Common use of Changes in Exposure Clause in Contracts

Changes in Exposure. (1) If, during the Policy Period, any of the following transactions or events (each a “Change in Control”) occurs with respect to the Named Corporation: (a) the Named Corporation merges into or consolidates with another entity such that the (b) another entity, person or group of entities and/or persons acting in concert acquires securities or voting rights which result in ownership or voting control by the other entity(ies) or person(s) of more than 50% of the outstanding securities representing the present right to vote for election of the Named Corporation’s directors (or the legal equivalent thereof), then the premium for this Policy will be fully earned and coverage will continue until the end of the Policy Period, but only with respect to Wrongful Acts committed or allegedly committed, and Cyber Events that first occurred, before the effective time of such Change in Control. Coverage shall cease with respect to any Wrongful Act committed or allegedly committed, and any Cyber Event first occurring, after the effective time of such Change in Control. (2) If, during the Policy Period, an entity ceases to be a Subsidiary (a “Change in Control”), then coverage as to such entity will continue until the end of the Policy Period, but only with respect to Wrongful Acts committed or allegedly committed, and Cyber Events that first occurred, before the effective time of such Change in Control. Coverage as to such Subsidiary shall cease with respect to any Wrongful Act committed or allegedly committed, and any Cyber Event first occurring, after the effective time of such Change in Control. (3) If, during the Policy Period, the Company creates or acquires an entity as described in Subsection (2) of DEFINITION (EE) (a “New Entity”) and at the effective time of such transaction, the New Entity’s assets and/or liabilities exceed 10% of the total assets and/or liabilities of the Company as reflected in the Company’s most recent audited consolidated financial statements, then the New Entity will be deemed a Subsidiary under this Policy for a period of 60 days following the effective time of such transaction, but only with respect to Wrongful Acts committed or allegedly committed, and Cyber Events first occurring, after the effective time of such transaction. The New Entity will not be deemed a Subsidiary beyond such 60-day period and coverage shall cease unless the Insurer has received written notice containing full details of such transaction and has agreed to provide coverage beyond such 60- day period with respect to such New Entity.