875%
interest.
[SIGNATURE ILLEGIBLE]
---------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 19
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
In consideration of the premium charged, it is hereby understood
and agreed that the coverage as is afforded under this policy is
extended to Directors and Officers who were or now are at the
specific written request of Vencor, Inc. a member of the
Partnership Management Committee of the Partnership listed below
for any alleged Wrongful Acts in their respective capacities as a
member of this Partnership Management Committee.
Further, coverage as is afforded by virtue of this endorsement
shall be specifically excess of any insurance in force as
respects to the Partnership and any indemnification provided to
the Directors and Officers by the Partnership. Further, if said
other insurance in force as respects to any such Partnerships is
provided by the Insurer or any member company of American
International Group, (or would be provided but for the
application of the retention amount or the exhaustion of the
Limit of Liability) then the Limit of Liability for all Loss
covered by virtue of this endorsement shall be reduced by the
Limit of Liability (as set forth on the Declarations Page) of
such other AIG insurance provided to such Partnership.
Furthermore, it is understood and agreed that coverage as is
afforded by virtue of this endorsement shall not apply to any
claim or claims for any alleged Wrongful Act if, as of the
effective date of the first Directors and Officers Liability and
Corporation Reimbursement Policy/Directors and Officers Insurance
and Company Reimbursement Policy/Directors, Officers and
Corporate Liability Insurance Policy for which coverage as is
afforded by this endorsement was granted issued by the Insurer to
the Company first named in Item 1 of the Declarations, the
Insured(s), as of such date, knew or could have reasonably
foreseen that such Wrongful Act could lead to a claim.
It is further understood and agreed, as respects this
endorsement, that the Insurer shall not be liable for any Loss in
connection with any claim or claims made against the Directors or
Officers which are brought by or on behalf of any of the
Partnerships listed below; or which are brought by any member of
the Partnership Management Committee of any
ENDORSEMENT# 19 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
of the Partnerships listed below; or which are brought by any
security holder of the Partnerships listed below, whether
directly or derivatively, unless such claim(s) is instigated and
continued totally independent of, and totally without the
solicitation of, or assistance of, or active participation of, or
intervention of any member of the Partnership Management
Committee of any of the Partnerships listed below.
The Partnerships to which this endorsement applies are as
follows:
1. California Respiratory Care Partnership, a California
General Partnership, Advanced Infusion Systems has a 51%
interest.
2. Visiting Nurse Advanced Infusion Systems - Colton, a
California General Partnerships, Advanced Infusion Systems
has a 51% interest.
3. Evergreen Woods, Ltd. Nationwide Care, Inc. has a 99%
interest and First Healthcare Corporation has a 1%
interest.
Furthermore, it is understood and agreed that coverage as is
afforded by virtue of this endorsement shall not apply to any
claim or claims for any alleged Wrongful Act alleging, arising
out of, based upon or attributable to any pending or prior
litigation, as of the effective date of the first Directors and
Officers Liability and Corporation Reimbursement Policy/Directors
and Officers Insurance and Company Reimbursement
Policy/Directors, Officers and Corporate Liability Insurance
Policy for which coverage as is afforded by this endorsement was
granted issued by the Insurer to the Company first named in Item
1 of the Declarations, or alleging or derived from the same or
essentially the same facts as alleged in such pending or prior
litigation.
ENDORSEMENT# 19 (Continued)
-------------
This endorsement, effective 12:01 AM, September 28, 1995 forms a part of
policy number 445-86-62
issued to VENCOR INC
by National Union Fire Insurance Company of Pittsburgh, Pa.
Further, provided that for the purposes of the applicability of
this endorsement, the for-profit organizations listed above will
be conclusively deemed to have indemnified the Partnership
Management Committee members to the extent that the Partnerships
are permitted or required to grant such indemnification pursuant
to law, common or statutory, or contract or the Charter or By-
laws of the Partnerships (which are deemed to adopt the broadest
provisions of the law which determines or defines such rights of
indemnity), the Partnerships hereby agree to indemnify such
persons to the fullest extent permitted by law and to no less
extent as indemnification is permitted for the Partnership's
management committee members.
[SIGNATURE ILLEGIBLE]
-----------------------------
AUTHORIZED REPRESENTATIVE
ENDORSEMENT #20
THIS ENDORSEMENT, EFFECTIVE 12:01 AM SEPTEMBER 28, 1995 FORMS A PART OF
POLICY NUMBER 445-86-62
ISSUED TO VENCOR, INC.
BY NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA
In consideration of the return premium of $5,025, it is hereby understood and
agreed that Item 7, of the DECLARATIONS page, PREMIUM, is amended to read:
7. PREMIUM: $329,975 + $5,025 KY Surcharge
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
[SIGNATURE ILLEGIBLE]
-----------------------------
Authorized Representative
ENDORSEMENT #21
This endorsement, effective 12:01 AM September 29, 1995 forms a part of
policy number 445-86-62
issued to VENCOR, INC,
by National Union Fire Insurance Company of Pittsburgh, PA
In consideration of the premium charged, it is hereby understood and
agreed That Endorsement #9 is deleted in its entirety.
All other terms, conditions and exclusions remain unchanged.
[SIGNATURE ILLEGIBLE]
---------------------------
AUTHORIZED REPRESENTATIVE
IMPORTANT NOTE: THIS IS CLAIMS MADE COVERAGE PLEASE READ THIS POLICY
CAREFULLY
THIS POLICY, SUBJECT TO THE DECLARATIONS, INSURING AGREEMENTS, TERMS,
CONDITIONS LIMITATIONS AND AMENDMENTS, APPLIES ONLY TO CLAIM OR CLAIMS
THAT ARE FIRST MADE AGAINST THE INSURED(S) AND REPORTED TO THE INSURER
DURING THE POLICY PERIOD OR DISCOVERY PERIOD (IF APPLICABLE).
THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL
BE REDUCED AND MAY BE EXHAUSTED BY AMOUNTS INCURRED FOR DEFENSE COSTS
CHARGES AND EXPENSES (THE RETENTIONS) APPLYIES TO DEFENSIVE COSTS
CHARGES AND EXPENSES
-------------------------------------ST. PAUL MERCURY------------------
INSURANCE COMPANY
EXCESS DIRECTORS AND OFFICERS LIABILITY AND CORPORATE INDEMNIFICATION
POLICY
DECLARATIONS St. Paul, Minnesota 55102
A Capital Stock Company
Herein Called the Insurer
-----------------------------------------------------------------------
ITEM 1. NAMED INSURED: The Directors and Officers of
VENCOR, INC.
ITEM 2. ADDRESS (No., Street, City, State and Zip Code)
3300 Capital Holding Center
400 West Market Street, Suite 3300
Louisville, KY 40202
ITEM 3. POLICY PERIOD
From To
9-28-95 9-28-96 (12:01 A.M. Standard Time at the address stated in Item 2.)
---------------------------------------------------
ITEM 4. LIMIT OF LIABILITY $ 10,000,000 each POLICY PERIOD in excess of Item 7(E). The limit of liability available
------------------
to pay judgments or settlements shall be reduced and may be exhausted by amounts incurred for legal defense costs,
charges and expense.
ITEM 5. RETENTIONS (Applicable to Section 2(B)(2))
$ 200,000 Corporate Indemnification Each Loss
-----------------
$ -0- Each Insured Each Loss
-----------------
$ -0- Aggregate All Insureds Each Loss
-----------------
ITEM 6. PREMIUM $70,000. (inclusive of Municipal Tax: $3,784. and State Surcharge: $978.)
-----------------------
ITEM 7. SCHEDULE OF UNDERLYING INSURER(S)
(A) 1. Underlying Insurer: National Union Fire Insurance Company of Pittsburgh, Pa.
2. Policy Number: 445 86 62
3. Policy Period: From: 9-28-95 To 9-28-96
4. Limit of Liability: $20,000,000.
5. Retentions:
$200,000. Corporate Indemnification Each Loss
-------------------------
$ -0- Each Insured Each Loss
-------------------------
$ -0- Aggregate All Insureds Each Loss
-------------------------
(B) 1. Underlying Insurer: Not Applicable
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(C) 1. Underlying Insurer: Not Applicable
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(D) 1. Underlying Insurer: Not Applicable
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(E) Total amount of Underlying Limit of Liability $ 20,000,000. and any retentions or deductibles as
---------------------
applicable under the policy(ies) as stated in this Item 7.
ITEM 8. SUBJECT TO THE TERMS, CONDITIONS AND LIMITATIONS OF THIS POLICY AS HEREINAFTER PROVIDED, THIS POLICY FOLLOWS THE
FORM OF:
Insurer's Name: National Union Fire Insurance Company of Pittsburgh, Pa.
Policy Number: 445 86 62
ITEM 9. FORMS ATTACHED (a) St. Paul Mercury Excess Insurance Company Policy, Form #50408.
(b) Endorsements one through three.
SIGNATURE ILLEGIBLE
---------------------------------------- --------------------------------- --------------------------------
Authorized representative Countersignature Date Countersigned At
[LOGO OF THE ST PAUL APPEARS HERE]
INSURING CLAUSE
consideration of the payment of the premium, in reliance upon the statements
made to the Insurer by application including its attachments, a copy of which is
attached to and forms a part of this policy, and any material submitted
therewith (which shall be retained on file by the Insurer and be deemed attached
hereto), and except as hereinafter otherwise provided or amended, this policy is
subject to the same Insuring Agreement(s), Terms, Conditions and Limitations as
provided by the policy stated in Item 8 of the Declarations and any amendments
thereto, provided:
A. 1. the Insurer has received prior written notice from the Insured(s) of
any amendments to the policy stated in Item 8 of the Declarations, and
2. the Insurer has given to the Insured(s) its written consent to any
amendments to the policy stated in Item 8 of the Declarations, and
3. the Insured has paid any required additional premium.
B. This policy is not subject to the same premium or the amount and Limit of
Liability of the policy stated in Item 8 of the Declarations.
TERMS, CONDITIONS AND LIMITATIONS
SECTION 1. UNDERLYING INSURANCE
A. It is a condition precedent to the Insured(s) rights under this policy that
the Insured(s) notify the Insurer, as soon as practicable in writing, of a
failure to maintain in full force and effect, except as provided for under
Section 2(B), and without alteration of any Terms, Conditions, Limit of
Liability or Retentions, any of the underlying insurance policies as stated
in Item 7 of the Declarations.
Failure to maintain, as set forth above, any of the underlying insurance
policies as stated in Item 7 of the Declarations, except as provided for
under Section 2(B), shall not invalidate this policy, but the liability of
the Insurer for loss under this policy shall apply only to the same extent
it would have been liable had the underlying insurance policies been
maintained as set forth above. In no event shall the Insurer be liable to
pay loss under this policy until the total amount of the Underlying Limit
of Liability, as stated in Item 7(E) of the Declarations, has been paid
solely by reason of the payment of loss.
SECTION 2. LIMIT OF LIABILITY
A. The Insurer shall only be liable to make payment under this policy after
the total amount of the Underlying Limit of Liability as stated in Item
7(E) of the Declarations has been paid solely by reason of the payment of
loss.
B. In the event of the reduction or exhaustion of the total amount of the
Underlying Limit of Liability as stated in Item 7(E) of the Declarations
solely by reason of the payment of loss, this policy shall:
1. in the event of such reduction pay excess of the reduced amount of the
Underlying Limit of Liability but not to exceed the amount stated in
Item 4 of the Declarations, or
2. in the event of exhaustion continue in force provided always that this
policy shall only pay the excess over the Retention amount stated in
Item 5 of the Declarations as respects each and every loss hereunder,
but not to exceed the amount stated in Item 4 of the Declarations.
C. The Insurers' liability for loss subject to paragraphs (A) and (B) above
shall be the amount stated in Item 4 of the Declarations which shall be the
maximum liability of the Insurer in the Policy Period stated in Item 3 of
the Declarations. The Limit of Liability of the Insurer for the Discovery
Period, if elected, shall be part of, and not in addition to, the Limit of
Liability as stated in Item 4 of the Declarations.
3
SECTION 3. LOSS PROVISIONS
The Insured(s) shall as a condition precedent to the right to be indemnified
under this policy give to the Insurer notice in writing, as soon as practicable
and during the Policy Period or during the Discovery Period, if effective, of a
claim made against the Insured(s).
SECTION 4. NOTICE
Notice hereunder shall be given to St. Paul Mercury Insurance Company, 385
Washington Street, St. Paul. MN 55102.
SECTION 5. CANCELLATION
This policy may be cancelled by the Corporation at any time by mailing written
notice to the Insurer at the address shown in Section 4 stating when thereafter
such cancellation shall be effective or by surrender of this policy to the
Insurer or its authorized agent. This policy may also be cancelled by or on
behalf of the Insurer by delivering to the Corporation or by mailing to the
Corporation by registered, certified, or other first class mail, at the
Corporation's address as shown in Item 2 of the Declarations, written notice
stating when, not less than sixty (60) 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.
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.
SECTION 6. DISCOVERY PERIOD
If the Insurer shall cancel or refuse to renew (refusal to renew is hereafter
referred to as non-renewal) this policy, the Corporation or the Insureds shall
have the right, upon payment of the additional premium of 75% of the premium
hereunder, to an extension of the cover granted by this policy to report any
claim or claims in accordance with Section 3, which claim or claims are made
against the Insureds during the period of twelve (12) months after the effective
date of cancellation or non-renewal, herein called the Discovery Period, but
only for any Wrongful Act committed before the effective date of such
cancellation or non-renewal and otherwise covered by this policy.
This right shall terminate, however, unless the Corporation or the Insureds
provide written notice of such election together with the payment of the
additional premium due and this is received by the Insurer at the address shown
in Section 4 within ten (10) days after the effective date of cancellation or
non-renewal.
Discovery Period wherever used in this policy shall also mean optional extension
period or extended reporting period as defined by the policy stated in Item 8 of
the Declarations.
The offer by the Insurer of renewal terms, conditions, limits of liability
and/or premiums different from those of the expiring policy shall not constitute
non-renewal.
The provisions of this Section 6 and the rights granted herein to the
Corporation or the Insureds shall not apply to any cancellation resulting from
non-payment of premium.
SECTION 7. NUCLEAR ENERGY LIABILITY EXCLUSION
It is agreed that:
A. This policy does not apply:
1. Under any Liability Coverage, to bodily injury or property damage
4
a. with respect to which an Insured under this policy is also an
Insured under a nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy
Liability Underwriters or Nuclear Insurance Association of Canada,
or would be an Insured under any such policy but for its
termination upon exhaustion of its limit of liability; or
b. resulting from the hazardous properties of nuclear material and
with respect to which (1) any person or organization is required to
maintain financial protection pursuant to the Atomic Energy Act of
1954, or any law amendatory thereof, or (2) the Insured is, or had
this policy not been issued would be, entitled to indemnity from
the United States of America, or an agency thereof, under any
agreement entered into by the United States of America, or any
agency thereof with any person or organization.
2. Under any Medical Payments coverage, or under any Supplementary
Payments provision relating to first aid, to expenses incurred with
respects to bodily injury resulting from the hazardous properties of
nuclear material and arising out of the operation of a nuclear facility
by any person or organization.
3. Under any Liability Coverage, to bodily injury or property damage
resulting from the hazardous properties of nuclear material, if
a. the nuclear material (l) is at any nuclear facility owned by, or
operated by or on behalf of an Insured or (2) has been discharged
or dispersed therefrom;
b. the nuclear material is contained in spent fuel or waste at any
time possessed, handled, used, processed, stored, transported or
disposed of by or on behalf of an Insured, or
c. the bodily injury or property damage arises out of the furnishing
by an Insured of services, materials, parts or equipment in
connection with the planning, construction, maintenance, operation
or use of any nuclear facility, but if such facility is located
within the United States of America, its territories or possessions
or Canada, this exclusion (c) applies only to property damage to
such nuclear facility and any property thereat.
As used in this exclusion:
"hazardous properties" include radioactive, toxic or explosive properties;
"nuclear material" means source material, special nuclear material or
by-product material;
"source material," "special nuclear material," and by-product 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 (l) 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
(l) or (2) thereof;
"nuclear facility" means
(1) any nuclear reactor,
(2) any equipment or device designed or used for (1) separating the
isotopes of uranium or plutonium, (2) processing or utilizing spent fuel,
or (3) handling, processing or packaging waste,
(3) 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 and 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,
(4) 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, and operations conducted on such site and all
premises used for such operations;
5
"nuclear reactor" means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain critical mass of
fissionable material, "property damage" includes all forms of radioactive
contamination of property.
SECTION 8. ACTION AGAINST THE INSURER
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, nor until the amount of the Corporation's obligation to pay and/or the
Insureds' obligation to pay have been finally determined either by judgment
against the Insureds after actual trial or by written agreement of the
Corporation and/or the Insureds, 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 the Corporation and/or Insureds to determine the
Insureds' liability, nor shall the Insurer be impleaded by the Corporation
and/or Insureds or their legal representatives. Bankruptcy or insolvency of the
Corporation or the Corporation's estate, or bankruptcy or insolvency of the
Insureds or the Insureds' estate shall not relieve the Insurer of any of its
obligations hereunder.
IN WITNESS WHEREOF, the Insurer designated on the Declarations page has caused
this policy to be signed by its President and Secretary and countersigned on the
Declarations page by a duly authorized representative of the Insurer.
SIGNATURE ILLEGIBLE SIGNATURE ILLEGIBLE
Secretary President
6
[LOGO OF THE ST PAUL APPEARS HERE]
ENDORSEMENT #3
The following spaces preceded by an asterisk (*) need not be completed if this
endorsement and the policy have the same inception date.
- --------------------------------------------------------------------------------
ATTACHED TO AND FORMING *EFFECTIVE DATE OF *ISSUED TO
PART OF POLICY NO. ENDORSEMENT
900DX0158
- --------------------------------------------------------------------------------
SCHEDULED ATTACHMENTS TO POLICY ENDORSEMENT
In consideration of the premium charged, it is hereby understood and agreed that
the Insurer has relied upon the material listed in the following schedule. It is
further understood and agreed that the material listed below is attached to and
forms a part of the policy.
-SCHEDULE-
1) Warranty Letter signed by W. Bruce Lunsford, President and Chief Executive
Officer, dated September 28, 1995.
2) Copy of the Joint Proxy Statement dated August 11, 1995.
3) 1994 Vencor, Inc. Annual Report.
4) 1994 Vencor, Inc. form 10-k.
5) 1995 Vencor, Inc. form 10-Q.
6) List of Subsidiaries.
and that this aforementioned material shall be retained on file by the Insurer
and be deemed attached hereto and made a part of this application and policy by
reference.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned policy, other than as above stated.
In Witness Whereof, the Company has caused this
*Agency Name and Address endorsement to be signed by a duly authorized
representative of the Company.
-----------------------------------------------
Authorized Representative
[LOGO OF THE ST PAUL APPEARS HERE]
ENDORSEMENT #2
The following spaces preceded by an asterisk (*) need not be completed if this
endorsement and the policy have the same inception date.
- --------------------------------------------------------------------------------
ATTACHED TO AND FORMING *EFFECTIVE DATE OF *ISSUED TO
PART OF POLICY NO. ENDORSEMENT
900DX0158
- --------------------------------------------------------------------------------
In consideration of the premium charged, it is hereby understood and
agreed that this policy does not follow form with Endorsement #13 of the
policy referenced in Item 8 of the Declarations and that this endorsement
is deleted in its entirety.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned policy, other than as above stated.
In Witness Whereof, the Company has caused this
*Agency Name and Address endorsement to be signed by a duly authorized
representative of the Company.
-----------------------------------------------
Authorized Representative
[LOGO OF THE ST PAUL APPEARS HERE]
ENDORSEMENT #1
The following spaces preceded by an asterisk (*) need not be completed if this
endorsement and the policy have the same inception date.
- --------------------------------------------------------------------------------
ATTACHED TO AND FORMING *EFFECTIVE DATE OF *ISSUED TO
PART OF POLICY NO. ENDORSEMENT
900DX0158
- --------------------------------------------------------------------------------
PRIOR AND PENDING LITIGATION EXCLUSION
M1150 Ed. 3-90
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 or claims made against the Insured(s) arising from any prior or
pending litigation as of 9-28-95, as well as all future claims or litigation
based upon the pending or prior litigation or derived from the same or
essentially the same facts (actual or alleged) that gave rise to the prior or
pending litigation.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned policy, other than as above stated.
In Witness Whereof, the Company has caused this
*Agency Name and Address endorsement to be signed by a duly authorized
representative of the Company.
-----------------------------------------------
Authorized Representative