INSURANCE AGREEMENT
This Insurance Agreement (the "AGREEMENT") is made and entered into as of
this 11th day of December, 1996, by and among Tenneco Inc., a Delaware
corporation ("TENNECO"), New Tenneco Inc., a Delaware corporation ("INDUSTRIAL
COMPANY"), and Newport News Shipbuilding Inc., a Delaware corporation
("SHIPBUILDING COMPANY").
WHEREAS, Tenneco, Industrial Company and Shipbuilding Company have entered
into that certain Distribution Agreement, dated as of November 1, 1996 (the
"DISTRIBUTION AGREEMENT"), pursuant to which (i) Tenneco and its Subsidiaries
shall cause to be consummated the Corporate Restructuring Transactions in
order to restructure, divide and separate their existing businesses and assets
so that (a) the Industrial Assets and Industrial Business shall be owned,
controlled and operated, directly or indirectly, by the Industrial Company,
and (b) the Shipbuilding Assets and Shipbuilding Business shall be owned,
controlled and operated, directly or indirectly, by the Shipbuilding Company,
and (ii) Tenneco shall distribute (the "Distributions") on the Distribution
Date all of the outstanding capital stock of Industrial Company and
Shipbuilding Company as a dividend to the holders of shares of the common
stock, par value $5.00 per share, of Tenneco upon the terms and subject to the
conditions set forth in the Distribution Agreement;
WHEREAS, Tenneco, its Subsidiaries and their respective predecessors have
historically maintained various Policies for the benefit or protection of one
or more of the Energy Covered Persons, Industrial Covered Persons and
Shipbuilding Covered Persons;
WHEREAS, in connection with the transactions contemplated by the
Distribution Agreement, Tenneco, Industrial Company and Shipbuilding Company
have determined that it is necessary and desirable to provide for the
respective continuing rights and obligations in respect of said Policies from
and after the Distribution Date; and
WHEREAS, pursuant to the Distribution Agreement the parties hereto have
agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and the Distribution Agreement, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 General. Unless otherwise defined herein or unless the context otherwise
requires, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined).
"AGREEMENT" shall mean this Insurance Agreement, dated as of December 11,
1996, by and among Tenneco, Industrial Company and Shipbuilding Company,
including any amendments hereto and each Schedule attached hereto.
"CLAIMS ADMINISTRATION" shall mean, with respect to any Policy, the
processing of claims made under such Policy, including, without limitation,
the reporting of losses or claims to insurance carriers and the management,
defense and settlement of claims.
"CLAIMS DEPOSIT" shall mean the amount of funds, as of the Distribution
Date, maintained by Tenneco on deposit for the benefit of the insurance
carriers under the Retained Policies.
"CLAIMS-MADE" shall mean, with respect to any Policy, coverage provided by
such Policy for claims made during a period specified therein.
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"CLAIMS-MADE POLICIES" shall mean those current and past Policies which are
Claims-Made in nature, including but not limited to those Policies identified
on SCHEDULE A hereto, which show Tenneco or any of its predecessors (or such
entity and its subsidiaries and/or affiliates) as the named insured, but
excluding (i) any directors' and officers' liability insurance policies which
are or were maintained by or on behalf of Tenneco, (ii) the Exclusive
Policies, and (iii) the Retained Policies.
"COMMON POLICIES" shall mean the Claims-Made Policies, Occurrence-Based
Policies, Eastern Policies and Retained Policies.
"CONSENT" shall have the meaning set forth in Section 2.3 hereof.
"CORPORATE RESTRUCTURING TRANSACTIONS" shall have the meaning set forth in
the Distribution Agreement.
"COVERED PERSONS" shall mean (i) with respect to Tenneco, the Energy Covered
Persons, (ii) with respect to Industrial Company, the Industrial Covered
Persons, and (iii) with respect to Shipbuilding Company, the Shipbuilding
Covered Persons.
"CURRENT CLAIMS-MADE POLICIES" shall mean the Claims-Made Policies in effect
as of the Distribution Date, which Policies are set forth on SCHEDULE A
hereto.
"CURRENT OCCURRENCE-BASED POLICIES" shall mean the Occurrence-Based Policies
in effect as of the Distribution Date, which Policies are set forth on
SCHEDULE B hereto.
"DISTRIBUTION AGREEMENT" shall mean that certain Distribution Agreement,
dated as of November 1, 1996, by and among Tenneco, Industrial Company and
Shipbuilding Company, including any amendments, exhibits and schedules
thereto.
"DISTRIBUTION DATE" shall have the meaning set forth in the Distribution
Agreement.
"DISTRIBUTION TIME" shall mean the time at which the Distributions become
effective.
"EASTERN POLICIES" shall mean the Policies identified on SCHEDULE C hereto,
which Policies show a member of the Energy Group as the named insured,
together with any predecessor policies thereto.
"ENERGY" shall mean, when unqualified, the Energy Assets, Energy Liabilities
and/or Energy Business.
"ENERGY ASSETS" shall have the meaning set forth in the Distribution
Agreement.
"ENERGY BUSINESS" shall have the meaning set forth in the Distribution
Agreement.
"ENERGY COVERED PERSON" shall mean each member of the Energy Group and any
other Person, in each case to the extent any Policy addressed herein purports
to provide insurance coverage in respect of any claims, suits, actions,
proceedings, injuries, losses, liabilities, occurrences, damages or expenses
incurred by such Person arising out of, in connection with or otherwise
related to Energy.
"ENERGY GROUP" shall have the meaning set forth in the Distribution
Agreement.
"ENERGY LIABILITIES" shall have the meaning set forth in the Distribution
Agreement.
"EXCLUSIVE POLICIES" shall mean the Tenneco Exclusive Policies, Industrial
Exclusive Policies and Shipbuilding Exclusive Policies.
"GROUP" shall have the meaning set forth in the Distribution Agreement.
"INDUSTRIAL" shall mean, when unqualified, the Industrial Assets, Industrial
Liabilities, Prior Industrial Businesses and/or Industrial Business.
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"INDUSTRIAL ASSETS" shall have the meaning set forth in the Distribution
Agreement.
"INDUSTRIAL BUSINESS" shall have the meaning set forth in the Distribution
Agreement.
"INDUSTRIAL COVERED PERSON" shall mean each member of the Industrial Group
and any other Person, in each case to the extent any Policy addressed herein
purports to provide insurance coverage in respect of any claims, suits,
actions, proceedings, injuries, losses, liabilities, occurrences, damages or
expenses incurred by such Person arising out of, in connection with or
otherwise related to Industrial.
"INDUSTRIAL EXCLUSIVE POLICIES" shall mean all current and past Policies
which show Industrial Company, any other member of the Industrial Group or any
of their respective predecessors (or such entity and its subsidiaries and/or
affiliates) as the named insured and do not purport to relate to Energy or
Shipbuilding or to cover any Energy Covered Person or Shipbuilding Covered
Person, but excluding any Retained Policy.
"INDUSTRIAL GROUP" shall have the meaning set forth in the Distribution
Agreement.
"INDUSTRIAL LIABILITIES" shall have the meaning set forth in the
Distribution Agreement.
"INSURANCE ADMINISTRATION" shall mean, with respect to any Policy, the
accounting for premiums, defense costs, indemnity payments, deductibles and
retentions, as appropriate, under the terms and conditions of such Policy, and
the distribution of Insurance Proceeds.
"INSURANCE PROCEEDS" shall mean those monies, net of any applicable premium
adjustment, deductible, retention or similar cost paid or held by or for the
benefit of an insured party which are either (i) received by an insured from
an insurance carrier, or (ii) paid by an insurance carrier on behalf of an
insured.
"LETTERS OF CREDIT" shall have the meaning set forth in Section 7.1 hereof.
"MERGER" shall have the meaning set forth in the Distribution Agreement.
"MERGER AGREEMENT" shall have the meaning set forth in the Distribution
Agreement.
"MERGER TIME" shall mean the time at which the Merger becomes effective.
"OCCURRENCE-BASED" shall mean, with respect to any Policy, coverage provided
by such Policy for acts, omissions, damages or injuries which occur or are
alleged to have occurred during a period specified in such Policy.
"OCCURRENCE-BASED POLICIES" shall mean those current and past Policies which
are Occurrence-Based in nature, including but not limited to those policies
identified on SCHEDULE B hereto, which show Tenneco or any of its predecessors
(or such entity and its subsidiaries and/or affiliates) as the named insured,
but excluding (i) any directors' and officers' liability policies which are or
were maintained by or on behalf of Tenneco, (ii) the Exclusive Policies, (iii)
the Retained Policies, and (iv) the Eastern Policies.
"OTHER CLAIMS-MADE POLICIES" shall mean the Claims-Made Policies other than
the Transferred Claims-Made Policies.
"OTHER OCCURRENCE-BASED POLICIES" shall mean the Occurrence-Based Policies
other than the Transferred Occurrence-Based Policies.
"PERSON" shall have the meaning set forth in the Distribution Agreement.
"POLICIES" means insurance policies and insurance contracts of any kind
(other than life and benefits policies or contracts), including, without
limitation, primary, excess and umbrella policies, commercial general
liability policies, fiduciary liability, automobile, aircraft, property and
casualty, workers' compensation and employee dishonesty insurance policies,
bond and self-insurance and captive insurance company arrangements, together
with the rights, benefits and privileges thereunder.
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"PRIOR INDUSTRIAL BUSINESSES" shall have the meaning set forth in the
Distribution Agreement.
"PRIOR SHIPBUILDING BUSINESSES" shall have the meaning set forth in the
Distribution Agreement.
"RETAINED POLICIES" shall mean the Policies identified on SCHEDULE D hereto,
together with all other current and past primary, workers' compensation,
automobile liability and general liability (including products liability)
Policies showing Tenneco, any other member of the Energy Group or any of their
respective predecessors (or such entity and its subsidiaries and/or
affiliates) as the insured party and which are cost plus, fronting, high
deductible or retrospective premium programs but excluding the Eastern
Policies.
"SHIPBUILDING" shall mean, when unqualified, the Shipbuilding Assets,
Shipbuilding Liabilities, Prior Shipbuilding Businesses and/or Shipbuilding
Business.
"SHIPBUILDING ASSETS" shall have the meaning set forth in the Distribution
Agreement.
"SHIPBUILDING BUSINESS" shall have the meaning set forth in the Distribution
Agreement.
"SHIPBUILDING COVERED PERSON" shall mean each member of the Shipbuilding
Group and any other Person, in each case to the extent any Policy addressed
herein purports to provide insurance coverage in respect of any claims, suits,
actions, proceedings, injuries, losses, liabilities, occurrences, damages or
expenses incurred by such Person arising out of, in connection with or
otherwise related to Shipbuilding.
"SHIPBUILDING EXCLUSIVE POLICIES" shall mean all current and past Policies
which show Shipbuilding Company, any other member of the Shipbuilding Group or
any of their respective predecessors (or such entity and its subsidiaries
and/or affiliates) as the named insured and do not purport to relate to Energy
or Industrial or to cover any Energy Covered Person or Industrial Covered
Person, but excluding any Retained Policy.
"SHIPBUILDING GROUP" shall have the meaning set forth in the Distribution
Agreement.
"SHIPBUILDING LIABILITIES" shall have the meaning set forth in the
Distribution Agreement.
"SUBSIDIARY" shall have the meaning set forth in the Distribution Agreement.
"TENNECO EXCLUSIVE POLICIES" shall mean all current and past Policies,
including but not limited to the current Policies set forth on SCHEDULE E
hereto, which show Tenneco, any other member of the Energy Group or any of
their respective predecessors (or such entity and its subsidiaries and/or
affiliates) as the named insured and do not purport to relate to Shipbuilding
or Industrial or to cover any Shipbuilding Covered Person or Industrial
Covered Person, excluding (i) any directors' and officers' liability policies
which are or were maintained by or on behalf of Tenneco, and (ii) any Retained
Policy.
"TERMINATION TIME" shall mean with respect to coverage under any Policy for
any Covered Person, the time as of which coverage under said Policy is to be
cancelled with respect to that Covered Person pursuant to the terms hereof.
"TRANSFERRED CLAIMS-MADE POLICIES" shall have the meaning set forth in
Section 2.2 hereof.
"TRANSFERRED OCCURRENCE-BASED POLICIES" shall have the meaning set forth in
Section 2.1 hereof.
"TRANSFERRED POLICIES" shall have the meaning set forth in Section 2.3
hereof.
1.2 References. References herein to a "Schedule" are, unless otherwise
specified, to one of the Schedules attached to this Agreement, and references
to an "Article" or a "Section" are, unless otherwise specified, to one of the
Articles or Sections, respectively, of this Agreement.
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ARTICLE II
SUBSTITUTION OF NAMED INSUREDS AND CANCELLATION OF POLICIES
2.1 Current Occurrence-Based Policies. On or prior to the Distribution Date,
Tenneco shall take or cause to be taken all necessary or appropriate action
(i) so that the Industrial Company (and, at the option of Industrial Company,
its subsidiaries and affiliates after giving effect to the Distributions) is
added as a named insured under those Current Occurrence-Based Policies
identified on SCHEDULE 2.1-A hereto (the "TRANSFERRED OCCURRENCE-BASED
POLICIES"), effective as of the Distribution Time, and (ii) to cause the
Current Occurrence-Based Policies identified on SCHEDULE 2.1-B hereto to be
cancelled as of, and to afford no further coverage to the insureds thereunder
except as otherwise contemplated by this Agreement from and after, (A) the
Distribution Time, with respect to any Industrial Covered Person or
Shipbuilding Covered Person, and (B) the Merger Time, with respect to any
Energy Covered Person. Industrial Company agrees to be added as a named
insured under the Transferred Occurrence-Based Policies and to execute such
further documents as Tenneco may reasonably request in connection therewith.
2.2 Current Claims-Made Policies. On or prior to the Distribution Date,
Tenneco shall take or cause to be taken all necessary or appropriate action
(i) so that the Industrial Company (and, at the option of Industrial Company,
its subsidiaries and affiliates after giving effect to the Distributions) is
added as a named insured under those Current Claims-Made Policies identified
on SCHEDULE 2.2-A hereto (the "TRANSFERRED CLAIMS-MADE POLICIES"), effective
as of the Distribution Time, and (ii) to cause the Current Claims-Made
Policies identified on SCHEDULE 2.2-B hereto to be cancelled as of, and to
afford no further coverage to the insureds thereunder except as otherwise
contemplated by this Agreement from and after, (A) the Distribution Time, with
respect to any Industrial Covered Person or Shipbuilding Covered Person, and
(B) the Merger Time, with respect to any Energy Covered Person. Industrial
Company agrees to be added as a named insured under the Transferred Claims-
Made Policies and to execute such further documents as Tenneco may reasonably
request in connection therewith.
2.3 Consent. Tenneco and Industrial Company shall each use its best efforts
to obtain prior to the Distribution Date the consent of each insurance carrier
under the Transferred Occurrence-Based Policies and the Transferred Claims-
Made Policies (collectively, the "TRANSFERRED POLICIES") that is required to
consummate the transactions contemplated by Sections 2.1 and 2.2 hereof (each,
a "CONSENT"), it being understood that if Consent to such transactions is not
received as contemplated by this Section 2.3 with respect to any Policy, such
Policy shall nonetheless be considered and treated as a Transferred Claims-
Made Policy or Transferred Occurrence-Based Policy, as the case may be, for
purposes of this Agreement.
2.4 No Transfer of Certain Policies. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
add Industrial Company as a named insured under any Transferred Policy without
Consent thereto if such addition without such Consent would constitute a
breach of such Transferred Policy. If Consent to such addition is not obtained
prior to the Distribution Date, Tenneco and Industrial Company agree to
negotiate in good faith an arrangement which shall place the Industrial
Company, insofar as reasonably possible, in the same position as would have
existed had such Consent to addition been obtained prior to the Distribution
Date.
ARTICLE III
COVERAGE
3.1 Maintenance of Coverage Through Merger Time. From the date hereof up to
the Merger Time, the parties hereto agree to use their best efforts to
maintain (and to cause each member of their respective Groups over which they
have legal or effective direct or indirect control to maintain) in full force
and effect the Occurrence-Based Policies, Claims-Made Policies, Eastern
Policies and Retained Policies for the benefit of any Energy Covered Person,
Industrial Covered Person and Shipbuilding Covered Person to which such
Policies by
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their terms relate except to the extent coverage under any such Policy is to
be terminated hereunder prior to the Merger Time (it being understood that
there shall be no obligation hereunder to maintain in full force and effect
coverage under any such Policy which, by operation of the terms of such
Policy, is terminated as to any Covered Person as a result of the
Distributions).
3.2 Coverage Under Occurrence-Based Policies.
(a) Termination of Coverage Under Transferred Occurrence-Based Policies. The
parties hereto agree to take or cause to be taken all necessary or appropriate
action so that, notwithstanding anything to the contrary contained in any
Transferred Occurrence-Based Policy, coverage under the Transferred
Occurrence-Based Policies shall be terminated (it being understood that such
Transferred Occurrence-Based Policies shall nonetheless remain in full force
and effect) so that none of the Transferred Occurrence-Based Policies shall
afford any further coverage to any Energy Covered Person or Shipbuilding
Covered Person for occurrences which take place or are alleged to have taken
place on or after the (A) Merger Time, with respect to any Energy Covered
Person and (B) Distribution Time, with respect to any Shipbuilding Covered
Person. From and after the Distribution Time and Merger Time, coverage under
any Transferred Occurrence-Based Policy may, at the option of Industrial
Company and subject to the rights of the insurers thereunder, continue for any
Industrial Covered Person upon the terms and conditions of such Transferred
Occurrence-Based Policy.
(b) Termination of Coverage Under Other Occurrence-Based Policies. The
parties hereto agree to take or cause to be taken all necessary or appropriate
action so that, notwithstanding anything to the contrary contained in any
Other Occurrence-Based Policy, coverage under the Other Occurrence-Based
Policies shall be terminated so that none of the Other Occurrence-Based
Policies shall afford any further coverage to any Energy Covered Person,
Industrial Covered Person or Shipbuilding Covered Person for occurrences which
take place or are alleged to have taken place on or after the (A) Merger Time,
with respect to any Energy Covered Person, and (B) Distribution Time, with
respect to any Shipbuilding Covered Person or Industrial Covered Person.
(c) Access to Policies Following Termination Time. Notwithstanding the
provisions of Sections 3.2(a) and 3.2(b) hereof, from and after their
respective Termination Time under any Occurrence-Based Policy each Energy
Covered Person, Industrial Covered Person and Shipbuilding Covered Person
shall have the right to coverage and to make or pursue a claim for coverage
under such Occurrence-Based Policy with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, occurrences, damages and expenses
incurred or claimed to have been incurred prior to such Termination Time by
such Covered Person in or in connection with the operation of, or otherwise
related to, (i) Energy, with respect to any Energy Covered Person, (ii)
Industrial, with respect to any Industrial Covered Person, or (iii)
Shipbuilding, with respect to any Shipbuilding Covered Person, in each case
subject to the terms, conditions and limitations of such Occurrence-Based
Policy, provided, however, that nothing in this Section 3.2(c) shall be deemed
to constitute or reflect an assignment of any such Occurrence-Based Policy.
(d) Policy Limits. Any Energy Covered Person, Industrial Covered Person or
Shipbuilding Covered Person entitled hereunder to make or pursue a claim for
insurance coverage under an Occurrence-Based Policy may claim for such
insurance as and to the extent that such insurance is available up to the full
extent of the applicable limits of liability under such Occurrence-Based
Policy. Notwithstanding the foregoing, each of Tenneco, Industrial Company and
Shipbuilding Company shall, to the extent any of its respective Covered
Persons shall have exhausted all or any portion of the limits of liability, if
any, under any Occurrence-Based Policy, use its best efforts to either (i)
obtain and comply in full with the conditions required to effect the
reinstatement of the full limits of liability under such Occurrence-Based
Policy for all claims which would be covered thereby absent such exhaustion
(including any pending or known claims) and be responsible for and pay all
costs and expenses, including the amount of any resultant increase in the
premium charged in respect of such Occurrence-Based Policy or any renewal
thereof, in connection therewith, or (ii) obtain and maintain in full force
and effect a Policy in replacement of the limits of liability exhausted under
such Occurrence-Based Policy for all claims which would be covered thereby
absent such exhaustion (including any pending or known claims), and be
responsible for and pay all costs and expenses in connection therewith, which
Policy shall provide at least the same coverage,
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and contain terms and provisions which are no less favorable to the insured
parties, as existed under the Occurrence-Based Policy in respect of which such
replacement is obtained, provided, however, that no party hereto shall be
required to expend more than an amount equal to 350% of the original premium
paid with respect to the portion of the limits of liability under such
Occurrence-Based Policy (determined on a pro rata basis) exhausted by such
party's respective Covered Persons to obtain reinstatement or a replacement
Policy as contemplated hereby, it being understood that each party hereto
shall nonetheless be required to obtain the maximum amount of reinstatement or
replacement coverage available for such 350% premium amount in accordance with
the terms and provisions of clauses (i) or (ii) hereof, as applicable. If at
any time a party (an "Impairing Party") hereto becomes aware (such party being
deemed to be aware whenever any of the directors or executive officers of such
party or any other member of its respective Group become aware) of a claim or
potential claim against any of such Impairing Party's respective Covered
Persons which claim is reasonably likely to exhaust (but has not yet
exhausted) all or any portion of the aggregate limits of liability, if any,
under any Occurrence-Based Policy (a "Potential Impairment"), such Impairing
Party shall promptly provide notice of such Potential Impairment to the other
parties hereto. Such Impairing Party shall have five business days after
providing such notice to elect to, at that time, either secure reinstatement
of the limits of liability under such Occurrence-Based Policy (to the extent
provided for therein) or purchase a Policy in replacement of such limits of
liability (in each case in accordance with the terms and provisions of the
second preceding sentence) in respect of such Potential Impairment (but shall
not be required to so elect at such time). If such Impairing Party does not
timely elect to secure reinstatement or replacement coverage, then either or
both of the other parties hereto may elect to reinstate the limits of
liability under such Occurrence-Based Policy (to the extent provided for
therein) and pay all expenses incurred in connection therewith, provided,
however, that if such Potential Impairment actually occurs, the Impairing
Party shall reimburse the other parties for any fees and expenses incurred by
such parties in connection with such reinstatement.
3.3 Coverage Under Claims-Made Policies.
(a) Termination of Coverage Under Transferred Claims-Made Policies. The
parties hereto agree to take or cause to be taken all necessary or appropriate
action so that, notwithstanding anything to the contrary contained in any
Transferred Claims-Made Policy, coverage under the Transferred Claims-Made
Policies shall be terminated (it being understood that such Transferred
Claims-Made Policies shall nonetheless remain in full force and effect) so
that none of the Transferred Claims-Made Policies shall afford any further
coverage to any Energy Covered Person or Shipbuilding Covered Person for
claims which have not been reported or made as provided by the terms of such
Transferred Claims-Made Policy prior to (A) the Merger Time, with respect to
any Energy Covered Person, and (B) the Distribution Time, with respect to any
Shipbuilding Covered Person. From and after the Distribution Time and Merger
Time, coverage under any Transferred Claims-Made Policy may, at the option of
Industrial Company and subject to the rights of the insurers thereunder,
continue for any Industrial Covered Person upon the terms and conditions of
such Transferred Claims-Made Policy.
(b) Termination of Coverage Under Other Claims-Made Policies. The parties
hereto agree to take or cause to be taken all necessary or appropriate action
so that, notwithstanding anything to the contrary contained in any Other
Claims-Made Policy, coverage under the Other Claims-Made Policies shall be
terminated so that no Other Claims-Made Policy shall afford any further
coverage to any Energy Covered Person, Industrial Covered Person or
Shipbuilding Covered Person for claims which have not been reported or made as
provided by the terms of such Other Claims-Made Policy prior to (A) the Merger
Time, with respect to any Energy Covered Person, and (B) the Distribution
Time, with respect to any Shipbuilding Covered Person or Industrial Covered
Person.
(c) Access to Policies Following Termination Time. Notwithstanding the
provisions of Sections 3.3(a) and 3.3(b) hereof, from and after their
respective Termination Time under any Claims-Made Policy each Energy Covered
Person, Industrial Covered Person and Shipbuilding Covered Person shall have
the right to coverage and to make or pursue a claim for coverage under such
Claims-Made Policy with respect to all claims, suits, actions, proceedings,
injuries, losses, liabilities, occurrences, damages and expenses which are
reported in accordance with the terms of such Claims-Made Policy prior to such
Termination Time and which are incurred
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or claimed to be incurred by such Covered Person in or in connection with the
operation of, or otherwise related to, (i) Energy, with respect to any Energy
Covered Person, (ii) Industrial, with respect to any Industrial Covered
Person, or (iii) Shipbuilding, with respect to any Shipbuilding Covered
Person, in each case subject to the terms, conditions and limitations of such
Claims-Made Policy, provided, however, that nothing in this Section 3.3(c)
shall be deemed to constitute or reflect an assignment of any such Claims-Made
Policy.
(d) Policy Limits. Any Energy Covered Person, Industrial Covered Person or
Shipbuilding Covered Person entitled hereunder to make or pursue a claim for
insurance coverage under a Claims-Made Policy may claim for such insurance as
and to the extent that such insurance is available up to the full extent of
the applicable limits of liability under such Claims-Made Policy.
Notwithstanding the foregoing, each of Tenneco, Industrial Company and
Shipbuilding Company shall, to the extent any of its respective Covered
Persons shall have exhausted all or any portion of the limits of liability, if
any, under any Claims-Made Policy, use its best efforts to either (i) obtain
and comply in full with the conditions required to effect the reinstatement of
the full limits of liability under such Claims-Made Policy for all claims
which would be covered thereby absent such exhaustion (including any pending
or known claims) and be responsible for and pay all costs and expenses,
including the amount of any resultant increase in the premium charged in
respect of such Claims-Made Policy or any renewal thereof, in connection
therewith, or (ii) obtain and maintain in full force and effect at its own
cost a Policy in replacement of the limits of liability exhausted under such
Claims-Made Policy for all claims which would be covered thereby absent such
exhaustion (including any pending or known claims), and be responsible for and
pay all costs and expenses in connection therewith, which Policy shall provide
at least the same coverage, and contain terms and provisions which are no less
favorable to the insured parties, as existed under the Claims-Made Policy in
respect of which such replacement is obtained, provided, however, that no
party hereto shall be required to expend more than an amount equal to 350% of
the original premium paid with respect to the portion of the limits of
liability under such Claims-Made Policy (determined on a pro rata basis)
exhausted by such party's respective Covered Persons to obtain reinstatement
or a replacement Policy as contemplated hereby, it being understood that each
party hereto shall nonetheless be required to obtain the maximum amount of
reinstatement or replacement coverage available for such 350% premium amount
in accordance with the terms and provisions of clauses (i) or (ii) hereof, as
applicable. If at any time an Impairing Party becomes aware (such party being
deemed to be aware whenever any of the directors or executive officers of such
party or any other member of its respective Group become aware) of a claim or
potential claim against any of such Impairing Party's respective Covered
Persons which claim is reasonably likely to exhaust (but has not yet
exhausted) all or any portion of the aggregate limits of liability, if any,
under any Claims-Made Policy (a "Potential Impairment"), such Impairing Party
shall promptly provide notice of such Potential Impairment to the other
parties hereto. Such Impairing Party shall have five business days after
providing such notice to elect to, at that time, either secure reinstatement
of the limits of liability under such Claims-Made Policy (to the extent
provided for therein) or purchase a Policy in replacement of such limits of
liability (in each case in accordance with the terms and provisions of the
second preceding sentence) in respect of such Potential Impairment (but shall
not be required to so elect at such time). If such Impairing Party does not
timely elect to secure reinstatement or replacement coverage, then either or
both of the other parties hereto may elect to reinstate the limits of
liability under such Claims-Made Policy (to the extent provided for therein)
and pay all expenses incurred in connection therewith, provided, however, that
if such Potential Impairment actually occurs, the Impairing Party shall
reimburse the other parties for any fees and expenses incurred by such parties
in connection with such reinstatement.
3.4 Coverage Under Retained Policies.
(a) Termination of Coverage at Distribution Time. The parties hereto agree
to take or cause to be taken all necessary or appropriate action so that,
except as otherwise contemplated by the terms of this Agreement and
notwithstanding anything to the contrary contained in any Retained Policy,
effective as of the Distribution Time any and all coverage of any Industrial
Covered Person or Shipbuilding Covered Person under the Retained Policies
shall be terminated (it being understood that such Retained Policies shall
nonetheless remain in full force and effect). From and after the Distribution
Time, coverage under any of the Retained Policies may, at the option of
Tenneco and subject to the rights of the insurers thereunder, continue for any
Energy Covered Person upon the terms and conditions of such Retained Policies
(it being understood that the insurer under the Retained Policies currently in
effect has expressed its intention to cancel coverage thereunder as of the
Merger Time).
8
(b) Access to Policies and Policy Limits. Notwithstanding the provisions of
Section 3.4(a) hereof, from and after the Distribution Time each Industrial
Covered Person and Shipbuilding Covered Person shall have the right to
coverage and to make or pursue a claim for coverage under any Retained Policy
with respect to all claims, suits, actions, proceedings, injuries, losses,
liabilities, occurrences, damages and expenses incurred or claimed to have
been incurred prior to the Distribution Time by such Covered Person in or in
connection with the operation of, or otherwise related to, (i) Industrial,
with respect to any Industrial Covered Person, or (ii) Shipbuilding, with
respect to any Shipbuilding Covered Person, in each case subject to the terms,
conditions and limitations of such Retained Policy, provided, however, that
nothing in this Section 3.4(b) shall be deemed to constitute or reflect an
assignment of any such Retained Policy. Any Industrial Covered Person or
Shipbuilding Covered Person may claim insurance coverage under a Retained
Policy as and to the extent that such insurance is available up to the full
extent of the applicable limits of liability under such Retained Policy.
3.5 Coverage Under Eastern Policies.
(a) Termination of Coverage Under Eastern Policies. The parties hereto agree
to take or cause to be taken all necessary or appropriate action so that,
notwithstanding anything to the contrary contained in any Eastern Policies,
effective as of the Distribution Time coverage under the Eastern Policies
shall be terminated (it being understood that such Eastern Policies in full
force and effect as of the Distribution Time shall nonetheless remain in full
force and effect) so that the Eastern Policies do not afford any further
coverage to any Industrial Covered Person or Shipbuilding Covered Person for
occurrences which take place or are alleged to have taken place on or after
the Distribution Time. From and after the Distribution Time, coverage under
the Eastern Policies may, at the option of Tenneco and subject to the rights
of the insurers thereunder, continue for any Energy Covered Person upon the
terms and conditions of the Eastern Policies.
(b) Access to Eastern Policies Following Distribution Time. Notwithstanding
the provisions of Sections 3.5(a) hereof, from and after the Distribution Time
each Energy Covered Person, Industrial Covered Person (to the extent (but only
to that extent and subject to the last sentence of this Section 3.5(b) and
Section 3.5(d)) payment under any Eastern Policy is a condition precedent to
the provision of coverage by any insurer providing coverage in the same layer
as, or a layer excess to that of, such Eastern Policy) and Shipbuilding
Covered Person (to the extent (but only to the extent and subject to the last
sentence of this Section 3.5(b)) necessary to access reinsurance policies)
shall have the right to coverage and to make or pursue a claim for coverage
under any Eastern Policy with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, occurrences, damages and expenses
incurred or claimed to have been incurred prior to the Distribution Time by
such Covered Person in or in connection with the operation of, or otherwise
related to, (i) Energy, with respect to any Energy Covered Person, (ii)
Industrial, with respect to any Industrial Covered Person, or (iii)
Shipbuilding, with respect to any Shipbuilding Covered Person, in each case,
subject to the terms, conditions and limitations of such Eastern Policy,
provided, however, that nothing in this Section 3.5(b) shall be deemed to
constitute or reflect an assignment of the Eastern Policies. The parties
hereto agree to take or cause to be taken all necessary or appropriate actions
so that, from and after the Distribution Time, no Industrial Covered Person or
Shipbuilding Covered Person shall be entitled to coverage or to make or pursue
a claim for coverage under the Eastern Policies except to the extent expressly
provided for herein and in no event shall the Eastern Insurance Provider (as
defined below) or any of its subsidiaries have any obligation or liability to
any Shipbuilding Covered Person or Industrial Covered Person under any Eastern
Policy which is not either as a conduit with respect to third party
reinsurance or subject to reimbursement by Industrial Company pursuant to
Section 3.5(d).
(c) Policy Limits. Any Energy Covered Person, Industrial Covered Person or
Shipbuilding Covered Person entitled hereunder to make or pursue a claim for
insurance coverage under the Eastern Policies may claim for such insurance as
and to the extent that such insurance is available up to the full extent of
the applicable limits of liability under the Eastern Policies, subject to the
provisions of Section 3.5(b).
(d) Reimbursement Obligation of Industrial Company. Industrial Company
agrees to reimburse to the insurer under each Eastern Policy (the "EASTERN
INSURANCE PROVIDER") the full amount of any claim for insurance coverage for
an Industrial Covered Person under such Eastern Policy made pursuant to the
terms of Section 3.5(b) hereof which is actually paid by said Eastern
Insurance Provider after the Distribution Time.
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3.6 Coverage Under Exclusive Policies. From and after the Distribution Time,
coverage under any Exclusive Policy may (at the option of the party or parties
shown as the named insured thereunder, and subject to the rights of the
insurers thereunder) continue with respect to any claims, suits, actions,
proceedings, injuries, losses, liabilities, occurrences, damages or expenses
incurred or claimed to have been incurred prior to, on or after the
Distribution Date, subject to the terms, conditions and limitations of such
Exclusive Policy, provided, however, that (i) no member of the Energy Group
shall have any liability or obligation with respect to any of the Industrial
Exclusive Policies or Shipbuilding Exclusive Policies, (ii) no member of the
Industrial Group shall have any liability or obligation with respect to any of
the Tenneco Exclusive Policies or Shipbuilding Exclusive Policies, and (iii)
no member of the Shipbuilding Group shall have any liability or obligation
with respect to any of the Tenneco Exclusive Policies or Industrial Exclusive
Policies.
3.7 Assistance in Obtaining Additional Coverage. Each of the parties hereto
agrees to use its reasonable best efforts to assist the other parties in the
transition to separate insurance coverage for the Energy Group, Industrial
Group and Shipbuilding Group from and after the Distribution Date which
assistance shall include, but shall not be limited to, the identification of
potential insurance carriers.
3.8 Discovery Periods. Except with respect to any Industrial Covered Person
and except as the parties hereto may otherwise agree, the parties hereto
acknowledge and agree that when this Agreement calls for the termination of
insurance coverage under a Claims-Made Policy such insurance coverage shall be
terminated as of the time specified and that no discovery period of coverage
in respect of such Policy shall be provided thereunder, notwithstanding
anything to the contrary contained herein or in any such Policy.
Notwithstanding the foregoing, if requested to do so by Tenneco, Industrial
Company shall use its reasonable efforts to procure that the relevant insurers
under the Claims-Made Policies offer to Tenneco a discovery period of coverage
under said Claims-Made Policies for Energy Covered Persons with an aggregate
limitation of liability separate from the limitation of liability under said
Claims-Made Policies for coverage afforded Industrial Covered Persons. All
premiums, costs and other charges with respect to any discovery period of
coverage provided under any Claims-Made Policy shall be the sole
responsibility of (i) Tenneco, with respect to coverage for Energy Covered
Persons, and (ii) Industrial Company, with respect to coverage for Industrial
Covered Persons. Each party hereto shall not (and shall not permit any of its
respective Covered Persons over which it has legal or effective direct or
indirect control to) take any action contrary to the provisions of this
Section 3.8.
3.9 Further Assurances. Each of Tenneco, Industrial Company and Shipbuilding
Company agree to take (and to cause each of its respective Covered Persons
over which it has direct or indirect legal or effective control to take) all
such actions as are necessary or appropriate, including the provision of
notice to all relevant insurance carriers and cooperation with respect to the
obtaining of any reinstatement of limitations on liability as contemplated
hereby, to effectuate the purposes of this Article III.
ARTICLE IV
PREMIUMS, DEDUCTIBLES AND RELATED MATTERS
4.1 Occurrence-Based and Claims-Made Policies.
(a) Premiums in Respect of Occurrence-Based and Claims-Made Policies. From
and after the Distribution Time, all premiums, costs and other charges with
respect to any Occurrence-Based Policy or Claims-Made Policy shall be paid by
Industrial Company, provided, however, that (i) Tenneco shall promptly
reimburse Industrial Company in full for any such premiums, costs or other
charges in respect of the cover afforded under any such Occurrence-Based
Policy or Claims-Made Policy to any Energy Covered Person, and (ii)
Shipbuilding Company shall promptly reimburse Industrial Company in full for
any such premiums, costs or other charges in respect of the cover afforded
under any such Occurrence-Based Policy or Claims-Made Policy to any
Shipbuilding Covered Person, in each case determined in accordance with
Tenneco's historical practices with respect to the allocation of such
premiums, costs and charges prior to the date hereof. All amounts refunded
from and after the
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Distribution Time by insurance carriers in respect of premiums previously paid
under any Occurrence-Based Policy or Claims-Made Policy shall be the sole
property of Industrial Company, provided, however, that Industrial Company
shall promptly pay to Tenneco or the Shipbuilding Company, as applicable, upon
receipt thereof from an insurance carrier, the Energy Group's or the
Shipbuilding Group's respective share of any such amounts refunded (such
respective share to be determined in accordance with Tenneco's historical
practices with respect to the allocation of insurance premiums among its
Subsidiaries and divisions prior to the date hereof). Each of Tenneco and
Shipbuilding Company shall (and shall cause each member of its respective
Group over which it has direct or indirect legal or effective control to)
promptly pay to Industrial Company any such refunded amounts actually received
by it to which Industrial Company is entitled pursuant hereto.
(b) Deductibles, Retentions and Self-Insured Amounts. From and after the
Distribution Time, all deductibles, retentions and self-insured amounts with
respect to coverage or a claim for coverage under any Occurrence-Based Policy
or Claims-Made Policy shall be the sole responsibility of (i) Tenneco, with
respect to any coverage or claim for coverage in respect of any Energy Covered
Person, (ii) Industrial Company, with respect to any coverage or claim for
coverage in respect of any Industrial Covered Person, and (iii) Shipbuilding
Company, with respect to any coverage or claim for coverage in respect of any
Shipbuilding Covered Person.
4.2 Retained Policies.
(a) Premiums, Costs and Other Charges. From and after the Distribution Time,
all premiums, costs and other charges with respect to any Retained Policy,
including claim payments and associated expenses under cost plus or fronting
policies, shall be the sole responsibility of and be paid by Tenneco,
provided, however, that (i) Industrial Company shall promptly reimburse
Tenneco for all such premiums, costs and other charges paid by Tenneco
(including amounts paid by Tenneco as reimbursement in respect of amounts
drawn under letters of credit maintained by Tenneco pursuant to Section 7.1
hereof) in respect of coverage provided for any Industrial Covered Person to
the extent such premiums, costs and other charges exceed the amount of the
Claims Deposit, and (ii) Shipbuilding Company shall promptly reimburse Tenneco
for all such premiums, costs and other charges paid by Tenneco (including
amounts paid by Tenneco as reimbursement in respect of amounts drawn under
letters of credit maintained by Tenneco pursuant to Section 7.1 hereof) in
respect of coverage provided for any Shipbuilding Covered Person. All amounts
refunded from and after the Distribution Time by insurance carriers in respect
of premiums previously paid under any Retained Policy shall be the sole
property of Tenneco, provided, however, that Tenneco shall promptly pay to (i)
Industrial Company, all such refunded amounts in respect of coverage provided
for any Industrial Covered Person under such Retained Policy, and (ii)
Shipbuilding Company, all such refunded amounts in respect of coverage
provided for any Shipbuilding Covered Person under such Retained Policy.
(b) Deductibles, Retentions and Self-Insured Amounts. From and after the
Distribution Time, all deductibles, retentions and self-insured amounts with
respect to coverage or a claim for coverage under any Retained Policy shall be
the sole responsibility of (i) Tenneco, with respect to any coverage or claim
for coverage in respect of any Energy Covered Person, (ii) Industrial Company,
with respect to any coverage or claim for coverage in respect of any
Industrial Covered Person, and (iii) Shipbuilding Company, with respect to any
coverage or claim for coverage in respect of any Shipbuilding Covered Person.
4.3 Eastern Policies.
(a) Premiums in Respect of Eastern Policies. All amounts refunded from and
after the Distribution Time by insurance carriers in respect of premiums
previously paid under any Eastern Policy shall be the sole property of
Tenneco, provided, however, that Tenneco shall promptly pay to (i) Industrial
Company, upon receipt thereof from an insurance carrier, the Industrial
Group's respective share of any such amounts refunded, and (ii) Shipbuilding
Company, upon receipt thereof from an insurance carrier, the Shipbuilding
Group's respective share of any such amounts refunded, in each case determined
in accordance with Tenneco's historical practices with respect to the
allocation of insurance premiums among its Subsidiaries and divisions prior to
the date hereof. Each party shall (and shall cause each member of its
respective Group over which it has direct or indirect legal or effective
control to) promptly pay to any other party any such amounts actually received
by it to which such other party is entitled pursuant to this Section 4.3(a).
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(b) Deductibles, Retentions and Self-Insured Amounts. From and after the
Distribution Time, all deductibles, retentions and self-insured amounts with
respect to coverage or a claim for coverage under any Eastern Policy shall be
the sole responsibility of (i) Tenneco, with respect to any coverage or claim
for coverage in respect of any Energy Covered Person, (ii) Industrial Company,
with respect to any coverage or claim for coverage in respect of any
Industrial Covered Person, and (iii) Shipbuilding Company, with respect to any
coverage or claim for coverage in respect of any Shipbuilding Covered Person.
(c) Amounts to be Refunded. Tenneco shall direct and instruct the Eastern
Insurance Provider to pay to Industrial Company in cash promptly after the
Distribution Time, to the extent permitted by law, and to record a
corresponding dollar-for-dollar reduction in all associated liabilities on its
books and records for, (i) all amounts which appear as reserves on the books
and records of the Eastern Insurance Provider as of the Distribution Time in
respect of claims relating to any Industrial Covered Person which have been
reported prior to the Distribution Time, (ii) the full amount of any "incurred
but not reported" reserve and any portfolio loss transfer reserve appearing on
the books and records of the Eastern Insurance Provider as of the Distribution
Time under the contingent liability programs of the Eastern Policies, and
(iii) 50% of the amount of any "incurred but not reported" reserve appearing
on the books and records of the Eastern Insurance Provider as of the
Distribution Time under the excess liability programs of the Eastern Policies
with respect to Industrial and Energy.
4.4 Exclusive Policies. From and after the Distribution Time, all
deductibles, retentions, self-insured amounts, premiums and other costs with
respect to any Exclusive Policy or claim for coverage thereunder shall be the
sole responsibility of, and all refunded premiums with respect to any
Exclusive Policy shall be the sole property of, (i) Tenneco, with respect to
any Tenneco Exclusive Policy, (ii) Industrial Company, with respect to any
Industrial Exclusive Policy, and (iii) Shipbuilding Company, with respect to
any Shipbuilding Exclusive Policy.
4.5 Excess Costs and Settlements. Each Covered Person shall be responsible
for any excess costs and expenses relating to its respective claims permitted
hereunder (or those of any member of its respective Group) under the Common
Policies, including defense costs to the extent such defense costs are not
covered under such Common Policies, and shall be responsible for obtaining or
reviewing the appropriateness of releases upon settlement of such claims.
4.6 Effect on Other Agreements. Notwithstanding anything to the contrary
contained herein, nothing in this Article IV shall be construed to alter or in
any way limit any rights to indemnity provided in the Distribution Agreement
or in any other Ancillary Agreement (as such term is defined in the
Distribution Agreement).
ARTICLE V
ADMINISTRATION
5.1 Occurrence-Based and Claims-Made Policies.
(a) Administration. From and after the Distribution Date, Claims
Administration and Insurance Administration with respect to the Occurrence-
Based Policies and Claims-Made Policies shall be the responsibility of (i)
Tenneco, with respect to any coverage or claim for coverage of any Energy
Covered Person, (ii) Industrial Company, with respect to any coverage or claim
for coverage of any Industrial Covered Person, and (iii) Shipbuilding Company,
with respect to any coverage or claim for coverage of any Shipbuilding Covered
Person. Each of Shipbuilding Company and Tenneco shall (and shall cause each
of its respective Covered Persons over which it has direct or indirect legal
or effective control to) provide prompt notice to Industrial Company of all
actions taken by it with respect to the Claims Administration and Insurance
Administration for the Occurrence-Based Policies and Claims-Made Policies as
contemplated by this Section 5.1. Each party hereto shall (and shall cause
each other member of its Group over which it has direct or indirect legal or
effective control to) take all necessary or appropriate action, if any, to
delegate Claims Administration and Insurance Administration with respect to
the Occurrence-Based Policies and Claims-Made Policies to any other party who
12
is to assume such responsibilities pursuant hereto and, to the extent such
delegation is not permitted by the terms of any such policy, shall engage in
Claims Administration or Insurance Administration for any such policy only
upon the express authorization and direction of such other party. Each party
hereto shall be responsible for its own disbursements and out-of-pocket
expenses and the direct and indirect costs of its employees or agents relating
to Claims Administration and Insurance Administration contemplated by this
Section 5.1. Notwithstanding anything to the contrary contained herein,
Industrial Company shall have the right, at its option, to undertake at its
own cost and expense Claims Administration and/or Insurance Administration
with respect to any coverage or claim for coverage of any Energy Covered
Person or Shipbuilding Covered Person.
(b) Effect of Administrative Responsibilities. Each of Tenneco, Industrial
Company and Shipbuilding Company acknowledges and agrees that each other
party's responsibilities under this Section 5.1 for Claims Administration and
Insurance Administration shall not relieve any party submitting an insured
claim under any Occurrence-Based Policy or Claims-Made Policy of (a) the
primary responsibility for reporting such insured claim accurately, completely
and in a timely manner, or (b) any other right or responsibility which such
party may have pursuant to the terms of any Occurrence-Based Policy or Claims-
Made Policy.
5.2 Eastern and Retained Policies. From and after the Distribution Time,
Tenneco shall be solely responsible for Claims Administration and Insurance
Administration with respect to the Retained Policies and Eastern Policies
including, without limitation, the administration of all xxxxxxxx associated
with the Retained Policies by the insurance carriers thereunder.
Notwithstanding the foregoing, each of Industrial Company and Shipbuilding
Company shall retain the right to, at its option, direct the management,
defense, reporting and settlement of claims involving its respective Covered
Persons under the Retained Policies and Eastern Policies.
ARTICLE VI
PROCEEDS
6.1 Occurrence-Based and Claims-Made Policies. From and after the
Distribution Date, Insurance Proceeds received with respect to claims, costs
and expenses under the Occurrence-Based Policies and Claims-Made Policies
shall be paid to the Covered Person to which such Insurance Proceeds are due
pursuant to the terms of such Policies.
6.2 Eastern and Retained Policies. From and after the Distribution Date,
Insurance Proceeds received with respect to claims, costs and expenses under
the Retained Policies and Eastern Policies shall be paid, as appropriate, to
the Covered Person to which such Insurance Proceeds are due pursuant to the
terms of such Policies.
6.3 Return of Proceeds. Each of Tenneco, Industrial Company and Shipbuilding
Company shall (and shall cause each of its respective Covered Persons over
which it has direct or indirect legal or effective control to) to promptly pay
to each other party any Insurance Proceeds actually received by it to which
any of such other party's Covered Persons are entitled pursuant hereto, which
other party shall then distribute such Insurance Proceeds to the Covered
Person to which they are due pursuant hereto.
ARTICLE VII
LETTERS OF CREDIT AND SURETY BONDS
7.1 Maintenance. (a) Letters of Credit. From and after the Distribution
Date, to secure obligations under the Retained Policies relating to periods
preceding the Distribution Time, Tenneco shall, for such time as may be
required by law or the terms of any Retained Policy, maintain in full force
and effect the letters of credit identified on SCHEDULE 7.1-A hereto or, as
necessary or appropriate, substitute therefor and maintain in full force and
effect letters of credit acceptable to the insurance carriers and/or surety
under the Retained Policies issued
13
by comparably rated lenders containing substantially identical terms and
conditions (collectively, the "LETTERS OF CREDIT"). The parties hereto shall
use reasonable commercial efforts to obtain the necessary consents and
approvals, and shall thereafter negotiate in good faith an agreement, to
allocate the Letters of Credit among the parties hereto such that each party
becomes responsible for the maintenance of letters of credit for such time as
may be required by law or the terms of any Retained Policy to secure
obligations under the Retained Policies relating to periods prior to the
Distribution Time in respect of coverage afforded thereunder to such party's
respective Covered Persons, provided, however, that neither Industrial Company
nor Shipbuilding Company shall be required to use such reasonable commercial
efforts or negotiate any such agreement if such party determines that the
allocation contemplated hereby cannot be accomplished without commercially
unreasonable expense.
(b) Surety Bonds. The parties hereto acknowledge that Tenneco is obligated
to indemnify the sureties under certain performance bonds and other surety
instruments that secure obligations of the Energy Business, Energy Group,
Industrial Business, Prior Industrial Businesses, Industrial Group,
Shipbuilding Business, Prior Shipbuilding Businesses and/or Shipbuilding Group
including, but not limited to, the surety instruments identified on SCHEDULE
7.1-B hereto (the "TENNECO-PROVIDED BONDS"). From and after the Distribution
Time, Tenneco shall maintain such Tenneco-Provided Bonds in place for such
time as may be required by law. To the extent possible on commercially
reasonable terms, each of Industrial Company and Shipbuilding Company shall
use reasonable commercial efforts to obtain a replacement for each Tenneco-
Provided Bond that secures obligations of the Industrial Business, Prior
Industrial Businesses or Industrial Group (in the case of Industrial Company)
or the Shipbuilding Business, Prior Shipbuilding Businesses or Shipbuilding
Group (in the case of Shipbuilding Company) and to thereafter arrange for the
release of Tenneco from the Tenneco-Provided Bond which has been so replaced.
If the surety under any Tenneco-Provided Bond is required to and does in fact
perform according to the terms of said Tenneco-Provided Bond and Tenneco is
required to and does in fact indemnify such surety in respect thereof, (i)
Industrial Company shall reimburse Tenneco for all amounts actually paid by
Tenneco to such surety to the extent such amounts constitute Industrial
Liabilities, and (ii) Shipbuilding Company shall reimburse Tenneco for all
amounts actually paid by Tenneco to such surety to the extent such amounts
constitute Shipbuilding Liabilities.
7.2 Reimbursement for Maintenance Fees. Each of Industrial Company and
Shipbuilding Company hereby agrees to reimburse Tenneco annually commencing on
January 31, 1998 (such date and each anniversary thereof being referred to
herein as a "DUE DATE") for the actual and reasonable administrative fees and
expenses paid by Tenneco (the "LC MAINTENANCE FEES") in respect of the
issuance and maintenance of the Letters of Credit during the twelve-month
period ended 31 days prior to such year's Due Date (each, a "YEARLY PERIOD"),
to the extent such Letters of Credit secure obligations relating to any
Industrial Covered Person or Shipbuilding Covered Person, respectively, under
the Retained Policies. The amount of the LC Maintenance Fees for each Yearly
Period which shall be the responsibility of Industrial Company and
Shipbuilding Company hereunder shall be based on the total outstanding
reserves showing on the books and records of CIGNA, as of February 28 during
such Yearly Period, for claims by all Industrial Covered Persons, Energy
Covered Persons and Shipbuilding Covered Persons under the Retained Policies
relating to periods prior to the Distribution Time (the "YEARLY TOTAL
RESERVES"). Industrial Company shall reimburse Tenneco hereunder for an amount
equal to the LC Maintenance Fees for each Yearly Period multiplied by a
fraction, (i) the numerator of which is equal to the outstanding reserves
showing on the books and records of CIGNA, as of February 28 during such
Yearly Period, for claims by all Industrial Covered Persons under the Retained
Policies relating to periods prior to the Distribution Time, and (ii) the
denominator of which is equal to the Yearly Total Reserves for such Yearly
Period. Shipbuilding Company shall reimburse Tenneco hereunder for an amount
equal to the LC Maintenance Fees for each Yearly Period multiplied by a
fraction, (i) the numerator of which is equal to the outstanding reserves
showing on the books and records of CIGNA, as of February 28 during such
Yearly Period, for claims by all Shipbuilding Covered Persons under the
Retained Policies relating to periods prior to the Distribution Time, and (ii)
the denominator of which is equal to the Yearly Total Reserves for such Yearly
Period.
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ARTICLE VIII
MISCELLANEOUS
8.1 Termination. This Agreement may not be terminated except upon the
written agreement of each of the parties hereto.
8.2 Further Assurances. If at any time after the Distribution Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of Tenneco, Industrial Company and Shipbuilding Company shall,
on the written request of any of them, take (or cause the appropriate member
of its Group over which it has direct or indirect legal or effective control
to take) all such reasonably necessary or desirable action. If subsequent to
the Distribution Date any Policy showing any member of the Energy Group,
Industrial Group or Shipbuilding Group, or any of their respective
predecessors, as named insured is discovered which was in effect for periods
prior to the Distribution Time and has not been addressed by the provisions of
this Agreement or the Merger Agreement, the parties hereto agree to negotiate
in good faith an arrangement with respect to such Policy which shall give, to
the fullest extent possible, effect to the purposes of this Agreement and the
transactions contemplated by the Distribution Agreement.
8.3 Cooperation. The parties hereto agree to use their reasonable best
efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement. Each party hereto shall not (and shall not
permit any of its respective Covered Persons over which it has legal or
effective direct or indirect control to) take any action or permit any
inaction that could reasonably be expected to jeopardize or otherwise
interfere with the rights of any other party (or any of such other party's
respective Covered Persons) hereunder or the ability of any other party (or
any of such other party's respective Covered Persons) to collect any proceeds
which might be available under any of the Policies addressed herein in
accordance with the terms of this Agreement.
8.4 No Representations and Warranties. The parties hereto understand and
agree that no representation or warranty as to the existence, applicability or
extent of insurance coverage for Energy, Industrial or Shipbuilding under any
Policy is herein being made.
8.5 Limitation on Liability. Except as may be otherwise expressly provided
for herein, no party hereto shall be liable hereunder to another party or any
of such other party's Covered Persons for claims not reimbursed by insurers
for any reason not within the control of such party including, without
limitation, coinsurance provisions, deductibles, quota share deductibles,
exhaustion of aggregates, self-insured retentions, bankruptcy or insolvency of
an insurance carrier, Policy limitations or restrictions, any coverage
disputes, any failure to timely claim or any defect in such claim or its
processing.
8.6 Successors and Assigns. Except as otherwise expressly provided herein,
no party hereto may assign or delegate, whether by operation of law or
otherwise, any of such party's rights or obligations under or in connection
with this Agreement without the written consent of each other party hereto. No
assignment will, however, release the assignor of any of its obligations under
this Agreement or waive or release any right or remedy the other parties may
have against such assignor hereunder. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto will be binding upon and enforceable
against the respective successors and assigns of such party and will be
enforceable by and will inure to the benefit of the respective successors and
permitted assigns of such party.
8.7 Modification; Waiver; Severability. This Agreement may not be amended or
modified except in a writing executed by each of the parties hereto. The
failure by any party to exercise or a delay in exercising any right provided
for herein shall not be deemed a waiver of any right hereunder. Whenever
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under applicable law,
such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
15
8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which
taken together shall constitute one and the same Agreement.
8.9 Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
8.10 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
five business days after mailing by certified or registered mail, return
receipt requested and postage prepaid, to the recipient at such recipient's
address as indicated below:
TENNECO INC.:1010 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Corporate Secretary
INDUSTRIAL COMPANY:1275 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Secretary
SHIPBUILDING COMPANY:4101 Xxxxxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Corporate Secretary
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
8.11 Survival. Each of the agreements of the parties herein shall survive
the Distribution Date.
8.12 No Third Party Beneficiaries. This Agreement is made solely for the
benefit of the parties hereto and their respective Covered Persons, and shall
not give rise to any rights of any kind to any other third parties.
8.13 Other. ALL QUESTIONS AND/OR DISPUTES CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE. EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO
BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS TO, THE JURISDICTION OF THE
COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE
OF DELAWARE. This Agreement, together with the Distribution Agreement and
other Ancillary Agreements (as such term is defined in the Distribution
Agreement), constitutes the entire agreement and supersedes all other prior
and contemporaneous agreements and undertakings, both written and oral, among
the parties with respect to the subject matter hereof.
8.14 Sole Agent. In all matters relating to this Agreement, including the
resolution of any disputes relating to this Agreement between any members of
different Groups, (i) Tenneco shall be the sole agent for the members of the
Energy Group, (ii) Industrial Company shall be the sole agent for the members
of the Industrial Group, and (iii) Shipbuilding Company shall be the sole
agent for members of the Shipbuilding Group. No member of any Group shall have
any authority to represent itself in any such matter or to terminate such
agency without the prior written consent of each party hereto.
8.15 No Double Recovery. No provision of this Agreement shall be construed
to provide recovery to any Person for any costs, expenses or other amounts for
which such Person has been fully compensated under any other provision of this
Agreement, any other agreement or otherwise.
16
IN WITNESS WHEREOF, the parties have made and entered into this Insurance
Agreement as of the date first set forth above.
TENNECO INC.
/s/ Xxxxx X. Xxxx
By __________________________________
Name: Xxxxx X. Xxxx
Title: Vice President and Treasurer
NEW TENNECO INC.
/s/ Xxxxx X. Xxxx
By __________________________________
Name: Xxxxx X. Xxxx
Title: Vice President and Treasurer
NEWPORT NEWS SHIPBUILDING INC.
/s/ Xxxxxxx X. Xxxxxxxx
By __________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
17
SCHEDULE A
TO INSURANCE AGREEMENT
CURRENT CLAIMS-MADE POLICIES
OTHER POLICY
SCHED. TYPE OF COVERAGE POLICY NUMBER DATES UNDERWRITER LIMITS DEDUCTIBLES
------ ---------------- ------------- ------ ----------- ------ -----------
2.2-A Excess Liability XLUMB 00912 9/1/96-97 XL Insurance Company- $100,000,000xs
Bermuda $100,000,000
2.2-B Excess Liability UO5138609 9/1/96-97 OCIL-Bermuda $100,000,000xs
$200,000,000
2.2-B Excess Liability TGT 5035/4 9/1/96-97 ACE Insurance Company- $200,000,000xs
Bermuda $300,000,000
2.2-B Fiduciary Liability NIA 0120905-96 3/1/96-97 Reliance $ 50,000,000 $500,000
71FF 1010075268CM Aetna
8141-48-49-A Federal
2.2-B ERISA Bond (Crime) 000-00-00 9/1/96-97 National Union Fire $ 15,000,000 NIL
Ins. Co. (AIG)
18
SCHEDULE B
TO INSURANCE AGREEMENT
CURRENT OCCURRENCE-BASED POLICIES
OTHER TYPE OF
SCHED. COVERAGE POLICY NUMBER POLICY DATES UNDERWRITER LIMITS
------ -------- ------------- ------------ ----------- ------
2.1-B Excess Liability DL039795/07 9/1/96-97 Xxxxxxx-Konzern $10,000,000 xs
$10,000,000
2.1-B Excess Liability BE8180249RA 9/1/96-97 American $25,000,000 xs
International (AIG) $20,000,000
Specialty Lines Ins. Co.
2.1-B Excess Liability DL188696/01 9/1/96-97 Xxxxxxx-Konzern $25,000,000 xs
$45,000,000
2.1-B Excess Liability EU 0835533-01 9/1/96-97 Steadfast Insurance Co. $22,000,000 xs
(Zurich) $70,000,000
2.1-B Excess Liability XTP 48390 9/1/96-97 United National Insur. Co. $8,000,000 xs
(Front for Amer Re) $92,000,000
2.1-B Automobile--Mexico HLN 00261 1/1/96-97 Seguros Comercial BI: $30,000/
America $60,000
PD: $30,000
2.1-A Aircraft Products Lia- 46 MPP 154779 9/1/96-97 Associated Aviation $150,000,000
bility Underwriters Aggr. Cov. A
$100,000,000
Aggr. Cov. B
$150,000,000
Aggr. Cov. A & B
2.1-A Aviation Hull & Liabil- 46BVH-153922 7/1/94-97 Associated Aviation $100,000,000
ity Underwriters Per Occurrence
2.1-B Ocean Cargo EIPH1008 7/1/96-97 ESIS International, Inc. $10,000,000
One Conveyance
2.1-A All Risk Property Dam- YMM800856 6/1/96-97 Royal Insurance $2,000,000,000
age/ Blanket Per Occur.
Business Interruption
(Global)
2.1-B Comprehensive Boiler & BMI-SA-9138264-20 11/1/96-97 Hartford Steam Boiler $100,000,000
Machinery Per Accident
Property
Damage/Business
Interruption
2.1-B Foreign Public & Prod- 62/99102/D 9/1/96-97 Xxxxxxx-Konzern $2,000,000
ucts Liability Per Occurrence
Insurance (Primary Cov-
er)
2.1-B Umbrella Excess Liabil- W51010 9/1/96-97 Winterthur (Front for $8,000,000
ity Eastern Insurance Co.) Any One
Occurrence
xs $2,000,000
2.1-B Employer's Liability 054/095/6000 Not avail. Eagle Star Not avail.
5626/1 Insurance Company
Limited
2.1-B Personal Accident--Eu- 5.011.926 7/1/92 until CIGNA 600,000 Pounds
rope cancelled Sterling per person
2,500,000
Pounds Sterling per acc.
2.1-B Nuclear Energy Liability NS-0379 1/1/96- Nuclear Energy Liability $20,000,000
Insurance 12/31/96 Insurance Association
DEDUCTIBLES
------ -----------
$10,000,000
Per Occurrence
$5,000,000
Per Occ.-USA/Can.
$250,000
Per Occ.-
Rest of World
$5,000,000
Any One Accident
$5,000 per Claim
$50,000 Pollution
19
SCHEDULE C
TO INSURANCE AGREEMENT
EASTERN POLICIES
TYPE OF POLICY POLICY
COVERAGE NUMBER DATES UNDERWRITER LIMITS DEDUCTIBLES
-------- ------ ------ ----------- ------ -----------
Excess Li- 96ED2501 9/1/96-97 Eastern Insurance Company $8,000,000xs
ability Limited-Bermuda $2,000,000
Contingent 96ED2801 1/1/96-97 Eastern Insurance Company
Liability Limited-Bermuda
20
SCHEDULE D
TO INSURANCE AGREEMENT
CURRENT RETAINED POLICIES
POLICY POLICY
TYPE OF COVERAGE NUMBER DATES UNDERWRITER LIMITS DEDUCTIBLES
---------------- ------ ------ ----------- ------ -----------
Workers' Compensation WLRC 9/1/96-97 Bankers Standard $2,000,000 $2,000,000
Texas-Ded. 42203063 Ins. Co.
Workers' Compensation WLRC 9/1/96-97 Pacific Employers $2,000,000 $2,000,000
Other States-Ded. 42203051 Ins. Co.
Workers' Compensation CCSC 9/1/96-97 Pacific Employers $2,000,000 $2,000,000
Retro 42203087 Ins. Co.
Workers' Compensation 1810017884 9/1/96-97 Maine Employers' $100,000/$500,000 $5,000
Maine Mutual $100,000
General Liability HDOG 9/1/96-97 CIGNA Property & $2,000,000 $2,000,000
18967248 Casualty Ins. Co.
Automobile Liability ISAH 9/1/96-97 CIGNA Property & $2,000,000 $2,000,000
007131641 Casualty Ins. Co.
Environmental HDCG 9/1/96-97 CIGNA Property & $1,000,000 $1,000,000
18967285 Casualty Ins. Co.
Automobile Liability - XXX000000 9/1/96-97 CIGNA Ins. Co. of $2,000,000 $2,000,000
Canada Canada
General Liability - XXXX00000 9/1/96-97 CIGNA Ins. Co. of $2,000,000 $2,000,000
Canada Canada
Railroad Protective- ORPG 8/1/96-97 Indemnity Ins. Co. of $2,000,000/ $2,000,000/
Xxxxxxx 00000000 Xxxxx Xxxxxxx (CIGNA) $6,000,000 $6,000,000
& Lake Erie RR Co.
Railroad Protective- ORPG 8/1/96-97 CIGNA Property & $2,000,000/ $2,000,000/
Boston 18968575 Casualty Insur. Co. $6,000,000 $6,000,000
& Maine Corp.
Railroad Protective- ORPG 4/8/96-97 Indemnity Ins. Co. of $2,000,000/ $2,000,000/
AMTRAK 18967923 North America (CIGNA) $6,000,000 $6,000,000
Railroad Protective- ORPG 4/8/96-97 Indemnity Ins. Co. of $2,000,000/ $2,000,000/
Mass. 18967881 North America (CIGNA) $6,000,000 $6,000,000
Bay Transp.
New York State OCPG 10/10/96-97 CIGNA $500,000/ $500,000/
Owners & Contractors 18968629 $500,000 $500,000
Protective Liability
21
SCHEDULE E
TO INSURANCE AGREEMENT
CURRENT TENNECO EXCLUSIVE POLICIES
POLICY POLICY
TYPE OF COVERAGE NUMBER DATES UNDERWRITER LIMITS DEDUCTIBLES
---------------------------- ----------- ---------- ----------------------------- ------------------------- ------------------
Tenneco Gas Production SWO5505896 6/19/96-97 St. Xxxx Surplus $1,000,000 $2,500
General Liability Lines Ins. Co. Each Occurrence
$1,000,000
Prod/CO Agg.
Tenneco Gas Production SPO5511912 6/19/96-97 St. Xxxx Surplus $10,000,000 $10,000
Umbrella Liability Lines Ins. Co. Each Occurrence,
$10,000,000
Prod/CO Agg.
Tenneco Gas South America 82/900194/D 7/24/95- Xxxxxxx-Konzern $2,000,000 $10,000
Construction Risk Liability 1/24/97
Tenneco Gas Australia CXC 042840 7/24/95- CIGNA $8,000,000 xs
Construction Risk Liability 1/24/97 $2,000,000
Excess Liability BE 9320742 4/26/96-97 National Union $10,000,000 $500,000
Michigan Production Fire Ins. Co. (AIG) Each Occurrence SIR
Company Gen. Agg. & Prod/CO Agg.
Offshore Property/OEE Pkg. MMA 96-134 7/27/96-97 UNI 17.0%; Sec. IA Sec. IA
Sec. IA&B - Offshore Prop. Gjensidige 14.0%; -- Per Schedule -- $5,000,000
Sec. II - OEE Vesta 15.0%; (100%) AOO
Sec. III - Protector 8.0%; Sec. IB Sec. IB
Charterer's Liab. Commonwealth 13.0%; -- Per Schedule -- $1,000,000
Hull & Co. 5.0%; (100%) AOO
All American Sec. II Sec. II
Marine Slip. 5.0%; OEE $50,000,000 -- $200,000
Reliance 5.0%; OCSLA $35,000,000 (100%) AOO
C.T. Bowring 18.0% CCC $5,000,000 OCSLA $200,000
(100%) Per Occ.
CCC $50,000
(100%) Per Occ.
Sec. III
Sec. III -- $50,000
--$1,000,000 (100%) AOO
Construction All Risk HG 015595 10/5/95- National Vulcan Cornhill Ins. Aus. $209,032,000 Aus. $30,000
12/31/96 SR International All Perils except:
Royal Insurance Global Aus. $250,000
Generali Windstorm, Flood,
SCOR and Earth Movement
Worker's Compensation-- E 13344308 Ongoing (Placed with Government) TBD
South Australia
Employer Cost Control 00X000000 7/31/96-97 CIGNA Maximum Weekly
Insurance Benefit: $500
Professional Indemnity 9617VK18625 7/28/96-97 HIH Casualty & General TBD $20,000 each and
Insurance Ltd. every claim
Motor Vehicle MV 452743 7/31/96-97 CIC Insurance Own Damage:
$24,000
Primary GL/AL/EL CXC 042960 8/13/96-97 CIGNA International $1,000,000
Mexico - Scada/Pemex Ea. Occurrence,
Gen Agg. & Prod/CO Agg.
(Contingent Auto)
$2,000,000 BI by Accident
$2,000,000 BI by disease
(Each Employee)
$2,000,000 BI by disease
(Policy Limit)
Follow Form Excess CXC 042962 8/26/96-97 CIGNA International $19,000,000 Any One
Mexico - Scada/Pemex Occur. & Aggregate
Foreign Workers' Comp. CXC 042979 11/1/96-97 CIGNA International $2,000,000
EPIP 8190265/ 11/1/96-97 American International $10,000,000
8190266 Specialty Lines
Ins. Co. (AIG)
Crime 4843124 11/1/96- AIG $1,000,000
11/1/97
22
SCHEDULE 2.1-A
TO INSURANCE AGREEMENT
TRANSFERRED OCCURRENCE-BASED POLICIES
OTHER POLICY
SCHED. TYPE OF COVERAGE POLICY NUMBER DATES UNDERWRITER LIMITS DEDUCTIBLES
------ ---------------- ------------- ------ ----------- ------ -----------
B All Risk Property YMM800856 6/1/96-97 Royal Insurance $2,000,000,000 $5,000,000
Damage/Business Blanket per Occur. Per Occ.-USA/Can.
Interruption (Global) $250,000,
Per Occ.-Rest of World
B Aircraft Products Liability 46 MPP 154779 9/1/96-97 Associated Aviation $150,000,000
Underwriters Aggr. Cov. A
$100,000,000
Aggr. Cov. B
$150,000,000
Aggr. Cov. A & B
B Aviation Hull & Liability 46BVH-153922 7/1/94-97 Associated Aviation $100,000,000
Underwriters Per Occurrence
23
SCHEDULE 2.1-B
TO INSURANCE AGREEMENT
CANCELLED OCCURRENCE-BASED POLICIES
OTHER
SCHED. TYPE OF COVERAGE POLICY NUMBER POLICY DATES UNDERWRITER LIMITS
------ ---------------- ------------- ------------ ----------- ------
B Excess Liability DL039795/07 9/1/96-97 Xxxxxxx-Konzern $10,000,000xs
$10,000,000
B Excess Liability BE8180249RA 9/1/96-97 American International (AIG) $25,000,000xs
Specialty Lines Ins. Co. $20,000,000
B Excess Liability DL188696/01 9/1/96-97 Xxxxxxx-Konzern $25,000,000xs
$45,000,000
B Excess Liability EU 0835533-01 9/1/96-97 Steadfast Insurance Co. (Zurich) $22,000,000xs
$70,000,000
B Excess Liability XTP 48390 9/1/96-97 United National Insur. Co. $8,000,000xs
(Front for Amer Re) $92,000,000
B Automobile-Mexico HLN 00261 1/1/96-97 Seguros Comercial America BI: $30,000/$60,000
PD: $30,000
B Ocean Cargo EIPH1006 7/1/96-97 ESIS International, Inc. $10,000,000
One Conveyance
B Comprehensive Boiler & BMI-SA- 11/1/96-97 Hartford Steam Boiler $100,000,000
Machinery Property 9138264-20 Per Accident
Damage/Business
Interruption
B Foreign Public & Products 62/99102/D 9/1/96-97 Xxxxxxx-Konzern $2,000,000
Liability Insurance Per Occurrence
(Primary Cover)
B Umbrella Excess Liability W51010 9/1/96-97 Winterthur (Front for $8,000,000
Eastern Insurance Co.) Any One Occurrence
xs $2,000,000
B Employer's Liability 054/950/ Not avail. Eagle Star Not avail.
60005626/1 Insurance Company
Limited
B Personal Accident-Europe 5.011.926 7/1/92 until CIGNA 800,000 Pounds
cancelled Sterling per person
2,500,000 Pounds
Sterling per acc.
B Nuclear Energy NS-0379 1/1/96- Nuclear Energy $20,000,000
Liability Insurance 12/31/96 Liability Insurance
Association
OTHER
SCHED. DEDUCTIBLES
------ -----------
B
B
B
B
B
B
B $10,000,000
Per Occurrence
B $5,000,000
Any One Accident
B $5,000 per Claim
$50,000 Pollution
B
B
B
B
24
SCHEDULE 2.2-A
TO INSURANCE AGREEMENT
TRANSFERRED CLAIMS-MADE POLICIES
OTHER POLICY
SCHED. TYPE OF COVERAGE NUMBER POLICY DATES UNDERWRITER LIMITS DEDUCTIBLES
------ ---------------- ------ ------------ ----------- ------ -----------
A Excess Liability XLUMB 00912 9/1/96-97 XL Insurance Company $100,000,000 xs
-Bermuda $100,000,000
25
SCHEDULE 2.2-B
TO INSURANCE AGREEMENT
CANCELLED CLAIMS-MADE POLICIES
OTHER
SCHED. TYPE OF COVERAGE POLICY NUMBER POLICY DATES UNDERWRITER LIMITS DEDUCTIBLES
------ ---------------- ------------- ------------ ----------- ------ -----------
A Excess Liability UO5138609 9/1/96-97 OCIL-Bermuda $100,000,000 xs
$200,000,000
A Excess Liability TGT 5035/4 9/1/96-97 ACE Insurance Company $200,000,000 xs
-Bermuda $300,000,000
A Fiduciary Liability NIA 0120995-96 3/1/96-97 Reliance $50,000,000 $500,000
71FF 101007525BCM Aetna
8141-48-49-A Federal
A ERISA Bond (Crime) 000-00-00 9/1/96-97 National Union Fire $15,000,000 NIL
Ins. Co. (AIG)
26
SCHEDULE 7.1-A
TO INSURANCE AGREEMENT
LETTERS OF CREDIT CURRENTLY IN PLACE
LOC BANK LOC# AMOUNT
--- ---- ---- ------
CIGNA Program NationsBank 130995 $22,000,000
CIGNA Program Texas Commerce I-422502 18,000,000
CA Self Insurance Bank of America LASB-119266 1,147,981
27
SCHEDULE 7.1-B
TO INSURANCE AGREEMENT
SURETY BONDS CURRENTLY IN PLACE
See attached schedule.
28
